London, England — 22 October 2012 – Gecamines “’ the state-owned Democratic Republic of Congo (DRC) mining company battling to raise cash and restore its status as a major producer “’ will complete a review of its joint ventures by year-end.
Reuters reports from here that the review, part of a five-year restructuring at Gecamines, has raised fears among some investors that the company could be setting itself on a collision course with partners such as Freeport McMoRan and Glencore-owned Katanga Mining.
Many investors are still rattled by an overhaul of contracts in Congo between 2008 and 2010, which ended with one miner leaving the country and, in other instances, increased state-ownership or additional payments.
Gecamines, at its peak the backbone of the copper-fuelled Congo economy, has dismissed concerns over the latest review and chief executive Ahmed Kalej Nkand said the aim was to improve existing ventures, particularly for mines already producing.
“It is about checking there is a match between investment spend and infrastructure, that marketing is being done according to norms, that mining operations cost what they should, and so forth,” he told reporters here.
He said the programme had begun last month and should produce findings by the end of the year.
Gecamines, created by authoritarian leader Mobutu Sese Seko after independence in 1960, set up a string of partnerships with mining companies in the 1990s, when it had limited access to outside capital.
Nkand said Gecamines aimed to improve the performance of ventures already producing, while those near production or in development were being pressed on when they would start up.
“Then there is the third category, those in the feasibility stage. Here timetables are binding – those that do not conform do risk having their exploration contracts annulled,” he said.
Gecamines plans to spend some US$930 million over five years to raise its production from a targeted 35,000t of copper in 2012 to 100,000t in 2015. At its peak, in 1986, Gecamines produced almost 480,000tof copper.
Nkand said Gecamines was in talks to restructure the bulk of the conglomerate’s US$1.5 billion debt burden, shifting roughly half to the state as part of its reconfiguration. It will also reduce its workforce to 4,500 from 9,600, and is looking to employ more younger workers to bring down a current average age of 50.
Source: Reuters Africa. For more information, click here.