A DRC court has suspended proceedings initiated by state-owned mining company Gecamines to dissolve a unit of Glencore Plc until at least next month.
Courtesy of: Bloomberg & William Clowes
The Commercial Court in Kolwezi, in southeastern Congo, ordered the suspension while it awaits a ruling by the Supreme Court on its competence to hear the case, Francoise Kena wa Tshimanga, a lawyer for Kamoto Copper Company.
Katanga Mining, which controls Kamoto Copper Company (KCC), obtained a decision from the Supreme Court on May 4 allowing it to challenge the Kolwezi court’s competence, Katanga said in a statement.
The Supreme Court’s first hearing is scheduled for June 15, according to the statement.
Gecamines President Albert Yuma didn’t answer his phone when Bloomberg called him and Glencore declined to comment.
KCC only resumed production in December after a two-year hiatus during which it invested in new processing facilities.
While Gecamines owns a quarter of the project, it doesn’t contribute to investment costs, which are wholly funded by Katanga.
Glencore expects KCC to produce as much as 300,000 metric tons of copper and 34,000 tons of cobalt in 2019, which would make it Congo’s biggest copper mine and the world’s largest producer of cobalt.
The price of cobalt, a key ingredient in rechargeable batteries needed to power electric vehicles, has almost quadrupled in the past two years.
Katanga says there are several courses of action available to address the capital shortfall, including the conversion into equity of a portion of existing debt owed by KCC to Katanga or forgiving some debt.