China’s CMOC Group will pay Congo’s state-backed miner a $800 million settlement between 2023 and 2028 and at least $1.2 billion in dividends to end a dispute over royalties at one of the world’s biggest copper and cobalt mines.
(Bloomberg) — China’s CMOC Group will pay Congo’s state-backed miner a $800 million settlement between 2023 and 2028 and at least $1.2 billion in dividends to end a dispute over royalties at one of the world’s biggest copper and cobalt mines.
The disagreement over CMOC’s Tenke Fungurume mine began last July, when Congolese mining company Gécamines ordered a halt on exports from the site and claimed the Chinese company had been lying about its mineral reserves and owed $7.6 billion in royalties and interest.
Billions of dollars worth of copper and cobalt have been accumulating at the mine, and the settlement deal with Gécamines announced on Tuesday follows a provisional resolution to the dispute in April.
The resumption of exports brings to an end a difficult saga for the Chinese mining firm, which bought the Tenke mine from America’s Freeport McMoRan Inc. in 2016. Shipping the copper and cobalt out gradually will help ease the impact on supply routes and minimize logistics costs, people familiar with the matter said when the provisional deal was struck in April.
It’s not immediately clear what period the dividend payments will be spread over. Gécamines chairman, Guy-Robert Lukama and Congolese government spokesperson Patrick Muyaya didn’t immediately respond to messages and calls seeking comment.
CMOC said last week that it expects its first half profit to fall as much as 85% year on year, due primarily to the halt on sales from Tenke.
–With assistance from William Clowes and Winnie Zhu.
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