Ivanhoe Mines to meet with Congo government over Kamoa deal

Thu May 28, 2015 1:03pm EDT
 
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TORONTO May 28 (Reuters) - Ivanhoe Mines Ltd's chief executive said on Thursday that he will meet with officials from the Democratic Republic of Congo (DRC) this weekend to address any "misunderstandings" around his company's deal to sell nearly half of its Komoa copper project.

The government opposes the transaction, according to media reports, because it was not consulted on Zijin Mining Group Co Ltd's agreement to buy a 49.5 percent stake in Ivanhoe subsidiary Kamoa Holding Ltd, which owns 95 percent of the DRC copper project.

Ivanhoe Chief Executive Lars-Eric Johansson said on a conference call on Thursday to discuss the $412 million Zijin deal that he will lead a group of senior executives to Kinshasa, but was unaware of any required government approval.

The Zijin partnership had been discussed with government and mining officials before final negotiations began, Johansson said, adding that the transaction is not expected to close until late July.

The government holds a 5 percent stake in Kamoa and has been offered a bigger share, Ivanhoe said.

"We have written a letter to the president offering to sell up to 15 percent of the project," said Ivanhoe Chairman Robert Friedland. "That is on terms to be mutually agreed, and I have every expectation that we will do exactly that and hopefully sooner than later,"

A feasibility study on the Kamoa project is expected at the end of next year. (Reporting by Susan Taylor; Editing by Jonathan Oatis)