China Railway cuts stake in DRC project

SHANGHAI – China Railway Group said on Friday it will cut its capital commitment to a Congo mining project to US$2,64 billion from US$4,04 billion and lower its stake as a state-owned resource firm joins the venture.

State-owned China Metallurgical Group Corp, a resources development company, will take a 20 per cent stake in the project and offer financing, China Railway, the country’s largest railway and highways builder, said in a statement. China Railway will lower its stake in the project to 28 per cent from 43 per cent and its partner Sinohydro Corp will reduce its holding to 25 per cent from 20 per cent, to make room for China Metallurgical’s investment.China Railway announced plans in April to set up the joint venture to invest in a copper and cobalt mining project in the Democratic Republic of Congo.One of the Congo partners in the project, Gilbert Kalamba Banika, transferred his 12 per cent stake to Congo Simco, a real estate management and land development firm, China Railway said.The amended terms of the joint venture agreement will lower China Railway’s share of responsibility for unsecured shareholders’ loans and assistance in arranging financing to slightly less than US$1,20 billion of the Chinese consortium’s US$2,90 billion total.Sinohydro and China Metallurgical will be responsible for US$852,5 million each.Nampa-ReutersChina Railway will lower its stake in the project to 28 per cent from 43 per cent and its partner Sinohydro Corp will reduce its holding to 25 per cent from 20 per cent, to make room for China Metallurgical’s investment.China Railway announced plans in April to set up the joint venture to invest in a copper and cobalt mining project in the Democratic Republic of Congo.One of the Congo partners in the project, Gilbert Kalamba Banika, transferred his 12 per cent stake to Congo Simco, a real estate management and land development firm, China Railway said.The amended terms of the joint venture agreement will lower China Railway’s share of responsibility for unsecured shareholders’ loans and assistance in arranging financing to slightly less than US$1,20 billion of the Chinese consortium’s US$2,90 billion total.Sinohydro and China Metallurgical will be responsible for US$852,5 million each.Nampa-Reuters