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Gecamines Seeks Bigger Bite from Copper and Cobalt JVs in DRC Overhaul

The Democratic Republic of Congo’s state-owned miner, Gecamines, is embarking on a strategic overhaul of its copper and cobalt joint ventures, aiming to extract greater value from these partnerships. This move comes amidst a global scramble for the critical minerals, essential for the green energy transition.

Gecamines is seeking to negotiate for higher ownership stakes across its various joint ventures, granting them greater control and influence in managing some of the country’s most productive mines. Additionally, the company is leveraging its existing shareholdings to secure off-take contracts, allowing them to independently trade copper and cobalt.

“We want to rectify past mistakes where we conceded a significant portion of our best assets to attract foreign investment,” stated Guy Robert Lukama, Chairperson of Gecamines, in a recent interview with Reuters. He emphasized the need for increased local representation on joint venture boards, ensuring transparency, accountability, and adherence to regulations regarding local procurement and staff training.

This push for renegotiation stems in part from concerns regarding past agreements deemed unfavorable to Gecamines. The company believes it can capitalize on the current strong demand for copper and cobalt, driven by their crucial role in electric vehicle batteries and other clean technologies.

A recent deal with China’s CMOC Group serves as a potential model for future negotiations. Gecamines secured the right to acquire copper and cobalt produced from the Tenke Fungurume mine, proportional to its 20% stake, at market prices. The agreement also included an $800 million settlement for disputed mineral royalties and $1.2 billion in dividends over the mine’s lifespan.

The success of this deal has emboldened Gecamines to pursue similar arrangements with other partners, including Glencore and Zijin Mining. Previously, these partners held full off-take rights due to financing the development of the projects.

Gecamines’ overhaul plans are likely to encounter resistance from existing partners, who may be reluctant to relinquish control or share profits. However, the company’s position is bolstered by the current market dynamics and the Congolese government’s support for increased state control over the mining sector.

The outcome of these negotiations will be closely watched by the global mining industry, as it could set a precedent for future resource development agreements in the DRC and potentially other resource-rich African nation

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