Zambia to restructure $1.5bn Glencore debt with new Mopani investor
Last November, Zambia picked the UAE’s International Resources Holdings as the new strategic equity investor in Mopani
02 February 2024 - 12:00
byChris Mfula
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Lusaka — Zambia has agreed to restructure a $1.5bn debt owed by Mopani Copper Mines to Glencore, which arose from its acquisition of Mopani in 2021, state-owned mining firm ZCCM-Investment Holdings (ZCCM-IH) said on Friday.
Last November, Zambia picked the United Arab Emirates’ International Resources Holdings (IRH) as the new strategic equity investor in Mopani, to take up a 51% stake in return for a $1.1bn capital injection. IRH’s interest in Mopani will be held through its wholly owned subsidiary, Delta Mining.
As part of the deal, IRH, a unit of Abu Dhabi’s most valuable listed company, International Holdings Company (IHC), will provide $400m as a shareholder loan towards clearing Mopani’s debt. Of that, $300m is earmarked for the Glencore debt and the remaining $100m will be used to settle third-party letters of credit secured by Glencore for Mopani.
“The effect of this is that the gross debt owed by Mopani to Glencore ... will be replaced by the above shareholder loan owed to Delta of up to $400m, resulting in an overall net reduction in Mopani debt of over $1.2bn,” ZCCM-IH said.
Glencore was not immediately available to comment.
Mopani and Glencore also agreed on a royalty agreement which will see the global commodities giant receiving an unspecified share of Mopani’s profit in the event that the copper price exceeds $12,000 per ton.
ZCCM-IH said “the relationship between Glencore and Mopani will be restructured” following the agreed settlements and “there shall be no indebtedness between Glencore and Mopani”.
IRH’s investment will provide funding to support Mopani’s target to raise its output to 200,000 tonnes of copper annually in the next three years, ZCCM-IH said.
The miner produced 72,694 metric tons of copper in 2022, down from 87,618 metric tons in 2021.
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 to restructure $1.5bn Glencore debt with new Mopani investor
Last November, Zambia picked the UAE’s International Resources Holdings as the new strategic equity investor in Mopani
Lusaka — Zambia has agreed to restructure a $1.5bn debt owed by Mopani Copper Mines to Glencore, which arose from its acquisition of Mopani in 2021, state-owned mining firm ZCCM-Investment Holdings (ZCCM-IH) said on Friday.
Last November, Zambia picked the United Arab Emirates’ International Resources Holdings (IRH) as the new strategic equity investor in Mopani, to take up a 51% stake in return for a $1.1bn capital injection. IRH’s interest in Mopani will be held through its wholly owned subsidiary, Delta Mining.
As part of the deal, IRH, a unit of Abu Dhabi’s most valuable listed company, International Holdings Company (IHC), will provide $400m as a shareholder loan towards clearing Mopani’s debt. Of that, $300m is earmarked for the Glencore debt and the remaining $100m will be used to settle third-party letters of credit secured by Glencore for Mopani.
“The effect of this is that the gross debt owed by Mopani to Glencore ... will be replaced by the above shareholder loan owed to Delta of up to $400m, resulting in an overall net reduction in Mopani debt of over $1.2bn,” ZCCM-IH said.
Glencore was not immediately available to comment.
Mopani and Glencore also agreed on a royalty agreement which will see the global commodities giant receiving an unspecified share of Mopani’s profit in the event that the copper price exceeds $12,000 per ton.
ZCCM-IH said “the relationship between Glencore and Mopani will be restructured” following the agreed settlements and “there shall be no indebtedness between Glencore and Mopani”.
IRH’s investment will provide funding to support Mopani’s target to raise its output to 200,000 tonnes of copper annually in the next three years, ZCCM-IH said.
The miner produced 72,694 metric tons of copper in 2022, down from 87,618 metric tons in 2021.
Reuters
Sibanye’s pursuit of Mopani undone by Abu Dhabi bidder
Less is more for Glencore
Zambian president promises to cut deficit, review mining policies
Zambia shoots itself in the foot as hard-nosed Glencore cuts and runs
Glencore ends copper mining in Zambia with sale of stake in Mopani
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