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China's Zijin and Citic Metal to buy copper from DRC mine

06/09/2021 | 12:05pm EDT

(Reuters) -China's Zijin Mining said one of its subsidiaries and Citic Metal will each buy 50% of the copper output from the first phase of its Kamoa-Kakula mine in Democratic Republic of Congo (DRC), which has now won approval to export concentrate.

The deals will see wholly-owned Zijin unit Gold Mountains (H.K.) International Mining Co Ltd and trader Citic Metal, part of state-owned conglomerate Citic Group, split the initial offtake from what is expected to be the world's highest-grade major copper mine.

The agreements were done "on competitive arms-length commercial terms" and include treatment and refining charges based on the annual industry benchmark, Zijin said in a filing on Wednesday.

They are for both copper concentrate directly from Kamoa-Kakula, which started production on May 25, and blister copper processed at a nearby smelter, it added.

Canada-based Ivanhoe Mines, Zijin's main partner in the Kamoa Copper joint venture that operates the mine, also announced the deals, saying first-phase output is projected to be approximately 200,000 tonnes of copper per year.

"We have all necessary authorizations in place and will commence exports of (copper products) to meet the burgeoning international demand for electrification of the global economy," Ivanhoe President Marna Cloete said in a statement.

The company said in late May it had applied for a waiver that would allow it to ship concentrate to overseas markets despite a DRC ban on exports since 2013 to encourage domestic processing. The DRC has issued regular waivers to the ban.

The buyers will be responsible for arranging freight and shipment of the copper to its final destination, initially via the port of Durban, South Africa, Ivanhoe said.

Citic Metal and the Zijin unit will each provide an advance payment of up to $150 million, which can be drawn on by Kamoa Copper from June 10 this year until May 31, 2023.

"The facility will bear an annual interest rate of 8% and will be offset against provisional payments due to Kamoa Copper from product deliveries," Ivanhoe added.

(Reporting by Tom Daly; Editing by Emelia Sithole-Matarise, Kirsten Donovan)

By Tom Daly

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
DOW JONES AFRICA TITANS 50 INDEX -0.02% 512.4 Delayed Quote.-3.27%
GOLD 0.57% 1759.56 Delayed Quote.-7.83%
IVANHOE MINES LTD. -1.32% 8.23 Delayed Quote.19.97%
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