Zambia and New UAE Investor to Restructure $1.5 Billion Glencore Debt for Mopani Copper Mines
Zambia has reached an agreement to restructure the $1.5 billion debt linked to Mopani Copper Mines, initially incurred through the acquisition of the mine from Glencore in 2021. This development comes as ZCCM-Investment Holdings (ZCCM-IH), Zambia's state-owned mining entity, selected the United Arab Emirates' International Resources Holdings (IRH) as Mopani's strategic equity investor last November.
IRH, through its subsidiary Delta Mining Ltd, will inject $1.1 billion into Mopani, acquiring a 51% stake in the process. A portion of this investment, $400 million, will be allocated as a shareholder loan to address Mopani's outstanding debts, including $300 million towards the Glencore debt and $100 million for settling third-party letters of credit previously secured by Glencore.
This financial maneuver is poised to significantly reduce Mopani's debt burden to Glencore by over $1.2 billion, marking a pivotal step in the mine's financial restructuring. Further details of the agreement include a royalty arrangement with Glencore, entitling the commodity trading and mining company to a share of Mopani's profits should copper prices surpass $12,000 per ton.
The conclusion of this deal signifies the end of Glencore's financial claims over Mopani, transitioning the relationship between the two entities and eliminating any indebtedness. IRH's substantial investment is expected to bolster Mopani's copper production capabilities, with an aim to increase annual output to 200,000 tons within the next three years, a significant leap from the 72,694 metric tons recorded in 2022.
