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[February 2007]
CAMEC to Acquire Major Chinese Cobalt Plant and Trading Operation
CAMEC, Central African Mining & Exploration Company Plc, the AIM quoted fully integrated exploration, mining, trading and investment company, has signed Heads of Agreement to acquire Zhejiang Galico Cobalt & Nickel Material Co Ltd and Alliance Minerals & Resources Trading Pty for US$42.5 million in a cash and shares deal. The acquisition will provide CAMEC with a foothold in China and also enables the company to leverage the financial benefits of becoming a fully integrated cobalt processor. CAMEC currently mines and processes copper and cobalt ore in the Democratic Republic of the Congo.Galico is one of the largest chemical salt producers in China specialising in the production of cobalt, nickel and copper inorganic salts and powders. Its primary asset is the Zhejiang chemical plant, situated in the Hangzhou Bay Fine Chemical Zone. Located close to the international airports of Shanghai, Ningbo and Hangzhou and the corresponding major seaports, Galico is ideally placed to expand its current markets both within China and internationally.
The 120,000 square metre property and plant has a production capacity of 2,000 metric tonnes per year of metallic cobalt in salts and 1,500 metric tonnes per year of metallic copper in salts. Galico aims to increase its production capacity to 3,000–3,500 metric tonnes per year of metallic cobalt in salts by year end 2007, which the directors believe will make it the largest specialised producer of cobalt salts in China.
Its extensive range of inorganic salts are used in widely varying industrial applications including cathodic material for rechargeable batteries, hard facing alloys, through to ceramic pigments and de-sulphurisation catalysts. Galico has an effective sales network across the world and established customer bases in Japan, Korea, South East Asia, Europe, Brazil, Australia, Canada and the United States.
CAMEC Chief Executive Andrew Groves said: "This is a key transaction for CAMEC giving us a strong foothold in the burgeoning Chinese market and direct access to the end users of the cobalt produced at our 50,000 sq m Luita plant in the D.R.C. As the fastest growing economy, we believe that it is imperative for our growth strategy to have a presence in China for the long term benefit of shareholders. CAMEC is also keen to add value at source by transferring the knowledge and expertise of cobalt processing at Galico and utilising it in the production of semi-finished products in the D.R.C. Our aim is to become one of the largest and most influential cobalt producers in the world.
"Essentially, we now have producing mines in the D.R.C, primarily on the C19 concession area in the Katanga Province, feeding our Luita facility. We have a 450 truck logistics operation to ensure product delivery and will have an industrial material plant in China with worldwide sales. This will stand us apart from other copper and cobalt miners and underlines the true ambition of the Company."
www.camec-plc.com
ENDS