Plunging World Metal Prices, Lack of Financing Hurt Geovic Cameroon Project-Executive
Jun 11, 2013 16:50:40 (ET)
By Emmanuel Tumanjong
YAOUNDE, Cameroon--Geovic Cameroon Plc, the local affiliate of Colorado-based Geovic Mining Corp., has been immobilized by plunging world metal prices and lack of financing in its efforts to kick-start the mining of nickel, cobalt and manganese in Cameroon, an executive said Tuesday.
The company secured a mining license, the very first issued by Cameroonian President Paul Biya, in 2013. But it hasn't been able to start commercial drilling to date.
Geovic (GMC.T, GVCM) has been in fruitless talks with several partners to get $615 million of the total $1 billion it needs for the mining project on the Nkamouna site in east Cameroon.
"We've been negotiating with several groups over a long period of time. We are now focusing mostly on one and we believe that we will hold last-stage negotiations with this group," the company's acting general manager in Cameroon, Timothy D. Arnold, said in Tuesday's state-run daily "Cameroon Tribune."
Mr. Arnold said "it's disappointing that they're taking so long to get these things done but I think we're at a point now where we're hoping that we can finish the negotiations so that everything can work."
World metal market price trends are also a hurdle for the project.
According to Mr. Arnold, "...when you look at the quantity you're going to generate, you look at the different prices. In 2008, the price of cobalt was 50 dollars, now it's about 11 dollars. Everything comes back to the economics and it's a long-term project to cost a lot."
Metal reserves at the Nkamouna site are estimated at 121 million tons.
Geovic owns 60.5% of Geovic Cameroon Plc, while the Cameroonian government-run National Investment Corporation owns the remaining 39.5%.
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