GÉCAMINES reaches an agreement with KATANGA GROUP, and defines with GLENCORE the foundations for a new win-win partnership

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LUBUMBASHI, Democratic Republic of CongoGécamines together with its subsidiary Société immobilière du congo (“SIMCO”), and Katanga mining limited with some of its affiliated companies (the “KATANGA GROUP”) and Kamoto copper company (“KCC”),  have signed a settlement agreement.

Under the terms of the Agreement,the companies targeted goals included KCC’s net equity will be restored in accordance with applicable laws, KCC’s indebtedness towards the GLENCORE group will be reduced from 9 billion USD down to 3.45 billion USD as at 1st January 2018, Interest rates applicable on intra-group loans are revised and shall no longer exceed 6% per year, On the basis of KCC’s current business plan, as early as the 2019 fiscal year, GÉCAMINES will start, for the first time, receiving dividends, which assessed cumulated amount that exceed 2 billion USD over the next ten years.

Others are: The profits will allow for the payment of corporate taxes being likely to significantly contribute to the replenishment of the Congolese State’s treasury, a better valuation, in the future, of GÉCAMINES’ contribution of the copper and cobalt deposits to the partnership through a significant increase of the amount per ton of the pas de porte, from 35 USD to 110 USD, and which can reach 170 USD in certain scenarios, a significant increase of the valuation of GÉCAMINES’ ownership in KCC, whose value was until then nil due to the high level of indebtedness of the company, The waiver by KCC to the benefit of the JORC certified reserves amounting to 3,992,185 tCu and 205,629 tCo (the “Reserves”), releasing GÉCAMINES from its obligation to deliver the Reserves or, failing, to pay a counter-value of a maximum amount of 285 million USD, the payment by the KATANGA GROUP of a settlement indemnity (150 million USD) in favor GÉCAMINES and the withdrawal by GÉCAMINES and SIMCO, at closing, from the judicial proceeding initiated before the Commercial Court of Kolwezi on 20th April 2018.

GÉCAMINES welcomed the outcome of the discussions with the KATANGA GROUP and its majority shareholder GLENCORE PLC, and the new foundations now set for the partnership, with a view to an effective sharing of wealth, with immediate financial benefits for all the stakeholders, and in particular the Democratic Republic of the Congo and the affected communities.

GÉCAMINES hopes that upcoming negotiations with other partners and companies will be conducted in a similar open and respectful climate, and will reach the same satisfactory outcome.