Anglo American bids farewell to Kolwezi

Anglo American (AAUK-Q) has decided to sell its half-interest in Congo Mineral Developments (CMD), the joint venture that holds a 60% interest in the Kolwezi copper-cobalt tailings project in the Democratic Republic of Congo. Anglo will sell its stake in CMD to America Mineral Fields (AMZ-T) for about US$3.5 million.

Anglo says it is repositioning its base metal holdings to contain only “major interests in larger scale projects.”

Last summer, CMD renegotiated the terms of an agreement to develop Kolwezi. Under the revised agreement, CMD will pay Gecamines US$25 million before building a mine, followed by another US$10 million once the project is commissioned. (Under the old deal, a payment of US$130 million was required before commercial production.)

Gecamines (Gnrale des Carrires et des Mines) owns 40% of Kolwezi and is, in turn, owned by the Democratic Republic of Congo.

The revised Kolwezi agreement is based on a phased project, with initial annual production of 42,000 tonnes of copper and 7,000 tonnes of cobalt. The tailings are held in two dams, Kingamyambo and Musonoi, which contain 112.8 million tonnes grading 1.49% copper and 0.32% cobalt. Some 97% of the resources are classified as measured, the balance fall in the indicated resource category.

Kingamyambo contains 42.3 million tonnes and is 20 metres high. Another 70.5 million tonnes of tailings were discharged into the Musonoi Rriver Valley, causing significant environmental degradation.

Work to date includes the proving-up of reserves, operation of a pilot plant, and the development of a process flow sheet.

AMZ still needs to secure “unequivocal title” to Kolwezi through amendments to the DRC mining code, and through presidential and constitutional decrees ratifying the commercial terms of the agreement with Gecamines.