Zambia tipped to make a decision on Mopani this month
Sibanye is in the running and has experience in turning around old and struggling operations
10 October 2023 - 17:07
by Felix Njini
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The Zambian government is expected to make a final decision on the sale of Mopani Copper Mines in October, securing a new investor for the assets it bought from Glencore in 2021, a source with knowledge of the matter said.
Zambian mines minister Paul Kabuswe initially said a new investor for the copper mines, which are struggling to make a profit, would be selected by the end of July.
The process has been delayed by complex negotiations because it also involves Glencore, to which Mopani owes money, the source said. Glencore has previously said it will not comment on the sales process as it has exited the assets.
ZCCM Investment Holdings (IH), a unit of the Zambian government, is being advised by Rothschild & Co on the Mopani sale.
It has presented investment proposals to the government that include platinum miner Sibanye-Stillwater, an investor from the United Arab Emirates (UAE) with links to International Holding Company, and China’s Zijin Mining Group, the source said.
The process is nearing completion, with ZCCM-IH and the government expected to finally make the selection in October.
ZCCM-IH took control of Mopani from Glencore after agreeing to pay the Swiss commodities giant $1.5bn in a deal funded by debt.
Zambian President Hakainde Hichilema wants new investors in Africa’s second-largest copper producer and aims to triple output of the metal. Copper is key to the clean energy transition and battery electric vehicles.
ZCCM-IH, when approached for comment on the timeline for a sale, referred to a September 29 speech by finance minister Situmbeko Musokotwane, in which he said the selection of an investor for Mopani was “imminent”.
Among the investors that ZCCM-IH has been evaluating, Sibanye stands out because of its experience reviving some of SA’s struggling gold and platinum mines, the source said. Sibanye is now fine-tuning its financing plans for Mopani, the source added.
Sibanye CEO Neal Froneman said the sale process is ongoing. “I sense that they now do want to bring it to a close quite quickly,” Froneman said in an interview.
The UAE investor has a strong financial position but limited mining experience, the source added. International Holding Company did not immediately respond to requests for comments.
Zijin offers a good blend of financial strength and mining expertise, but the global macroeconomic environment and uncertainty in commodities could be limiting its interest in Mopani, the source added.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Zambia tipped to make a decision on Mopani this month
Sibanye is in the running and has experience in turning around old and struggling operations
The Zambian government is expected to make a final decision on the sale of Mopani Copper Mines in October, securing a new investor for the assets it bought from Glencore in 2021, a source with knowledge of the matter said.
Zambian mines minister Paul Kabuswe initially said a new investor for the copper mines, which are struggling to make a profit, would be selected by the end of July.
The process has been delayed by complex negotiations because it also involves Glencore, to which Mopani owes money, the source said. Glencore has previously said it will not comment on the sales process as it has exited the assets.
ZCCM Investment Holdings (IH), a unit of the Zambian government, is being advised by Rothschild & Co on the Mopani sale.
It has presented investment proposals to the government that include platinum miner Sibanye-Stillwater, an investor from the United Arab Emirates (UAE) with links to International Holding Company, and China’s Zijin Mining Group, the source said.
The process is nearing completion, with ZCCM-IH and the government expected to finally make the selection in October.
ZCCM-IH took control of Mopani from Glencore after agreeing to pay the Swiss commodities giant $1.5bn in a deal funded by debt.
Zambian President Hakainde Hichilema wants new investors in Africa’s second-largest copper producer and aims to triple output of the metal. Copper is key to the clean energy transition and battery electric vehicles.
ZCCM-IH, when approached for comment on the timeline for a sale, referred to a September 29 speech by finance minister Situmbeko Musokotwane, in which he said the selection of an investor for Mopani was “imminent”.
Among the investors that ZCCM-IH has been evaluating, Sibanye stands out because of its experience reviving some of SA’s struggling gold and platinum mines, the source said. Sibanye is now fine-tuning its financing plans for Mopani, the source added.
Sibanye CEO Neal Froneman said the sale process is ongoing. “I sense that they now do want to bring it to a close quite quickly,” Froneman said in an interview.
The UAE investor has a strong financial position but limited mining experience, the source added. International Holding Company did not immediately respond to requests for comments.
Zijin offers a good blend of financial strength and mining expertise, but the global macroeconomic environment and uncertainty in commodities could be limiting its interest in Mopani, the source added.
Reuters
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