Glencore’s Katanga reaches agreement on land for Kamoto tailings
Katanga Mining, the Glencore subsidiary that operates in the Democratic Republic of Congo (DRC), has reached an agreement to acquire land where it could build a new long-term tailings facility for its 75%-owned Kamoto Copper Company (KCC) operations.
The agreement with DRC State miner Gécamines, which has a 25% shareholding in KCC, includes multiple blocks, which not only covers the preferred location for the tailings, but also blocks that will enhance KCC’s ability to more efficiently operate its mines and other infrastructure.
Katanga said that, if the agreement was implemented, the risks for KCC’s operations resulting from land constraints, which the company previously alluded to, would be mitigated.
KCC will pay up to $250-million to acquire the land, the total amount payable being dependent on delivery of title to the various different land areas.
The agreement also provided an initial payment of $150-million to Gécamines, which would be fully offset against the purchase price consideration or other payment obligations of the company to Gécamines from time to time.
KCC also has to remove about 15-million dry metric tonnes of tailings currently in a sub-section of these areas to another suitable location.
The agreement further includes a new royalty to Gécamines of 2.5% of net sales from the acquired land areas if KCC elects to mine any resources in the acquired land areas.
The agreement anticipates the title transfers to be effected during the course of 2020.
KCC is aiming to achieve its targeted life-of-mine average production of about 300 000 t of copper and 30 000 t of copper, at a steady state copper unit cash cost of $1.65/lb before cobalt byproduct credits, by 2022.
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