Camec signs cobalt sales deal with Chinese firm

Africa-focused emerging miner Central African Mining and Exploration Company (Camec) has entered into a long-term sales agreement with China’s Zhejiang Galico Cobalt & Nickel Materials, to deliver its Mukondo Mountain mine’s entire annual production of cobalt contained concentrate.

The mine, in the Democratic Republic of Congo (DRC) produces between 6 000 t/y and 8 000 t /y of cobalt in contained concentrate.

The product would be sold to Galico, one of the largest chemical salt producers in China, at prevailing market prices, the London-listed Camec said in a statement.

The board believed that the long-term sales agreement would provide it with a significant presence in one of the world’s fastest growing economies, and access to Galico’s international sales and distribution network.

“Our cobalt operations are performing well, and we are on target to produce 8 000 t of cobalt during the 2009/10 financial year. This long-term sales agreement provides us with a guaranteed off-take and gives us direct access to the key Chinese market,” said Camec CEO Andrew Groves.

Camec said that commissioning of its 3 200 t/y cobalt solvent extraction and electrowinning (SX/EW) line was on target to start by September, with full output expected to be achieved in March 2010. The cobalt SX/EW linewould produce cobalt metal, and is expected to bring significant cost savings to the overall cobalt operation, as well as increase margins going forward.

“Together with our copper production at Luita, and our trucking operation Sabot, Camec has three strong streams of revenue to provide a solid foundation for growth,” said Groves.

Meanwhile, Camec stated that it would not complete the proposed acquisition of Galico, as reported in October 2008, owing to the ongoing uncertainty in the commodities market, and the general economic climate over the past eight months.

“Camec does not plan to recommence discussions regarding the acquisition of an equity position in Galico,” the company stated.