On the afternoon of December 13, Luoyang Luanchuan Molybdenum Industry Group Co., LTD. (hereinafter referred to as "Luoyang Molybdenum Industry") announced that it intends to adopt CMOC Limited (Chinese name "Luoyang Molybdenum Industry Holding Co., LTD."),
The wholly-owned subsidiary of Molybdenum Lowe Holdings, Natural Resource Elite Investment Limited (" NREIT "), purchased from Freeport-McMoran Inc. (Delaware) (" FCX ") its Bermudan subsidiaries, Jenny East Holdings Ltd. (" Jenny East ") and Kisanfu Holdings Ltd.
(hereinafter referred to as "Kisanfu"), thereby indirectly acquiring 95% of the shares of Phelps Dodge Congo S.A.R.L. (hereinafter referred to as "PDC") and acquiring 95% of the interests in the Copper and cobalt mines of the Democratic Republic of the Congo (DRC).
The transaction has been closed on December 11, 2020 EASTERN Time and has been approved by the Government of the Democratic Republic of Congo (DRC) and the Bermuda Monetary Authority.
The Kisanfu copper and cobalt mine is located 33km southwest of the existing Tenke copper and cobalt mine in Luomu, also on the Kansuki fault, and is adjacent to glencore's Mutanda, mid-color Deziwa and other large copper and cobalt mines.
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Kisanfu has a total resource of about 365 million tons of ore, with an average copper grade of about 1.72%, containing about 6.28 million tons of copper.
The average cobalt grade is about 0.85% and the cobalt metal content is about 3.1 million tons.
The untapped mine is the largest known untapped cobalt deposit in the DRC and the world.
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When It acquired TFM in 2016, Lomu had the right of first refusal to buy Kisanfu, but the scope of the asset package, including Finland's Kokkola Cobalt smelter, and the consideration were not agreed upon and the company eventually gave up the right.
According to media reports, a number of Chinese and international mining companies later expressed interest in Kisanfu's assets, but as the financial situation of the freeport improved and the cobalt market was widely regarded as promising with the explosion of the electric car industry, the market of Kisanfu increased and the Freeport was very reluctant to sell.
Chinese miners are also less keen to take over Finnish smelters.
Kisanfu became a pure cobalt asset when Freeport sold the Kokkola smelter to Umicore for $200m at the end of last year, which was the reason for the renewed interest.
Speaking of consideration, the price is an order of magnitude higher than freeport would have expected a few years ago, and freeport's five years of patient waiting, combined with previous smelter divestitures, have been lucrative.
As a pure resource asset to be developed, Kisanfu's consideration is more leveraged and it is not uncommon for its value to increase by multiples.
You can also see this from the recent battle between Shandong Gold and Nordgold.
Glencore, the world's largest cobalt producer, is already in decline with Mumi's demise, and if Kisanfu gets up and running it will lock Lomb squarely into its unassailable position as the world's largest cobalt miner.
