In the Republic of Congo, the planned Zanaga iron ore mine is expected to produce 12 million tons of iron ore per year in its first phase, requiring an investment of $1.9 billion. Its owner, ZIOC, has in recent months been taking steps to move the project toward a final investment decision.

Zanaga Iron Ore Company (ZIOC), a junior miner based in the British Virgin Islands, plans to sell a majority stake in its Zanaga iron ore project in the Republic of Congo.

The company said on Tuesday, February 10, that it signed a memorandum of understanding with private investment firm Red Arc Minerals (RAM) to sell up to 87.5% of the project for $150 million. The move comes nearly a year after Swiss mining group Glencore, formerly a key partner in the asset, completed its exit.

Advancing Toward Final Investment Decision

Glencore, long a shareholder in Zanaga, gradually exited the project, selling down its stake between 2022 and March 2025. About a year later, Red Arc Minerals moved to acquire a controlling interest. The firm, which aims to specialize in iron ore deposit development, was co-founded by Mick Davis, a British-South African businessman and former executive of Anglo-Swiss mining group Xstrata, which merged with Glencore in 2013.

Under the memorandum of understanding, RAM will acquire its stake in stages. An initial $25 million payment will secure 20% of Zanaga’s shares. A second tranche of $125 million may be completed within 18 months, raising RAM’s total stake to 87.5%. ZIOC would retain the remaining 12.5% and receive a 1% royalty on future mine revenues.

“I am pleased to announce the signing of binding terms with Red Arc Minerals [...]. The transaction represents a major acceleration of the Company’s growth strategy by providing the non-dilutive capital required to advance the Zanaga Project through the pre-production phase and towards a final investment decision,” said Martin Knauth, ZIOC’s chief executive officer.

For ZIOC, the transaction could accelerate progress at Zanaga ahead of a final investment decision (FID). The company plans to use the first tranche to complete the front-end engineering design (FEED) study and other work required to reach that milestone. Once an FID is taken, ZIOC intends to finance construction pro rata to its remaining stake.

If finalized, the structure would leave Red Arc Minerals bearing the majority of capital expenditure, given its controlling position. The transaction remains subject to the signing of definitive agreements and all required regulatory approvals, including approval by ZIOC shareholders. Both parties aim to formalize terms by May 31, 2026.

Up to 30 Million Tons of Iron Per Year

Red Arc Minerals has not yet detailed its strategic rationale for the deal. The two companies are already linked through New York-based private equity firm Heeney Capital, which is an indirect shareholder in ZIOC and also a co-founder of Red Arc Minerals. Questions also remain over operational management of the project if the transaction is completed.

If concluded, the agreement would add a strategic mining asset to Red Arc’s portfolio, with an initial production capacity of 12 million tons of iron ore per year, expandable to 30 million tons in a second phase. Initial construction investment is estimated at $1.94 billion, with an after-tax net present value (NPV) of $3.68 billion.

The deal comes as several new African iron ore projects advance to supply the global market. In Guinea, the Simandou megaproject recently entered the development phase. In Gabon, Australian company Genmin is progressing the Baniaka project. Other countries, including Cameroon, are also developing new production sites. It remains unclear how Zanaga will position itself as the global iron ore market is expected to move into surplus by 2027 due to Simandou, according to S&P Global.

Meanwhile, ZIOC continues efforts to enhance Zanaga’s economic and strategic profile. In August 2025, the company said it would revise the project’s development plan to produce an iron ore concentrate suitable for low-carbon iron pellet production. Test results related to this revised strategy are pending, and no offtake agreement has yet been announced for future output.

Aurel Sèdjro Houenou