Juniors settle differences with South African majors

Ending months of litigation, America Mineral Fields (AMZ-T) has formed a new company with South African mining house Anglo American (ANGLY-Q) to pursue jointly the giant Kolwezi tailings project in the Democratic Republic of Congo.

Earlier this year, AMF filed suit against Anglo after having its previous tender for the project terminated by the Congolese state-owned Generale des Carrieres et des Mines (Gecamines). The junior claimed damages of US$3 billion, alleging Anglo had “tortuously interfered with the company’s agreements in the Democratic Republic of Congo.”

The new company, christened Congo Mineral Development, will be a 50-50 joint venture, with AMF and Anglo having equal representation on the 6-man board of directors. As well, Anglo has injected US$16 million into the company, half of which was for shares and the other for reimbursement to AMF for previous expenditures at Kolwezi.

Congo Mineral intends to negotiate with the Congolese government for development rights to the Kolwezi project. Press reports in early January, however, suggested the government was considering awarding the project to Belgium’s Union Miniere, its former partner in colonial times.

Kolwezi contains a resource estimated at 107 million tonnes grading 1.34% copper and 0.25% cobalt, which is spread out over three deposits: Kingamwambo (60.5 million tonnes), Kasobantu (32.2 million tonnes) and Musomoi Valley (11.8 million tonnes).

In another African legal battle, SouthernEra Resources (SUF-T) and De Beers Consolidated Mines (DBRSY-Q) have ended their months-long feud over the high-grade M1 kimberlite pipe, formerly part of SouthernEra’s Klipspringer diamond project in South Africa’s Northern Province.

The new deal gives De Beers a 60% interest and management control in the mining venture, leaving SouthernEra and its partner, Randgold & Exploration, with 40% (an unrelated agreement gives SouthernEra the right to buy out Randgold’s interest). As part of the deal, SouthernEra’s existing diamond recovery plant on the nearby Modderfontein farm will be used for processing mined ore.

While the dispute’s end is reportedly welcomed by all parties concerned, SouthernEra has lost some autonomy in that it must now market all diamonds mined at Klipspringer through De Beer’s Central Selling Organization, a situation it had wanted to avoid. Conversely, the company says the rapid commencement of mining of the M1 pipe will provide it with capital to develop the kimberlite fissures at Klipspringer. At last report, the M1 kimberlite pipe hosted 512,400 tonnes grading 3.08 carats. A parcel of diamonds weighing 441 carats was independently valued last year at US$140 per carat.