27th February 2008
Teal said that it would respond shortly to the government and was confident that all challenges that had been posed could be addressed.
The government, through the letter, requested that the firm submit the Kalumines feasibility study to identify the real contribution of each of the parties "in order to achieve a fair attribution of shares".
It stated that the feasibility study should present a planning of "realisation of social actions with a visible impact," and the State-owned Gecamines should actively participate in the daily management of the company.
Teal, through a fully-owned DRC subsidiary, owns 60% of Kalumines and 40% is owned by Gecamines. Teal is the subsidiary and exploration arm of the South African diversified mining company African Rainbow Minerals.
Teal said it looked forward to working in full collaboration with Gecamines and the government of the DRC, to develop the full potential of the Kalumines property.
The DRC government started the review of about 60 mining contracts last year, and released the findings of the review to companies last week. A number of companies have since reported, the latest Camec and Mwana, that they had received feedback from that country's government.
Meanwhile, Teal said that informal miners were active on the Kalumines property until early 2006, but that it had, through Kalumines, since managed the equitable and peaceful removal of these miners, completed an exploration programme at the Lupoto copper project area, and started a phase one mining operation that was building up to about 25 000 t/y of copper.
The company said it was advanced in preparing a prefeasibility study on the viability of a larger operation at Kalumines capable of producing a total of over 40 000 t/y copper in cathodes.
The phase one mine, which employed over 600 local residents and a number of the previous informal miners, has also permitted the initiation of a number of social investment projects, including the provision of water, transport and medical services to a local population of about 10 000 people, the upgrade and construction of roads, and a contribution to public infrastructure projects in nearby Lubumbashi.
Teal reiterated that it worked in close informal and formal cooperation with Gecamines in managing Kalumines and had recently appointed a senior Gecamines employee as a full time member of the Kalumines executive team.
Kalumines had also entered into an offtake agreement with Gecamines to sell a significant portion of phase one mining production to Gecamines on fully commercial terms.
Edited by: Mariaan Webb