By Mark Herlihy
July 6 (Bloomberg) -- Central African Mining and Exploration Co., a producer of copper and cobalt, agreed to sell output of cobalt concentrate from its Mukondo Mountain operation in the Democratic Republic of Congo to Zhejian Galico Cobalt & Nickel Materials Co.
Camec, as the company is also known, is on target to produce 8,000 metric tons of the metal in the current financial year, the London-based mine operator said today in a statement distributed by the Regulatory News Service. “This long-term sales agreement provides us with a guaranteed off-take and gives us direct access to the key Chinese market,” Chief Executive Officer Andrew Groves said.
Camec, founded by former England cricketer Philippe Edmonds, had proposed in October 2008 to buy a 78 percent stake in Galico. The deal wasn’t completed because of “uncertainty in the commodities market” and the company doesn’t plan to restart talks with Galico, Camec said today.
“Most miners in the DRC have historically sold their metal to metal trading companies like Glencore, which in small markets like cobalt, are able to stabilize prices,” Brock Salier, an analyst at Ambrian Partners Ltd. in London, wrote today. “With Camec selling 8,000 tons per year directly to the Chinese, this may cause a tightening in the secondary traded market.”
Camec declined 0.5 penny, or 4.5 percent, to close at 10.5 pence in London trading. The shares have risen fivefold this year, boosting the company’s market value to 294.4 million pounds ($477.6 million).
Cobalt is used in jet engines and mobile-phone batteries.
To contact the reporter on this story: Mark Herlihy in London at mherlihy1@bloomberg.net
Last Updated: July 6, 2009 11:48 EDT
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