GLNCY Glencore Plc (PK)

By Alex MacDonald

LONDON--Iron ore explorer Zanaga Iron Ore Co. (ZIOC.LN) said Wednesday the mining convention for its its Zanaga iron ore project, a joint venture with commodities titan Glencore PLC (GLEN.LN), has been approved and adopted into law by the Republic of Congo.

The mining convention, which was ratified by the republic's parliament in the capital of Brazzaville, gives the joint venture a 25-year operating license starting in Aug 2014 with options to renew for terms of 15 years.

The joint venture will pay a mining royalty of 3% on top of specific taxes that will be applied to the project. There will be a five-year tax holiday following the first construction phase and a 15% corporate tax rate applied thereafter. The Republic of Congo will receive a 10% stake in the joint venture.

The project is forecast to cost $4.7 billion to build, according to a Zanaga study published in May 2014. The first phase of construction would cost $2.2 billion and result in an operation capable of producing 12 million tons of iron ore a year. This would then increase by 18 million tons a year to 30 million tons a year in a second $2.5 billion phase, creating a mine that will remain operational for 30 years.

Zanaga, which has a 50% less one share interest in the project, announced a $110.08 million impairment of the value of the project in June last year due to a drop in the benchmark price for the key steelmaking ingredient. This resulted in a wider pretax loss of $164.77 million for the fiscal 2014 year.

Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

June 29, 2016 03:26 ET (07:26 GMT)

Glencore (PK) (USOTC:GLNCY)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024

Glencore (PK) (USOTC:GLNCY)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024