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