Commodities trader and miner Glencore has announced that its subsidiary Carlisla Investments has signed an agreement with Zambian’s mining investment arm ZCCM to transfer its 90% interest in Mopani Copper Mines in a deal worth $1.5bn.
ZCCM already holds the remaining 10% stake in Mopani, and is acquiring the outstanding interest from Carlisla for $1 plus the transaction debt of $1.5bn, which will remain owed by Mopani to Carlisla and other Glencore group creditors following the completion of the deal.
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The deal is expected to close within the next three months, conditional on the receipt of regulatory approvals in Zambia and on the approval of ZCCM’s shareholders and board of directors.
After the sale is closed, Glencore will retain offtake rights of Mopani’s copper production until the transaction debt is repaid in full.
The deal should bring an end to tensions between Glencore and the Zambian Government over Mopani’s operations. In April 2020, Zambia threatened to revoke Mopani Copper Mines’ mining licenses after mines were placed on care and maintenance in light of the Covid-19 pandemic and falling copper prices. Zambian authorities alleged that Mopani had not given sufficient notice to the government before suspending its operations.
It was subsequently agreed that operations would resume for a 90-day period and in July, Zambia’s Mining Minister Richard Musukwa rejected Mopani’s proposal for another suspension.
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By GlobalDataReports emerged in August that Glencore was looking to offload its Mopani assets in part due to its repeated confrontations with the Government of Zambia.
Mopani Copper Mines operates underground mines, a concentrator, a smelter, and a refiner at its Mufulira mine site, as well as open pit mines, a concentrator, and a cobalt plant at its Nkana mine site. In 2018, Mopani Copper Mines produced a total of 59,302 tonnes of copper from Mopani sources and a further 60,188 tonnes from third-party concentrates.
