RMMI invests $250m in Congo, acquires stakes in two mining companies

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RMMI also announced the formation of Ras Al Khaimah Minerals & Metals Congo (RMMC), a special purpose vehicle (SPV) that will operate in Congo.

The Democratic Republic of Congo is one of the world's largest resources for Copper & Cobalt and RMMI has identified sizeable opportunities in the mining and processing of Copper and Cobalt. In fact, RAK Government has already invested in real estate and hydropower projects in Congo.

The move is in line with the 'Integrated' industrial minerals & metals strategy adopted by Ras Al Khaimah (RAK) Government. On February 18th, 2008, RMMI signed a Memorandum of Understanding (MoU) with the Government of South Sumatra Province, Indonesia, which covers the entire mining-to-export chain of coal industry and developing a world class integrated industrial and logistics infrastructure including rail transport corridor, deep water sea port to handle bulk and container cargoes.

RMMC has invested $50m in acquiring stakes in two companies holding vast copper mines. The company has acquired 50% stake in Katanga Minerals Processing (KMP), Congo, which holds a mining concession for copper and cobalt for approximately 860 square kilometers in the Katanga region of Congo.

RMMC has acquired 50% stake in Premiere Miniere Du Katanga (PMK), Congo, which holds a mining concession for over 1890 square kilometers.

RMMI is setting up a world class Copper & Cobalt smelter plant in the Katanga region of Congo at an initial investment of $200m.

Commenting on the investments and acquisitions, Mr. Madhu Koneru, Managing Director, RMMI, said: 'We are pleased to announce the formation of RMMC along with two significant acquisitions in Congo. These acquisitions have set the pace for the company and will allow us to get a foothold in the world's largest resource for Copper & Cobalt. The acquisitions will enable us to get into high-end metal products right from the beginning.'

'Analysts' projections for key metals and minerals such as copper and coal suggest that demand could double and even triple over the next 25 years. Firm global economic activity led by China and India is expected to support strong increases in demand for most metals and minerals over 2008 and 2009 and the two acquisitions will help cater to this growing demand,' he added.

Newly appointed Managing Director of RMMC, Mr. Marc Orphanides, said: 'The acquisitions of KMP and PMK have taken place at a very opportune time considering that industrial minerals and metals are witnessing robust demand across industries and geographies. Our strategy is to vertically integrate the mining process by excavating Copper ore, enriching the extract from 4-5% to 25% and finally producing ingots to meet the local and export requirements. These two mines will allow us to rapidly ramp up our operations and achieve our stated goals.'

According to analysts, reflecting the tight market situation, Copper prices are currently in the range of $7000 - $8000 per ton - about three times higher than their average level through the 1990s and well above levels achieved in the early part of this decade.

Copper has been in use for at least 10,000 years, yet, it is still a high technology material, as evidenced by the development of the copper chip by the semi-conductors industry. Copper is used for conducting electricity and heat; communications; transporting water and gas; roofing, gutters and downspouts; protecting plants and crops, and as a feed supplement; and making statues and other forms of art.

Driven by consumer demand Cobalt has increased from $13/lb at the beginning of 2006 to $27/lb at the beginning of 2007 and closing 2008 it stood at $40.25/lb. Historically, Cobalt has been used in super alloys which are in turn used in gas turbines and this still remains an important market, particularly with the strength of the aerospace and power generation markets.

But more recently Cobalt's use in rechargeable batteries for cell phones, laptops and fuel efficient hybrid cars has created demand growth of 7% per annum. Researchers say that a Toyota Prius contains 2.5 kg of Cobalt in its batteries, production is currently 350,000 per annum and is set to reach over one million by 2012.