Pretoria - Zama Resources, the black South African forestry company, will sign a joint-venture agreement with the government of the Democratic Republic of Congo (DRC) at the weekend, allowing it to take over a substantial area of sustainable forest in Pointe Noire.
Henri Djombo, the DRC's forestry minister, said yesterday that the transaction related to the government's decision to privatise Eucalyptus du Congo, a government-owned forestry company.
Djombo said Zama Resources would be given a 70-year lease over the forests.
Mcebisi Mlonzi, Zama Resources chairman and chief executive officer, said the value of the deal was confidential and he would not comment on the financing arrangement either.
The company was formerly majority owned and managed by the renewable resources division of Shell International. Mlonzi said Shell International had paid $17 million when it acquired 50 percent of the company in 1992.
Djombo said Shell International had sold its shareholding back to the government in June last year and the idea was to allow the asset to be privatised and logs to be beneficiated locally rather than merely being exported.
He said that, in terms of the joint venture deal, the export of logs would be permitted for the first three years but thereafter only a final or intermediate product could be exported.
Zama Resources is also one of the preferred bidders for the Northern Province and Mpumalanga forest assets of Safcol, the forestry parastatal. The other preferred bidder is the Paharpur Consortium of India.
Mlungisi Kwini, a Zama Resources director, said Eucalyptus du Congo managed assets of about 42 000ha of eucalyptus plantations at Pointe Noire.
Kwini said current sustainable production levels of 450 000m3 a year should increase to between 700 000m3 and 800 000m3 a year under optimum management regimes, such as those in South Africa.
Kwini said Zama Resources' management approach was for the company to become a market leader with a world-class status.