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S.Korea says seeking $1 bln Congo mining deal
October 30, 2010 / 3:30 PM / 7 years ago

S.Korea says seeking $1 bln Congo mining deal

* Consortium would refurbish Musoshi copper mine

* Deal would include deepwater port, wastewater plant

* Study of mine’s copper reserves due in two weeks

By Katrina Manson

LUBUMBASHI, Democratic Republic of Congo, Oct 30 (Reuters) - A consortium of South Korean companies will seek a minerals-for-infrastructure deal in Democratic Republic of Congo that could be worth $1 billion, Congolese and South Korean officials told Reuters late on Friday.

The proposed deal -- involving refurbishment of a copper mine and construction of an Atlantic deepwater port -- would bolster South Korea’s bid to secure long-term access to metals while speeding Congo’s development, South Korean ambassador to Congo Kim Sung-chul said.

“We were more poor than Congo in the 1960s, now we are chairing the G20. This change was possible only thanks to support from outside and we think it’s high time we repay that,” he said.

Kim is leading a delegation of executives from South Korean firms Samsung (005930.KS), Hyundai (005380.KS), Bosco, Daewoo, and Taejoo Synthesis Steel to Congo mining sites.

He said a consortium of South Korean companies, including Taejoo, was seeking to form a joint-venture with Congo’s state-owned miner Sodimco to refurbish the disused Musoshi copper mine at a cost of $300 million.

He said the deal would also involve South Korea’s Eximbank loaning $150-$200 million to South Korean firms to fund a wastewater treatment plant in Kinshasa to serve 2 million people -- the cost of which would be recouped from future revenues from the mine.

DEEP-SEA PORT

He added that South Korea had also selected Hyundai, Bosco and STX to build a deep-sea port at Banana on Congo’s Atlantic coast, which would cost $500 million and take four years to complete once work starts.

Some $370 million of the cost of the port would be recouped by a build-operate-transfer deal, he said, and South Korea is also asking Congo to provide mineral resources to cover the remaining $130 million.

The governor of Congo’s minerals-rich southern Katanga province confirmed the mine deal proposal. “They so far have Musoshi mine. It’s a very good mine, a very big mine,” Governor Moise Katumbi told Reuters.

Katumbi said the mine -- now waterlogged and in ill-repair -- was once run by a Japanese consortium and closed during the global financial crisis that sent copper prices tumbling and put 300,000 Congolese out of work.

Seul Chul-hee, head of Taejoo in Congo said Congo’s Sodimico was likely to take a 35 percent stake in the mine, and South Korean companies the remainder.

“Now we are making the consortium - it is a big group,” he said, adding he hoped Congo would also suggest other mine sites in future in exchange for which South Korea could build small-scale hydroelectric plants.

He said a study due in two weeks was likely to show the mine contained less than previous reserve estimates, which stood at 1.4 million tonnes -- a factor that could affect coming negotiations over the deal.

The group also visited Anvil Mining, in which Swiss metals trader Trafigura has a 36 percent stake, and Glencore-controlled Katanga Mining, but officials gave no details of any potential deals with the two.

The talks come after Congo agreed a $9 billion infrastructure-for-mines deal with China in 2008 that was later reduced to $6 billion following concern the country was taking on too much debt. (Editing by Richard Valdmanis)

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