Glencore buys stakes in Mutanda and Katanga for $960m


Glencore has purchased the remaining 31% stake of Fleurette Group's Mutanda Mining Sarl and also gained a 10.25% interest in Katanga Mining for a total consideration of $960m. 

Both mines are located in the Democratic Republic of Congo.

Glencore hired BMO Capital Markets to determine the appropriate consideration for the Mutanda Shares and the Katanga Shares to complete the transaction.

Glencore paid $922m for Mutanda shares and $38m for Katanga shares.

Glencore will off-set against the cash consideration payable to Fleurette, loans owing to the Glencore group by Fleurette and its affiliates, and secured over the Mutanda Shares, amounting to $556m with $120m of this being accrued interest.

In addition, Glencore has acquired shareholder loans owed to the Fleurette group by Mutanda Mining Sarl that amounts to $130m.

"According to data from December 2016, the production rate at Mutanda was more than 200,000tpa."

The adjusted cash consideration payable by Glencore for these transactions is $534m.

Furthermore, Glencore has bought additional 15,325,000 shares in Katanga Mining that forms nearly 0.8% stake. This additional stake is held as a security for the loan provided to Fleurette group member Ruwenzori, which acquired 25 million shares in Nikanor. Nikanor later merged with Katanga and shares were exchanged for shares in Katanga.

With this acquisition, Glencore now owns 100% interest in Mutanda and approximately 86.33% interest in Katanga.

Mutanda produces high-grade copper and cobalt in its operations situated in the province of Lualaba.

According to data from December 2016, the production rate at Mutanda was more than 200,000tpa.

Katanga operates a major mine complex that produces refined copper and cobalt.


Image: An employee at Katanga copper mine. Photo: courtesy of Glencore.