Katanga Mining Ltd.'s majority-owned Kamoto Copper Co. SARL agreed to purchase property around its existing mining concessions in Congo from Gécamines SA for up to US$250 million.
The Glencore PLC unit holds a 75% stake in the Kamoto copper-cobalt joint venture, while state-owned Gécamines owns the remaining 25%.
The property covers the preferred location for building a new long-term tailings facility and other blocks that will allow Kamoto to more efficiently operate its mines, facilities and other key infrastructure, according to a Dec. 20 news release.
Katanga noted that the acquisition, expected to close in 2020, would mitigate risks associated with its operations due to land constraints.
The company will initially pay US$150 million and is required to remove tailings, estimated at about 15 million dry tonnes, to a nearby location. Up to US$120 million of the total consideration can be offset against making "pas de porte" payments to Gécamines if Kamoto Copper declares a JORC-compliant reserve or mines resources in the purchased areas.
Gécamines will also receive a new 2.5% royalty on net sales from the newly acquired areas if Kamoto mines any resources there.
Kamoto Copper expects to fund the consideration payments from existing liquidity, according to the release.