China's MMG targets 60,000 T copper output from Congo mine
* Development has been hindered by power shortages
* MMG pursuing further exploration at Kinsevere property
By Jonny Hogg
KINSHASA, Oct 16 (Reuters) - Chinese mining group MMG Limited is targeting copper output of 60,000 tonnes this year from its Kinsevere mine in Democratic Republic of Congo, despite delays caused by power shortages, the company said on Tuesday.
MMG - which is listed in Hong Kong, run by Australians, and controlled by Chinese metals trader Minmetals - bought the Kinsevere mine from Canada's Anvil Mining last year. The mine produced its first copper cathodes in May 2011.
Progress towards reaching its annual production capacity of 60,000 tonnes was hindered by power shortages in the copper-rich Katanga province earlier this year, executive general manager for business development, Michael Nossal, said.
"Our target is to do it by the end of this year," he told Reuters in an interview on the sidelines of a mining conference in Congo's capital Kinshasa.
"We are dependent on the stability of the electricity grid, although we have greatly reduced our dependence by installing generation capacity for about half our requirements," he said.
To make up for the shortfalls, MMG is using diesel generators to power its plant, putting power costs up by around 25 percent, Nossal said, adding that the measure is expected to be only temporary.
Nossal said MMG was keen to expand its investment in Congo, but was currently emphasising further exploration on its Kinsevere concession.
"We'd love to expand (Kinsevere) but we would not like to reduce the mine life...Therefore in order to justify an expansion we'd have to find more resources," he said.
We've got a fairly full exploration team working on that project," he added.
MMG also owns the Mutoshi mine but is waiting to see if state miner Gecamines exercises its option to take over the project.
"Assuming the option is exercised we'll be looking for another mining project in DRC, if the option is not exercised we'll be looking to work with Gecamines to develop Mutoshi," he said.
Despite being saddled with an estimated $1.5 billion of debt, Gecamines has bought out two of its joint venture partners in recent months as part of its stated aim to become a major producer again after decades of decline.
In another move to increase revenues from its vast, but largely underexploited mining sector, Congo is expected to replace its 10-year-old mining code with new regulation framework next year.
Congo's business climate has improved in recent years, Nossal said, but warned that if the anticipated changes increased fiscal demands on mining companies, that trend could be reversed.
"They should continue to make (the business climate) improve and not go backwards, because you can kill a mining boom very easily by changing the rules," he said.