Glencore is in discussions to sell a majority stake in the Kamoto Copper Company (KCC) in the Democratic Republic of Congo (DRC), according to Bloomberg.
The move indicates a significant shift in the company’s strategy, with KCC previously viewed as a key asset.
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KCC operates a major copper and cobalt project in the DRC but has faced operational challenges and a dispute with the Congolese Government over royalties.
In addition, the mine’s performance has been affected by a slump in cobalt prices.
With control of KCC, Glencore is one of the few Western companies with major stakes in the DRC’s cobalt industry, which is predominantly managed by Chinese operators and Kazakhstan’s Eurasian Resources Group.
Glencore confirmed it had previously declined an unsolicited offer from Orion Resource Partners to acquire the mine through a joint venture with Abu Dhabi’s ADQ.
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By GlobalDataHowever, more recently, Glencore has engaged in discussions with potential buyers, including Orion.
The talks are part of broader negotiations concerning a US-DRC minerals and infrastructure partnership, said the news agency.
While no formal sales process has been initiated, Glencore has indicated to companies such as Rio Tinto that it is open to selling a stake.
The KCC mine is jointly owned by Glencore, which holds a 70% stake, alongside state-owned Gecamines and the Congolese Government.
Western investors have shown hesitance in committing capital to the DRC, largely due to apprehensions surrounding the complexities of engaging with individuals who are subject to sanctions. Israeli billionaire Dan Gertler receives a 2.5% royalty on revenues from KCC, posing potential complications due to his sanctions by the US.
According to Reuters’ report, the US International Development Finance Corporation is exploring investment opportunities in the DRC’s mining sector with Orion.
This news comes amid US efforts to secure critical mineral supplies in competition with China.
Discussions continue around Gertler’s potential sale of his royalties, which could resolve some of the complexities surrounding the ownership and operation of KCC.
