Congo Court Re­jects Glen­core Bid to Move Cop­per Dis­so­lu­tion Case...

Zambian Business Times - - FRONT PAGE -

• Supreme Court rules case must be heard by provin­cial tri­bunal

• Glen­core unit had ques­tioned com­pe­tence of court to hear case

The Demo­cratic Repub­lic of Congo’s Supreme Court ruled a provin­cial tri­bunal can hear a case brought by the state min­ing com­pany to dis­solve a unit of Glen­core Plc.

The de­ci­sion is a set­back for the Swiss com­mod­ity trader, which is fac­ing mul­ti­ple dis­putes in the cen­tral African na­tion. Glen­core-con­trolled Katanga Min­ing Ltd. had chal­lenged the Kol­wezi Com­mer­cial Court’s com­pe­tence to hear the case, in which state miner Ge­camines is seek­ing to dis­solve Kamoto Cop­per Co.

The Supreme Court de­clared KCC’s case ad­mis­si­ble but un­founded on May 30, said Roger Masamba, a lawyer rep­re­sent­ing Ge­camines. A date for the next hear­ing in Kol­wezi hasn’t been fixed yet, he said.

Ge­camines be­lieves the dis­so­lu­tion of KCC is "a se­ri­ous and im­mi­nent risk" un­less the par­ties reach an agree­ment, Masamba said.

Glen­core de­clined to com­ment, while Ge­camines Pres­i­dent Al­bert Yuma didn’t im­me­di­ately an­swer calls to his phone.

KCC, which oper­ates a cop­per and cobalt mine in south­east Congo, is a joint ven­ture be­tween Katanga, which owns 75% of the com­pany, and Ge­camines. Glen­core, based in Baar, Switzer­land, owns more than 86% of Katanga.

Cap­i­tal Short­fall

Ge­camines launched pro­ceed­ings in April to shut down KCC over what it says was Glen­core’s fail­ure to ad­dress a cap­i­tal short­fall at the com­pany for more than a decade. KCC’s to­tal debt stood at $9.2 bil­lion at the end of De­cem­ber, lead­ing to a $4.2 bil­lion short­fall in work­ing cap­i­tal that Katanga was re­quired by Con­golese law to re­solve be­fore Jan­uary.

KCC only re­sumed pro­duc­tion in De­cem­ber af­ter a two-year hia­tus dur­ing which it in­vested in new pro­cess­ing fa­cil­i­ties. While Ge­camines owns a quar­ter of the project, it doesn’t con­trib­ute to in­vest­ment costs, which are wholly funded by Katanga.

Glen­core ex­pects KCC to pro­duce as much as 300,000 met­ric tons of cop­per and 34,000 tons of cobalt in 2019, which would make it Congo’s big­gest cop­per mine and the world’s largest pro­ducer of cobalt.

Katanga says dis­so­lu­tion is pre­ma­ture and there are sev­eral cour­ses of ac­tion avail­able to ad­dress the cap­i­tal short­fall, in­clud­ing the con­ver­sion into eq­uity of a por­tion of ex­ist­ing debt owed by KCC to Katanga or for­giv­ing some debt.

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