Huayou float to fund Congo venture

Zhejiang Huayou Cobalt Nickel Materials, the mainland's third-largest cobalt producer, plans a listing in either Shanghai or Shenzhen next year to fund its US$350 million investment in the Democratic Republic of Congo.

The privately owned firm, which hired Guang Fa Securities as sponsor, was changing its shareholder structure ahead of the listing, Ted Liu Shuwen, assistant to the company's president, said yesterday in Beijing.

The company also would borrow from the mainland's policy lenders to help finance the Congo project, which include a copper-cobalt mine, smelters and processing plants, Mr Liu said.

So far, it had invested US$40 million in the project, the total cost for which was expect to be US$350 million until 2015. Production at its Congo smelter was expected to start late next year or in early 2009, he said.

Mr Liu predicted that by 2015, Huayou's total copper smelting capacity probably would surge more than 20 times to 200,000 tonnes. Cobalt output is expected to jump five times to 15,000 tonnes,

Cobalt is a minor metal used to make alloys for production of jet engines, gas turbines and batteries.

Huayou and other mainland cobalt importers are setting up smelters and investing in mines in Congo after the African country imposed restrictions on concentrate exports early this year.