(DRC) Mine contracts to be renegotiated or cancelled
be renegotiated or cancelled 12:56 02/11/07Congo panel to recommend 61 mine contracts be changed
A government panel in the Democratic Republic of Congo will recommend 61 of the nation`s agreements with mining companies, including Freeport-McMoRan Copper & Gold Inc, be renegotiated or cancelled, the group`s chairman said.
The commission will recommend that 38 contracts be changed, including those of Freeport and Nikanor plc, Alexis Mikandji, chairman of the commission for the review of mining contracts, said on November 2 in a telephone interview from Kinshasa. The panel will say 23 contracts should be cancelled, he said.
The DRC, which has about 10% of the world`s copper reserves and a third of its cobalt, established the panel in April to review all mining deals, with the aim of amending those deemed unfair to the state.
President Joseph Kabila is trying to attract investors to dig new mines and restart others abandoned during a civil war that ended in 2003, leaving 4 million dead and the country`s infrastructure destroyed.
"The review takes a hard line on the mining contracts, including those signed with major firms," Philippe de Pontet, African analyst at the Eurasia Group in Washington, said in an e-mail. "We expect that the Kabila administration will reject some, but not all, of the recommendations."
The commission divided the contracts into three categories: those that should be changed, those that should be canceled and those that should remain untouched, Mikandji said. None of the contracts reviewed are in the last category, he said.
The recommendations "will be discussed by the government before the state enterprises are given instructions what to do," Mikandji said. Martin Kabwelulu, DRC mines minister, said in March that no contracts would be cancelled.
The report will be reviewed by the Cabinet before state companies begin renegotiating elements of the deals with their private counterparts, Mikandji said October 22.
Other companies operating in the DRC, a country the size of western Europe, include Moto Goldmines Ltd, AngloGold Ashanti Ltd, BHP Billiton Ltd, Katanga Mining Ltd, First Quantum Minerals Ltd and Central African Mining & Exploration Co.
China said in September it would loan the DRC government US$5 billion, some of which will be used to fund a new joint venture mining company between the countries. Gecamines, the DRC`s state-owned copper producer, already owns stakes in each of the country`s copper and cobalt-producing operations concentrated in the southern Katanga province. "It will be interesting to see whether some of the canceled concessions are awarded to Chinese firms, in the wake of Beijing`s multi-billion dollar deal with the government," de Pontet said.
Bill Collier, a spokesman for Phoenix-based Freeport, declined to comment immediately when contacted by Bloomberg. Simon Tuma-Waku, DRC`s former mines minister and Nikanor`s chief strategy officer, couldn`t be reached for comment when called on his mobile phone in the DRC.
(Bloomberg, November 2)
Labels: DRC, MINING CONTRACTS
posted by MrK @ 3:35 AM
3 Comments:
Vedanta manipulations
30-10-2007 30.10.07 :-109, (2121) fell amid market rumours that the copper and aluminium producer has guided analysts to lower their forecasts, traders said. The company may have advised analysts to cut their net profit forecasts by 100m usd, traders said. Albert Minassian, an analyst at JP Morgan, noted that most of Vedanta’s earnings come from Sterlite Industries (India) Ltd so that any problems should have been mentioned in Sterlite’s results announcement yesterday. "If there was anything enormous it should have been there," he said. He noted that Vedanta’s Zambian operations are not covered by Sterlite but that high copper prices make that option unlikely. But John Meyer, an analyst at Fairfax, mentioned the Zambian operations as a reason for the possible profit warning following a disruption there. He also noted that the Tuticorin smelter in India may have been affected by high energy costs and high prices of copper concentrate. A spokesman for Vedanta denied the rumour. "Vedanta hasn’t changed its guidance at all. Any suggestion that the company is encouraging people to downgrade their estimates is not true," he said. He declined to specify the company’s earnings guidance for the first half, due to be released on Nov 15.
01-11-2007 01.11.07 :-8, (2192) Goldman Sachs has downgraded its mining sector coverage view to ’neutral’ from ’attractive’ with Vedanta Resources PLC cut to ’sell’, Lonmin PLC cut to ’neutral’ and Xstrata PLC remaining as ’buy’, market sources said. In a note published this morning, Goldman Sachs said that to see further upside to current mining sector share prices it would need to argue for a substantial re-rating on the premise that demand growth is likely to stay ahead of supply growth and cash flows stay strong for the medium term. Vedanta Resources has been downgraded from ’sell’ to ’neutral’ with a price target rise to 2,135 pence from 1,945 pence. The broker added that Vedanta Resources is more exposed to base metal price movements than the other stocks it covers. Goldman Sachs said that it expects earnings to further suffer from the rupee continuing to strengthen versus the usd. The broker added that the Indian government’s comments on the HZL buy in by Vedanta suggests that it could be delayed for years, if indeed it ever happens, cutting the likely level of long-term earnings and cash flows retained by the group. Meanwhile, Goldman Sachs said that Lonmin has been downgraded to ’neutral’ from ’buy’ with a price target cut to 3,300 pence from 4,120 pence. The broker added that it is downgrading Lonmin as continued operational problems and project delays reduce its FY 2008 and FY 2009 estimates dramatically. Elsewhere, Goldman Sachs said that Xstrata remains its best ’buy’ idea with a price target rise to 3,860 pence from 3,840 pence. The broker added that Xstrata shares offers the most potential upside among its non-precious names coverage, and in its view are the best way of gaining exposure to strong coal prices through 2008 and 2009.
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Bon weekend Mr K
maquis@zambia.co.zm
Thanks for the article. It seems to me that all the mining firms are rather dubious in their dealings.
Thanks to Cho for the original article.
And thanks to you, Maquis. Have a bon long-weekend, as they say in France. :)
No comment
Euro news .....!!
Lol Maquis
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