Zanaga Iron Ore gains mining licence for Congo project

by Reuters 0

AIM-listed Zanaga Iron Ore Co has been granted a mining licence for its Republic of Congo joint venture with Glencore.

This was announced by Zanaga on Friday, sending its shares up 8 per cent.

The company’s main mining project, to be developed in two stages, aims to harness one of the largest iron ore deposits in Africa and Zanaga said the licence will allow it to mine for an initial period of 25 years.

The licence can be renewed for 15-year periods, subject to further applications, Zanaga added.

Zanaga expects the project located in the southwest of the Republic of Congo, about 155 miles northwest of the capital Brazzaville, to mine 30 million tonnes a year of high-grade iron ore concentrate over 30 years.

The company, which has a market capitalisation of 80 million dollars, also said it signed a mining convention with the government, setting out financial and legal terms related to the construction and operation of the project.

“This is a huge tick in the box and Zanaga can now press on with financing discussions with renewed confidence,” Numis Securities analysts said in a note.

Zanaga Iron Ore owns 50 per cent less one share in the project through its joint venture with miner and commodities trader [DATA GLN:Glencore].

Shares in Zanaga, which is incorporated in the British Virgin Islands, were trading at 18.6 pence at 0716 GMT on the London Stock Exchange on Friday.