How to do business in Africa: copper-cobalt (II)

According to wikileaks, one of the cables from USA Embassy in Kinshasa (11/07/2007) mentions rumors (always rumors) that several copper mining companies were exporting uranium from the Democratic Republic of Congo (DRC), the most important being Malta Forrest Company. The cable also suggests high level of corruption.

Why they should export uranium? The trade of copper and cobalt is very profitable, they do not need to play dirty games.

According to several sources, the forecast in DRC calls for copper output to increase from an estimated 409,935 tonnes in 2010 to 851,608 tonnes in 2012. At the same time, cobalt output is forecast to increase from an estimated 39,327 tonnes in 2010 to 91.355 tonnes in 2012.

At 9.800$/Tn and 39.000$/Tn prices for copper and cobalt, it gives a market of $12 billion. To make a comparison, it represents more than 50% of GDP of the Democratic Republic of Congo.

The most active companies in copper and cobalt mining in DRC are:

Malta Forrest Company-George Forrest

http://www.forrestgroup.com/fr/index.html

Private company. Belgium

 

Anvil Mining

http://www.anvilmining.com/

Public company. Canada

"The Company subscribes to the principle that the most important thing a corporation can do for both the country in which it operates, as well as its host communities, is to authentically contribute to a prosperous national economy"

Freeport McMoran

http://www.fcx.com/

Public company. USA

"Safe workplaces, trained and motivated employees, and engaged communities are key concepts of sustainable development"

First Quantum

http://www.first-quantum.com/s/Home.asp

Public company. Canada

"The overall objective of our socio-economic development program and projects is to improve the quality of life for our employees, their families and their immediate communities"

Lundin Mining

http://www.lundinmining.com/s/Home.asp

Public company. Canada

"Lundin Mining is supportive of the Voluntary Principles on Security and Human Rights, which provides guidance to companies in maintaining the safety and security of their operations within an operating framework that ensures respect for human rights and fundamental freedoms"

Katanga Mining/Glencore

Public company. Canada/Private company. Switzerland

These companies have certain common factors. Apart from a coincidence that most are placed in Canada, all of them are headquartered out of Africa. 

Of the 45 members of the board of directors of these companies, 0% are black and 0% are women, which is somehow different from the average in DRC, but very African!

Last but not least all of these companies  have suffered from false accusations, but that's another story.

Investors: Be alert. 
The market is moving. Lundin has acknowledged announcement of unsolicited take-over by Equinox Minerals Limited (28/02/2011), and Glencore could go public through an IPO. In this case the company could be obliged to disclose aditional information, but this is a small price to be paid for a rumored $60 billion IPO. The investment bankers' fee could be in the range of $500 million. Do not ask if this money could be used elsewhere in DRC for hospitals, schools, waste treatment plants or similar. 

We will offer them to purchase shares: