Hi Chaz,
Hope everyone's ulcer is O.K. Here some news hot off the press...
Canadian Co. Stakes Future on Chaotic Zaire
VANCOUVER (Reuter) - Zaire's tumultuous rebel uprising is alarming foreign investors, but a Canadian company is standing its ground with a planned $1.3 billion mining project in the African country.
Tenke Mining Corp. of Vancouver is pressing ahead with efforts to develop a massive copper and cobalt deposit in Zaire's Shaba province even as fighting rages around it.
The company in December signed a deal with Zaire's government to exploit the mammoth Tenke Fungurume lode, the first significant investment in the country by a private mining concern since the 1970s.
It is bringing expensive drilling equipment to the site and preparing for an ambitious exploration program in April -- even as Zaire's President Mobutu Sese Seko's 32-year rule hangs in the balance.
The rebel advance "is not causing us any concern," said financier Adolf Lundin, Tenke's chairman and the mastermind behind the deal. "Everything is a challenge. But you know we overcome all the challenges."
Swedish-born Lundin, whose family holdings are managed from offices in Geneva and Vancouver, predicted a mine would go into production at Tenke Fungurume in 2000 as planned.
Tenke is among a handful of Canadian mining firms attracted by Zaire's untapped resource potential. Other mining firms shared Lundin's optimism, but many were more wary.
For example, Toronto-based industry heavyweight Barrick Gold Corp. halted all work and withdrew staff from a gold exploration program in the Kilo Moto district while it waited for the current crisis to end.
Canada's Banro Resource Corp., whose gold properties lie behind rebel lines, similarly suspended activity and Trillion Resources Ltd. slowed its work.
But Vancouver's International Panorama Resource Corp. is pushing ahead. "It's business as usual," said President Ken MacLeod. His company is developing another copper-cobalt deposit in Shaba province and expects to complete a prefeasibility study next month.
Mineral-rich Shaba in the southeast is a key battleground between rebel fighters and Zaire's army. The forces of rebel leader Laurent Kabila have swept past Tenke Fungurume in their drive toward the regional center Lubambashi, but did not attack the site, Lundin said.
In fact, Kabila has sought to reasure Tenke and other foreign companies. He met with some companies and even sent an emissary to a recent high-profile Toronto mining conference, executives said.
"We have been told that they are free enterprise-oriented and they respect foreign investment and that they understand the enormity of our project and the benefits it gives to the country," Lundin said.
Tenke was confident that even if Mobutu were ousted its agreement to develop the deposit would stand. "We have a water-tight agreement with the country, which is going to survive whatever government changes there are," Lundin said.
The move into Zaire fits with the Lundin family's bold style, which has taken it to areas perceived as too risky by many companies. A consortium including Anglo American Corp. of South Africa Ltd., Amoco Corp. and Mitsui and Co. Ltd. spent $268 million on Tenke in the 1970s but balked at the political risks.
Lundin made big profits by investing in a copper project in Argentina when that country was unpopular, and then selling out to major mining companies in 1994. Other Lundin firms have ventured into the Sudan, Libya, Eritrea and Somalia.
"We are the trailblazers," Lundin said.
In the race for Tenke Fungurume, Lundin beat out other bidders with a deal giving Tenke a 55 percent stake in the Zaire property in exchange for payments to Zaire's state mining company totaling $250 million by 2003.
Tenke expects project costs to amount to $1.3 billion by 2008. Lundin is responsible for arranging all financing needed to bring a mine into production and estimates the copper and cobalt resource at one billion tons of ore. |
