(MENAFN- ProactiveInvestors)
Shares of Ivanhoe () soared almost 10 percent today as the copper miner sold a 49.5% stake of Kamoa Holdings which owns the majority of the Kamoa copper project in the Democratic Republic of Congo’s Katanga province to China’s Zijin for US$412 million in cash.
The project faced construction costs of about US$1.4 billion and in the absence of realistic financing option Ivanhoe looked for partners reaching a deal with the Chinese Hong Kong listed mining giant with a citalization of US$10 billion.
Under the deal terms Zijin will pay half of the total upon closing following up with five successive tranches each every 3.5 months after the closing date.
Ivanhoe will benefit as Zijin now has inherited the task of securing financing for two thirds of the Kamoa’s total construction cost. The Chinese would gain control of the Project should it choose to exercise its option to buy an additional one percent stake.
“This agreement with Zijin one of the world’s most accomplished miners is further confirmation of Kamoa’s distinction as one of the most significant undeveloped mineral discoveries of our age and charts a course for the realization of significant benefits for all of Ivanhoe’s and Zijin’s stakeholders as well as the Congolese people” said Ivanhoe’s chairman Robert Friedland in a statement.
In April Zijin which also acquired a major stake in a operated project in Papua New Guinea today acquired a 9.9 per cent stake in Ivanhoe itself for US$105 million inevitably leading to its interests in Africa where Chinese companies have accumulated considerable experience.
China is has become Africa’s biggest source of direct investment and its capital is now making it possible for companies from all over the world to complete costly projects.
In March Zijin bought a 9.9 percent stake in Toronto-listed () for about C$105 million becoming a major stakeholder in the base metals company.
Ivanhoe has been seeking Chinese collaboration for some time and Zijin is one of China’s largest gold copper and zinc producers among other minerals.
Last February Ivanhoe said it had discovered a major new deep sulphide mineralization harboring zinc copper and pyrite thick over 60 m in the Kipushi mine located close to the Kamoa project. owns 68% of Kipushi while Gecamines owns 32%.
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