Banro dangling Congo gold mine to best bidder

Banro’s second producing gold mine, Namoya, began commercial production in 2016. (Image courtesy of Banro.)

Canada’s Banro Corporation will put its Namoya gold mine in eastern Congo up for sale at a significant discount, after repeated attacks from armed rebels forced it to halt operations once again in September.

The Toronto-based miner, present in eastern DRC since the 1990s, said the decision to offload Namoya was based on the lack of government support to keep its staff and assets safe.

Banro had a challenging run that nearly ended in bankruptcy three years ago. The government had confiscated its licenses during a civil war that killed five million people, returning them in 2002 as the conflict drew to a close.

Last month Banro sold its other mine in Congo — Twangiza — for just $1 because the asset’s liabilities exceeded projected revenue

In the following years, the company built its Twangiza and Namoya mines. The latter has been since then the target of multiple attacks, which led the cash-strapped company to halt operations in 2017.

A Canadian court approved a rescue plan in early 2018, enabling the company’s main creditors — Chinese state-controlled Baiyin International Investments and Connecticut-based Gramercy Funds Management — to become its senior shareholders.

The move allowed Banro to resume operations. Fresh attacks, however, including the kidnapping of four employees in July, disrupted mining activities once again.

The company ended up signing an agreement with the leader of the Mai Mai militia, allowing artisanal local miners to temporarily extract gold from Namoya’s site in exchange for the release of the abducted workers, which were held for several weeks before being released, La Libre Afrique reported.

Banro is now seeking to exit the country. Last month, it sold its Twangiza mine to minority shareholder Baiyin International Investments of China for just $1, as the asset’s liabilities exceeded projected revenue, chairman Brett Richards told Reuters on Friday.

The executive is hoping he can do the same with Namoya. “I’m actively trying to sell the business for very, very low value to see if somebody else can come in and accept the unstable environment that has been created by the government,” Richards said.

(With files from Reuters)

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