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The ZiG - short for Zimbabwe gold — is the nation’s sixth attempt at having a functioning local currency in the last 15 years.
China’s CMOC Group has agreed to pay Congo state mining firm Gecamines $800 million to end a dispute over its Tenke Fungurume Mining (TFM) operation in the country, the Chinese company said on Tuesday.
CMOC said in a statement it will start paying the settlement fee this year and complete payment by 2028.
The Chinese mining company also said TFM will pay cumulatively at least $1.2 billion in dividends to Gecamines over the life of the project starting this year.
“CMOC will further consolidate partnerships with Gecamines and expand co-operation in the new energy and other sectors,” it said.
The firm is “committed to economic development and people’s welfare in Congo and making a greater contribution to co-operation between China and Congo,” it said.
Gecamines did not immediately respond to Reuters‘ request for comment.
An anticipated rise in earnings as more copper and cobalt is mined at TFM and another project called KFM means CMOC will fund an annual $133 million settlement fee and $67 million in dividend payments to Gecamines without hurting its net profit, Citigroup analysts said in a note.
“Considering the cash flow contribution from the ramp-up of TFM mixed ore and KFM project, we expect the impact of dispute settlement payment on cash flow will be insignificant,” the analysts said.
CMOC told Reuters last week it had resumed exports of copper and cobalt from its TFM mine. The exports had been blocked by authorities in the country following the dispute.
Copper and cobalt shipments were halted in July 2022 after Gecamines said it suspected that CMOC understated TFM’s reserve levels to reduce the amount of royalties it should pay to the state miner.
CMOC, which owns 80% of TFM, denied the allegations.
Both companies also reached an agreement on future additional reserves and on the operation and management of TFM, CMOC said.
Gecamines will also be entitled to 20% of the total value of the project’s subcontracting and a right to acquire a volume of output proportional to its 20% stake in TFM in market terms, CMOC added.
CMOC produced 254,286 metric tons of copper and 20,286 metric tons of cobalt from the TFM operations in Congo last year.
The settlement will help TFM mines to expand its copper and cobalt capacity, CMOC said.
(By Siyi Liu and Felix Njini; Editing by Louise Heavens, Conor Humphries and Paul Simao)
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