The Congo’s state-owned mining firm Gecamines has called off its plans to divest a 20% stake in the Kamoto Copper Company (KCC) mining project to Fleurette Group.
The copper and cobalt mine in the Katanga province already has a joint ownership that includes Fleurette and Swiss mining giant Glencore, which holds a stake through its subsidiary Katanga Mining.
Gecamines managing director Ahmed Kalej has confirmed to Reuters that the company is not selling its stake in the Kamoto project.
"It is a strategic decision. We are re-evaluating the value of our share in the project. Future decisions will be made on a basis of the need for financing at that time," Kalej said.
Through the sale funds, Gecamines had planned to improve the infrastructure of its plants to ramp-up its copper production to more than 100,000t by 2016.
Gecamines chairman Albert Yuma had put a 20% stake of KCC up for sale in 2013 to pay down some of its debt and expand production.
"After re-evaluating the situation, Gecamines has put that option on standby and is currently assessing other modes of financing," Yuma told The Wall Street Journal.
The stake has been valued at around $1bn.
In August 2013, the Congo mining ministry raised concerns, claiming that the company could not sell a stake in a national project without government approval.
Further, the International Monetary Fund (IMF) has criticised Gecamines, saying that levels of transparency have not been maintained during the sale of its mining assets.
The IMF alleges that the mining firm has sold projects considerably below their appropriate market value.
The Kamoto project includes exploration and mining properties, the Kamoto concentrator, the Luilu metallurgical plant, the Kamoto underground mine and two oxide open pit resources in the Kolwezi district of the Congo.
Image: Employees in the Kamoto underground mine. Photo: courtesy of Katanga Mining Limited.