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Under the revised agreement, Congo Mineral Developments will pay the state mining company Gecamines US$25 million before constructing a mine, followed by another US$10 million once the project is commissioned. The previous agreement called for a payment of US$130 million before commercial production.
Tim Read, chief executive officer of America Mineral Fields, says the new agreement gives the partners “a realistic time frame to complete a feasibility study and arrange limited recourse project finance.”
The company and Anglo American also agreed to renew their joint-venture agreement before May 31, 2002. Read says this grace period allows the partners to conclude documentation with Congolese authorities, thereby removing uncertainty with respect to the project’s future development. The partners hope to secure “unequivocal title” to Kolwezi through amendments to the DRC’s mining code, and through presidential and constitutional decrees ratifying the commercial terms of the agreement with Gecamines.
The revised Kolwezi agreement is based on a phased project, with initial annual production of 42,000 tonnes of copper and 7,000 tonnes of cobalt. The tailings are held in two dams that contain 112.8 million tonnes grading 1.49% copper and 0.32% cobalt.
America Mineral Fields also plans to secure rights to the Kipushi zinc mine, a dormant underground producer in the nation’s copper belt. The company expects to conclude an agreement allowing Zincor, a wholly owned unit of South Africa’s Iscor, to invest US$3.5 million to earn a half-interest in the project.
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