August 17, 2011 / 3:37 PM / 9 years ago

Congo minister denies reports of mine stake sale

KINSHASA (Reuters) - Democratic Republic of Congo’s mines ministry on Wednesday denied a media report that state-owned miner Sodimico had sold its share in two copper mines, one of which is the country’s third largest, for $30 million.

A security guard walks past a shipment of copper ready to be delivered in Valparaiso city, about 121 km (75 miles) northwest of Santiago, June 29, 2009. REUTERS/Eliseo Fernandez

Bloomberg news agency reported earlier on Wednesday that Sodimico had sold its 30 percent stake in the Frontier and Lonshi mines in Katanga for less than one sixteenth of their estimated value.

When contacted about the reported sale, Mines Minister Martin Kabwelulu said: “No sale has been carried out,” adding an inventory of Sodimico’s assets was under way.

Sodimico Chief Executive Officer Laurent Lambert Tshisola Kangoa would not comment on the report when contacted by Reuters.

The Bloomberg report did not say who Sodimico had sold its shares to.

The licences to exploit Frontier, Congo’s third-largest copper mine, and Lonshi, a depleted open pit mine being eyed for underground development, were owned by Canadian miner First Quantum until both were confiscated last year.

Any sale would put Congo’s opaque mine ownership structures back in the spotlight a year after the controversial sale of another expropriated asset, the Kolwezi tailings project, also previously owned by First Quantum.

First Quantum has said the cancellation of the Frontier and Lonshi licences was a response to its decision to contest the expropriation of the Kolwezi project, which has subsequently been sold to London-listed Kazakh miner ENRC.

Frontier and Lonshi passed from First Quantum back to Sodimico, the state-owned mining body, and from Sodimico to Sodifor, a joint venture between Sodimico and a Hong Kong-listed shell company, Fortune Ahead, according to documents seen by Reuters.

The $30 million price tag would just be over 6 percent of the estimated market value of the stake. Frontier, when fully functioning, employed 1,657 workers and had an annual output of more than 90,000 tonnes of copper in concentrate.

Saul Valt, the sole registered director of Fortune Ahead, did not immediately respond to a request for comment.

It was not immediately clear whether Fortune Ahead had reduced any of its stake.

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