Huayou Cobalt Expands Congo Presence With $147.2 Million Copper Investment
Zhejiang Huayou Cobalt Co. Ltd. plans to invest $147.2 million in a copper project in the Democratic Republic of Congo (DRC), deepening the Chinese mining company’s presence in the central African country.
The investment — through a local subsidiary — will be used to develop a project located in the Lukuni region of the southern province of Haut-Katanga, the company said in a filing (link in Chinese) with the Shanghai Stock Exchange on Tuesday.
The project is expected to have an annual production capacity of 30,000 metric tons of electro-deposited copper, a raw material widely used in electrical-equipment and machine manufacturing.
Huayou Cobalt aims to “further explore the local mining assets and improve their use efficiency,” the company said in the filing.
In 2015, Huayou Cobalt secured 354,619 metric tons of copper and 62,903 tons of cobalt in the country after it signed a $52 million deal with Gecamines, DRC’s state-owned miner. And late last year, the company said it purchased a 51% stake in a company called Lucky Resources Holdings Ltd. for $66.3 million in exchange for the latter’s exploration permit for a Congolese mine.
“The latest copper investment is a diversified move for Zhejiang Huayou, which has mainly focused on Congo’s cobalt, the metal extracted as a byproduct of copper mining,” said Daniel Chen, a metals analyst at the consultancy CRU.
The company is among a group of Chinese refiners that are ramping up their projects in the central African nation, where more than 60% of the world’s cobalt is produced. This was largely driven by a booming Chinese electric-car industry as Beijing has for years promoted a shift from traditional internal combustion vehicles. Cobalt is a key component in the lithium-ion batteries that power electronic devices and electric cars.
The primary source of raw cobalt for these private Chinese companies is from freelance miners, known as “creuseurs,” the French word for “diggers.” This cobalt usually costs less than from big mining groups.
Huayou Cobalt had reportedly purchased large amounts of cobalt from such creuseurs, and the company came under international scrutiny in 2016 when London-based human rights group Amnesty International published a report showing that many of these workers were children operating in unsafe conditions.
Huayou Cobalt reported revenue of 9.6 billion yuan ($1.4 billion) in 2017, the majority of which was from producing and selling cobalt.
Contact reporter Mo Yelin (email@example.com)
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