Chinese miner eyes Congo potential in bid for Australian copper producer

Shanghai-listed Chengtun Mining has made an offer for Australia’s Nzuri Copper, which is developing a copper and cobalt project in the Democratic Republic of Congo, in the latest sign of China’s dominance in the resource-rich African country.

Shenzhen-based Chengtun offered $79m for the company, which would give it control of the Kalongwe copper and cobalt project in the DRC and add to its cobalt processing plant in the country. At A$0.37 a share the offer is a 42 per cent premium on the company’s last closing price.

Chengtun has agreed to provide a A$5m loan to help develop the project, Nzuri said.

Chinese companies are among the most active players in the Democratic Republic of Congo, a country that contains the richest reserves of copper, which will benefit from increasing demand from clean energy technologies, and cobalt, a key ingredient for lithium-ion batteries used in electric cars.

Last year China’s Citic Metal invested $560m in Canada’s Ivanhoe Mines while in 2016 China Molybdenum bought the Tenke copper and cobalt mine for $2.65bn.

Chengtun said the Congo had the world’s lowest cost production of cobalt.

Nzuri, a junior exploration company, has completed a feasibility study for the Kalongwe project, which could produce 22,600 tonnes of copper a year and 3,700 tonnes of cobalt metal.

“Kalongwe is a rare medium-sized copper and cobalt mine in the DRC that can quickly be brought into production,” Chengtun said.

Nzuri has a joint venture with Ivanhoe Mines to explore in a 343-square kilometre area in the western Katangan copper belt.

Shares in Nzuri rose 21 per cent in Australia to hit A$0.32.

READ  Revolution Bars puts new openings on ice and vows to improve existing sites after sales stumble



Please enter your comment!
Please enter your name here