Announcement of IFC Investment in Societe Miniere de Mauritanie (Somima) on May 23, 1968

HOL~ FOR RELEASE INTERNATIONAL FINANCE CORPORATION . 8 1 8 H STREET. N.W., W~SHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IFC News Release No. 68/6 Subject: IFC Investment in For Release in Morning Newspapers of Societe Miniere de Thursday, May 23, 1968 Mauritanie (Somima) NOUAKCHOTT, Mauritania, May 22 -- Mauritania's Akjoujt copper deposits in the Sahara desert are to be opened up by an international \\ consortium which signed agreements here today to Hnan:;~e a $60 million venture. Societe Miniere de Mauritanie, called Somima, was established by / a group led by Charter Consolidated Limited of London. Somima will develop the mine, which will produce an average o:afabout 90,000 metric tons of copper concentrates a year • • Somima's operations are being supported with the largest commitment $20 million -- ever made by the International Finance Corporation (IFC), the World Bank affiliate that finances private enterprises in developing countries, as well as by the Government of Mauritania. The European Investment Bank!the economic development institution affiliated with the European Economic COlllllUnity, supplied $11 million of Somima capital in the form of a long-term loan. the sponsoring group includes Charter Consolidated ;.}md ', four French companies -- Societe Miniere et Metallurgique de Penarroya S.A., the Bureau de Recherches Geologiques et Minieres, the Banque de Paris et des Pays-Bas, and Compagnie Financiere pour l'Outre-Mer (COFIMER). (more) •  - 2 - • Participations by other investors in the IFC cODlllli:tment extended the international partnership in the venture for developing the Saharan copper deposit to Switzerland, Italy and the Middle East. Handelsfinanz A.G. of Switzerland, a member of the Banca Commerciale Italiana Group, became a major participant in the project by investing in a substantial share of the IFC financing. The Handelsfinanz invest- ment was larger than any previous participation by one or several investors in an IFC undertaking. The Kuwait Foreign Trading Contracting and Invest- ment Company took over a further important portion of the IFC's financing of Somima. The Somima project will be the second largest mining venture in Mauritania and will contribute significantly to the nation's economy. • The Akjoujt deposits have been known since the early 1930s but have defied previous development because the upper part of the deposit is a refractory copper oxide, overlying the usual copper sulphide ores. Earlier development was prevented by the lack of a large scale, proved method for economical treatment of the oxide ores, although the sulphide ores can be treated by conventional methods. However, arrangements have been made by Charter Consolidated for the use by Somima of a new technique called Torco (treatment of re- fractory copper ores) which can successfully process copper oxide ores, developed in tpe Zambia copper fields by Anglo American Corporation Group. Extensive tests indicate the new method will permit develop- ment of the Akjoujt deposits on a competitive basis • • (more)  - 3 - • The Govermnent of Mauritania will receive over the 11,fe of the mine substantial profits. ;) income from taxes, duties and its share in Somima's The project will also augment Mauritania's development through contributions by Somima toward construction of a tarred road between Akjoujt and Nouakchott, construction of a water supply system involving the laying of a 70-mile pipeline, and construction of a modern township to be built in the Sahara near the mine site. The Mauritanian Government plans to expand shipping facilities at Nouakchott to handle Somima ore concentrate shipments. Related shore installations at the port will also be improved. Somima's financing consists of $23 million in equity and $36.8 million in loans. In addition to sources of funds already named, in- • cluding the Mauritanian Government, which is supplying a substantial part of Somima's equity capital, funds are also being provided through a long-term loan granted to Sotnima by Credit Lyonnais and further financing from the Banque Internationale pour l'Afrique Occidentale, in the form of short and medium term credits. Technical direction, supervision and administrative services to Somima will be provided by a Charter Consolidated subsidiary company. IFC's $20 million investment in Somima compares with its previous largest commitment of $12 million, in an electric power utility in the Philippines in 1966. A number of leading government and business leaders took part in the signing of the agreements today. They include: 4I (more) • - 4 - His Excellency Moktar Ould Daddah, President of the Islamic Republic of Mauritania; 0 Mr. Mohamed Ba, President of Societe Miniere de Mauritanie; Mr. Martin M. Rosen, Executive Vice President of the International Finance Corporation; Mr. Yves le Portz, Vice President of the European Investment Bank;' Mr. w. D. Wilson, Managing Director of Charter Consolidated Limited; Mr. Pierre Mayer, Director of Societe Miniere et Metallurgique de Penarroya S.A.; Mr. George Mesmin, Secretary General of the Bureau de Recherches Geologiques et Minieres; Mr. Jean Traub, Senior Vice President of the Banque de Paris et • des Pays-Bas; Mr. Louis La Caille, Consulting Engineer of Compagnie Financiere pour l'Outre-Mer; and Dr. Sylvano Guarino, Manager of Banca Commerciale ltaliana. # # # -.