LONDON Dec 8 Miner ENRC, battling to
clean up its governance record, has tightened its control over
copper operations in the Democratic Republic of Congo with a
$550 million cash deal that ends its links to Israeli
businessman Dan Gertler.
Kazakh ENRC -- one of several foreign-owned, London-listed
miners to come under fire over governance and transparency --
has been pushing to streamline its structure, clean up its
reputation and improve a share price that has underperformed
rivals by almost 60 percent over the past two years.
Transparency campaigners including Global Witness have
criticised ENRC for using partners in Congo, working through
offshore companies, which they say could shelter corrupt local
Gertler, an influential figure in Congo's mining sector with
close links to the Kinshasa government, denies the accusations.
In a statement late on Friday, ENRC said it had agreed to
buy the 49.5 percent it does not already own of holding company
Camrose Resources, which controls assets including the coveted
Kolwezi project and a string of exploration licenses.
It will also buy out outstanding minorities in Camrose
ENRC found itself at the centre of a debate over
expropriated assets two years ago after it bought the first 50.5
percent of Camrose, an offshore holding company that controls
Congo's promising Kolwezi copper project. Kolwezi had been owned
by Canada's First Quantum until the licence was abruptly
revoked in 2009.
ENRC settled with First Quantum in January 2012 and has been
negotiating for months to end its partnership with Gertler.
A spokesman for Gertler's Fleurette Group said that, while
Friday's deal ended joint interests with ENRC, Gertler would
continue to "explore opportunities with other leading players in
the sector". Gertler has done copper deals in Congo with
companies including Glencore.
ENRC Chairman Mehmet Dalman, who took the top job in
February this year and has promoted himself as a "new broom",
said the deal was part of ENRC's strategy of consolidating
copper and cobalt assets in Africa.
Near-term production potential from the Camrose assets is
approximately 100 thousand copper contained tonnes per annum,
with capital expenditure in 2013 estimated at some $300 million.
The original Congo deals were part of ENRC's aggressive push
to grow beyond its Kazakh, ferrochrome-focused base. The miner
has since focused spending on operations that can generate cash
most swiftly, and has reined in expansion plans.
The deal will be put to ENRC's shareholders on Dec. 28.