Chinese conglomerate CITIC's subsidiary CITIC Metal has agreed to acquire an additional 10% stake in Canadian mining company Ivanhoe Mines for C$612m ($454m).
The equity investment to be made through its subsidiary CITIC Metal Africa Investments will increase the Chinese company’s stake in Ivanhoe Mines to 29.3%. It is expected to help the Canadian company to become a top copper and zinc producer in the Democratic Republic of Congo (DRC) and a leading producer of platinum-group metals, copper and nickel in South Africa.
The transaction marks CITIC Metal’s second major investment in less than a year in the Canadian mining company. Last year, it made an investment of $560m to help the Canadian firm advance the development of the Kamoa-Kakula, Platreef and Kipushi mines in Southern Africa.
Its latest investment will help the Canadian miner to move ahead with the construction of the $1.1bn Kamoa-Kakula Project’s first 6 Mtpa high-grade copper mine at the Kakula deposit in DRC.
Ivanhoe Mines co-chairman Yufeng Sun said: “Today’s investment consistently advances CITIC Metal’s implementation of its investment strategy in mining. It demonstrates CITIC Metal’s firm confidence in the long-term potential of Ivanhoe Mines’ assets, the resource potential of the Southern Africa region and the mining industry as a whole.”
Zijin Mining Group, the joint venture partner in the Kamoa-Kakula Project is expected to fund its equivalent share of nearly $540m of the initial capital costs of the mine. The company also has a stake of 9.9% in Ivanhoe Mines.
The Kamoa-Kakula partners are also in financial discussions with international export-credit agencies and equipment-finance providers to secure funding for the copper project.
Ivanhoe Mines co-chairman Robert Friedland said: “The investment announced today will comfortably provide Ivanhoe with the equity cushion required to fast-track Kamoa-Kakula’s 6 Mtpa Phase 1 mine to production.
“More importantly, it also is a profound vote of confidence in our management, in our key stakeholders and partners, and in the promising future of the Democratic Republic of Congo and South Africa. We look forward to hosting the DRC President at the Kamoa-Kakula and Kipushi projects later this year.”