Tiger seeks to lift stake in mine
PAUL GARVEY, HONG KONG
24 November 2011
Source: The Australian
COPPER miner Tiger Resources is in talks to acquire an additional 40 per cent stake in its flagship Kipoi mine in the Democratic Republic of Congo.
Perth-based Tiger, which has a market capitalisation of more than $300 million, is looking to buy out the share in Kipoi held by its DRC government-owned partner Gecamines.
Gecamines has emerged as a potential seller of its non-core assets as it looks to reduce debt accrued over years of mismanagement. The group, which is one of the country's biggest employers, recently received a $1 billion bailout from the DRC government but still has $600m in debt to its name.
``As a commercial entity the board of directors at Gecamines has been given the mandate to negotiate the disposal of assets as they see fit,'' Tiger managing director Brad Marwood told The Australian during a recent investor roadshow to Hong Kong.
``We like to think our mine is non-core for them, and we can acquire Gecamines' stake so they can pay down debt and we can move forward with more efficiency.''
Gecamines earlier this month emerged as a potential stumbling block in the $1.3bn takeover of Tiger's DRC neighbour Anvil Mining by Hong Kong-based Minmetals Resources, with Minmetals warning that it would not complete its acquisition unless Gecamines agreed to amend agreements it holds with Anvil.
Tiger has been ramping up its new Kipoi mine over the course of this year, with the company eventually hoping to lift output at the mine to 35,000 tonnes of copper a year.
The company is also planning a second stage expansion that will lift annual copper output to 50,000 tonnes.
Tiger's efforts to buy out Gecamines' stake has been complicated by the looming elections in the DRC, scheduled to take place early next year.
But the company's efforts to negotiate the acquisition of the remaining 40 per cent should have Tiger on a strong footing to acquire the stake soon after the country's new ministry is put in place.
The copperbelt that runs through the DRC and Zambia has been an active zone for mining acquisitions this year.
In addition to Minmetals' proposed purchase of Anvil, another Chinese company, Jinchuan, recently acquired another of Tiger's neighbours at Kipoi, Metorex of South Africa. Minmetals, which was outbid earlier this year by Barrick Gold for Zambian copper miner Equinox Minerals, has said it is interested in acquiring other assets in the region.
Major international miners such as Freeport, Vale and Glencore have also shown interest in the region.
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