Try the new FT.com

October 3, 2008 3:00 am

Camec takes $18.7m stake in Chinese plant

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Chinese companies' ties with the Democratic Republic of Congo are typified by a simple exchange: cash and infrastructure in return for vast amounts of copper and other minerals.

Capital is also flowing in the other direction and Camec, the DRC-focused miner of copper and cobalt, yesterday bought a cobalt refining plant in China.

London-listed Camec's $18.7m (£10.6m) acquisition of a majority stake in Zhejiang Galico, a producer of cobalt chemicals used in batteries, will integrate Camec's cobalt operations, the company said.

Camec's Mukondo Mountain mine in the DRC holds reputedly the world's richest cobalt reserves, and China is the world's biggest buyer of the metal.

"The centre of gravity is moving east and it is vital that we are involved in the Chinese market," said Phil Edmonds, the former England cricketer who is Camec's chairman. "The Chinese seem to understand the development requirements of Africa and the vast potential of Africa perhaps a bit better than others. We are on the same wavelength."

Beyond the benefit of streamlined production for cobalt, Camec said, the company stood to benefit from exposure to Chinese banks, which fund many African resource deals.

Chris Chapple, chief development officer, said: "One striking thing from spending time in China is that the banks understand what we're doing. You don't have to explain to them why you are invested in Zimbabwe or Congo."

Camec is scaling up production at Mukondo Mountain after resolving a series of disputes with competitors and the DRC government. In March the company settled its right to mine Mukondo by granting Gecamines, a state-owned company, a 30 per cent stake in the project. Dan Gertler, the government-linked DRC mining impresario, also owns a minority stake in the project through his Prairie holding company.

By March 2009 Camec expects to be producing 8,000 tonnes of cobalt concentrate a year, the company said.

"There are possibilities down the road," Mr Edmonds said, to develop similar links in China for its platinum, copper, coal and fluorspar.

In London Camec shares closed down 1p at 12¾p, their lowest level in 33 months. Its steady share slide over the summer mirrors that of fellow DRC miners Katanga Mining, Anvil Mining and First Quantum Minerals, which have been hit by investor flight from high-risk emerging markets.

Camec's all-share acquisition of Zhejiang Galico will give the Chinese company a 3 per cent stake.

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments
SHARE THIS QUOTE