DRC:DRC copper, cobalt to more than double over next two years

Published on by KANYARWANDA

DRC copper, cobalt to more than double over next two years

 

The bulk of the projected surge in output is expected to come from Freeport-MacMoRan's Tenke Fungurume mine

Author: Thomas Hubert (Reuters)
Posted:  Monday , 26 Apr 2010

KINSHASA (Reuters)  - 

Copper and cobalt production from Democratic Republic of Congo will more than double over the next two years, signalling a surge in revenues, according to a government forecast obtained by Reuters on Monday.

The projected rise in output, the bulk of which is expected to come from Freeport-MacMoRan's Tenke Fungurume mine, could pad coffers in the vast central African state where the two minerals already represent about 75 percent of exports.

Copper production will rise to 851,608 tonnes in 2012 from an estimated 409,935 tonnes this year, while cobalt output will hit 91,355 tonnes from 39,327 tonnes over the same period, according to the forecast.

The outlook was prepared by the mines ministry following government consultations with mining executives earlier this year and was provided to Reuters by a member of the commission which drafted it, who requested anonymity.

The bullish forecast comes as Freeport executives anticipate an agreement soon with Congo's government over a lingering contract review that has so far held up expansion of the giant Tenke Fungurume mine.

Freeport holds a 57.75 percent share in the project. The remaining interests are held by Canada's Lundin Mining Corp, with 24.75 percent, and state-owned Gecamines with 17.5 percent.

REVENUES

Kinshasa launched its review of all foreign mining contracts in 2007 in an effort to boost revenue from the country's once-lucrative mining sector, casting doubt on the viability of huge projects held by the miners.

The document, which also details gold, diamond, zinc and other minerals output to 2015, predicts government revenues from the mining industry will rise to 79 billion Congolese francs ($88 million) this year, triple 2009 intake.

"Regarding revenue, we expect to achieve more despite the recession that hit western economies, thanks to growth in emerging (consumer) countries such as China and India," according to the document.

The document acknowledges that "the Congolese mining sector is riddled with fraud and smuggling" and suggests a series of measures to improve its financial, social and environmental performance, including setting up government-run trading centres and enhancing traceability.

Illegal mining operations have for years funnelled cash into the country's myriad rebel groups, which remain entrenched despite years of joint U.N.-Congolese military operations.

The country is also on track to require cleansing of raw diamonds before export by mid-June in an effort to boost the value of its diamond exports. Congo is the world's No. 2 diamond supplier by volume. (Reporting by Thomas Hubert; editing by Richard Valdmanis)

© Thomson Reuters 2010 All rights reserved

Comment on this post