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Metmar invests in DRC, Rwanda tin assets

23 January 2007

JSE-listed commodities trading company Metmar announced on Tuesday that it had signed agreements facilitating its investment in a newly-formed regional mining company, Kivu Resources, operating in the Democratic Republic of the Congo (DRC) and the Republic of Rwanda (Rwanda).

A consortium consisting of Edin Mining Limited, a mining investment company domiciled in the British Virgin Islands, Ireland-based Coronation Capital Limited and Metmar Limited would acquire a 50% stake in Kivu Resources. The consortium has an option to increase its shareholding in Kivu Resources to 70%.

Kivu Resources, through its wholly-owned local companies, would hold a number of assets in the DRC and Rwanda, including a management agreement with State-owned Sakima, in the DRC, to manage tin and tantalum production from small-scale miners. Moreover, it would have an option to acquire an 80% shareholding in Sakima's mining permits, a joint venture with the government of Rwanda on the Gatumba mining permits as well as a number of prospecting permits in the region.

“Historically, the area was a globally important tin and tantalum producer. However, production was brought to a virtual standstill about 20 years ago due to low tin prices and political instability in the region,” Edin Mining CEO Alan Smith, who is also the CEO designate of Kivu Resources, explained.

“The consortium brings significant funding and mining expertise to the venture, essential elements required to convert these known deposits into modern day Jorc/Samrec-compliant resource and reserve statements during the next 18 months.”

Initially, the focus would be on the tin, tantalum and tungsten minerals that were known to exist on the concessions.

Commenting on the global tin market, Metmar CEO David Ellwood said that prices were at new highs of over $12 000 a ton on supply fears, driven primarily by the crisis and future uncertainty in the Indonesian tin industry.

“Indonesian supply shortages are anticipated during 2007 and the region's future as the second-largest global tin producer hangs in the balance.”