Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A temporary administrator appointed by a Congolese court to run the world’s second-largest cobalt mine took control of the project’s bank accounts after majority owner CMOC refused him access to the mine, an adviser said on Wednesday.
In written responses to Reuters, CMOC spokesman Vincent Zhou reiterated comments from two weeks ago that the Tenke Fungurume mine (TFM) has not changed its management, but he did not address questions about TFM’s bank accounts.
A Congolese court appointed the administrator, Sage Ngoie Mbayo, in February to manage TFM for six months after Congo’s state miner and TFM minority shareholder Gecamines alleged that CMOC had understated reserve levels.
Congo’s government says it suspects CMOC understated reserve levels to reduce the amount it pays to Gecamines. CMOC, which was previously known as China Molybdenum, denies having done so.
After Congo’s justice ministry lifted a stay on implementation of the order earlier this month, Ngoie finally took control of TFM’s headquarters in the city of Lubumbashi on June 9, according to Ngoie’s team and videos of him on site.
But CMOC officials, with the support of heavily armed soldiers, denied him access to the mine about 200 kms (120 miles) away when he went there the following day, said Moise Wetu, an adviser to Ngoie.
“They refused to let us enter and there was no parity of force between the police we were sent with and the Congolese military there,” he told Reuters.
Zhou did not respond to a question about the incident. Congo’s mines ministry and Gecamines, which owns a 20% stake in TFM, were not immediately available for comment.
Wetu said Ngoie gained control of TFM’s Congo-based bank accounts last week, preventing any payments by the mine.
Reuters could not independently verify that. It was unclear how the mine might be paying staff and contractors. The mine produced 18,501 tonnes of cobalt and 209,120 tonnes of copper last year.
“There are persons who ignore the basic facts and act against the established agreement, trying to sabotage the amicable environment of friendly talks by telling lies, making troubles, and attacking partners,” Zhou said.
“We will retain all means, including legal means, to defend our legitimate rights and interests.”
(By Aaron Ross; Editing by Helen Reid, Emelia Sithole-Matarise and Richard Chang)
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