LONDON – Debt-laden Kazakh miner Eurasian Resources Group (ERG) has revived efforts to sell its Frontier copper mine in the Democratic Republic of Congo (DRC) despite a drop in valuation to about $400-million, two banking sources said.

The company, which is working with VTB Capital and Rothschild to spin off and eventually list some of its assets, had already tried to sell its international operations in 2014 but failed to do so as the global economy slowed and commodity prices dived.

ERG, formerly known as ENRC, did not respond to requests for comment.

A sale, however, is now complicated by the DRC parliament's adoption in January of a new mining code to increase taxes and royalties for mining companies. Mining and oil accounts for about 95% of export revenue.

The industry has been lobbying President Joseph Kabila not to sign the charter, saying it would discourage investment and violate existing agreements.

ERG also owns copper and cobalt mines Boss Mining and Comide and some development and near-production assets in the DRC. One of the sources said ERG aims to leave the DRC within two years.

"It doesn't seem the right time to sell Congolese copper mines -- as there is still uncertainty on the change in the mining charter -- unless you are being forced into it by your creditors," the second source said.

ERG amassed a hefty debt of about $6-billion to its main creditors, VTB and Sberbank, after its three founders and the Kazakh government took it private.

CHINESE INTEREST?
A troubled six-year listing on the London Stock Exchange ended in 2013 after boardroom battles, corruption allegations and an investigation by the Serious Fraud Office.

The first source said that the company sent sale information documents to interested parties three weeks ago.

"Chinese companies already operating in the country are going to take a look ... they are the most likely buyers," the second banking source said.

China Molybdenum, Zijin Mining Group and China Nonferrous Metals Corp already invest in the DRC. Other international mining companies in the country include Glencore, Ivanhoe Mines and Randgold Resources.

DRC is Africa's largest copper producer, a significant gold miner and one of the world's leading sources of cobalt, which is increasingly sought after for use in electric car batteries.

The country, however, has suffered huge energy shortfalls, with its copper-mining Katanga region receiving only about half the power it needs from the national grid, forcing operators to rely on expensive generators or imports.

"The whole saga is a bit of a sorry one ... issues around electricity shortage and political risk in the country, coupled with lower copper prices, lower metal grade at the mine, which only has a 20-25 year lifespan, might have affected the valuation," said Paul Gait, senior research analyst at Bernstein.

The price of copper on the London Metal Exchange has dropped more than 30% to about $7,000 a tonne since hitting a record high above $10,000 in 2011.