A shareholder dispute over one of the world’s biggest copper and cobalt mines is heating up in the Democratic Republic of Congo (DRC), after state miner Gecamines SA threatened to block exports or even take the mine away from its partner, China Molybdenum Co (CMOC, 洛陽欒川鉬業).
Gecamines, which owns 20 percent of the Tenke Fungurume mine’s holding company, accused CMOC of manipulating the project’s finances and said it owes as much as US$5 billion in payments.
The disagreement has extended to who is actually running the mine: A Congolese court appointed a temporary administrator to manage the holding company, while the shareholders sort out their differences, but CMOC said nothing has changed.
The administrator, Sage Ngoie Mbayo, said he now controls the company’s bank accounts, but was last week blocked from entering the mine site by Congolese soldiers.
Things were set to come to a head on Thursday at the first meeting between the shareholders and Ngoie at Tenke Fungurume Mining SA’s (TFM) offices in the Congolese mining hub of Lubumbashi, but while Gecamines’ top two executives were there, CMOC representatives did not attend.
Gecamines chief executive officer Bester-Hilaire Ntambwe Ngoy Kabongo and his deputy, Leon Mwine Kabiena, said they are prepared to take more drastic action, including effectively revoking CMOC’s ownership of the project by dissolving the partnership.
“If it continues like this, we are going to ask for the dissolution,” the CEO said.
The two executives became increasingly agitated during the meeting, which lasted two hours in a boardroom surrounded by otherwise-empty company offices, while armed guards stood outside.
“What CMOC is doing now is stealing, it’s cheating, it’s covering-up,” Mwine said, adding that they were “liars,” “pillagers,” “bandits” and “criminals.”
CMOC did not immediately answer questions on the meeting or Gecamines’ statements.
The company previously said the mine is operating as usual without any change in management, and production is beating targets.
In its annual report last year, CMOC said communication with Gecamines was “complex and dynamic,” and it planned to engage an independent third party to verify disagreements over reserve estimates “and resolve the differences through fair and impartial negotiation.”
Any disruption to operations or exports from Tenke Fungurume could send ripples through global metals markets. The DRC is one of the world’s top producers of copper and by far the largest supplier of the key battery mineral cobalt.
Tenke Fungurume alone accounts for about 14 percent of world cobalt production, according to calculations by Bloomberg using figures from Darton Commodities, and the ore body is expected to last for decades.
Other commodities:
‧Gold for August delivery fell US$9.30 to US$1,840.60 an ounce, dropping 1.86 percent from a week earlier.
‧Silver for July delivery fell US$0.30 to US$21.59 an ounce, down 1.55 percent on the week, while July copper fell US$0.10 to US$4.01 a pound, plunging 6.53 percent weekly.
Additional reporting by AP
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