Charlotte Mathews
22 April 2008
Johannesburg — CENTRAL African Mining & Exploration Company (Camec), a copper miner in the Democratic Republic of Congo, has taken a substantial shareholding in Metorex's listed Congo subsidiary, Copper Resources Corporation (CRC).
The deal might bring Metorex (MTX) head to head with the controversial UK-listed mining company over management of CRC. In the past two years, Camec has frequently been in the news. Last year, Congo's government said it would revoke the company's copper and cobalt licences in Katanga province because they had been fraudulently obtained.
Camec, which had launched a hostile bid for another Congo copper company, Katanga Mining, withdrew its bid because of the uncertainty over its licences. The Congolese government confirmed the validity of the licences last month .
Zimbabwean businessman Billy Rautenbach is rumoured to hold just less than 20% of Camec's shares after selling certain Congolese assets to the company two years ago.
Camec was founded by former UK cricketer Phil Edmonds. Camec said yesterday it had taken 21% of CRC, in line with its "stated strategy of building a major copper and cobalt mining operation in the Congo". It had paid for 18- million CRC shares with a combination of cash and Camec shares, it said.
Asked whether Camec planned to buy more shares in CRC or make a bid for control, Camec CEO Andrew Groves said at this stage it would be a strategic investment.
It would be very difficult to make a hostile bid for the company, as it had only three major shareholders, he said. It was possible Camec would seek a seat on the board, but it was too early to say as the deal had just been concluded.
Camec said it would use its expertise to help CRC bring its dormant assets back into production. However, Metorex, which holds 46% of CRC, holds the management contract. It has also sealed an agreement to acquire a 5% stake in CRC's 75% held subsidiary Miniere de Musoshi et Kinsenda , which would give it an effective 51% in the asset.
Metorex CE Charles Needham said yesterday the agreement would be enforced once the Congo 's review of mining licences was complete.
Needham said Camec would be "hard pressed" to try to take control of CRC.
Although 54% of the shares were in the hands of the general public, some of those shares were tightly held. He said he could not suggest why Camec was interested in CRC as none of Camec's properties was close to CRC's. However, Groves said Camec could see a lot of value in CRC's assets.
CRC owns a stake in three high-grade deposits in Katanga province. Two of them, at Kinsenda and Musoshi, are flooded while the third, Lubembe, is an exploration property.
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