DRC: Dispute bewteen CMOC and Gécamines over Tenke Fungurume would reveal alleged under-reporting of profits
Summary
Date Reported: 23 Jun 2022
Location: Congo (the Democratic Republic of the)
Companies
Tenke Fungurume Mining (TFM) (joint venture between CMOC and Gecamines) - Parent Company , CMOC Group Limited (formerly China Molybdenum) , GécaminesProjects
Tenke Fungurume - OperationAffected
Total individuals affected: Number unknown
Public entity: ( Number unknown - Congo (the Democratic Republic of the) , Mining , Gender not reported )Issues
Payments to governments , Tax avoidance & evasionResponse
Response sought: No
Source type: News outlet
"One of world’s biggest cobalt mines is at stake in Congo fight", 23 June 2022
"A top executive from state mining company Gecamines said that partner CMOC Group Ltd. owes $7.6 billion in overdue payments, and even accused the Chinese metals producer and trader of posing a threat to national security. CMOC said it denies the allegations, “strongly” opposes what it views as unjustified attacks, and will defend its rights and interests.
The crux of the dispute is over mineral royalties. Gecamines, which owns 20% of the Tenke Fungurume mine, accuses controlling shareholder CMOC of under-reporting mineral reserves and hiding data to avoid triggering higher payments under their agreement...
CMOC bought control of Tenke Fungurume Mining Sarl from Phoenix-based Freeport McMoRan Inc. about five years ago in a deal that ultimately cost the company more than $3 billion. CMOC announced a $2.5 billion injection into the mine last year in order to double production, raising questions from Gecamines and the government about whether it was under-reporting its reserves.
According to its 2010 amended mining convention, Tenke Fungurume Mining is supposed to pay Gecamines a royalty of $12 for every ton of proved and probable recoverable reserves of copper beyond 2.5 million tons..."