Mopani targets global investors after Glencore deal
Mopani Copper Mines is targeting international investors following ZCCM Investment Holding (ZCCM-IH)’s takeover of Glencore’s majority stake in a $1.5 billion debt deal.
The Lusaka Times reports ZCCM-IH – which is acquiring 90 percent of Mopani from Glencore subsidiary Carlisa Investment Corp – needs approximately $300 million to complete expansion projects started by Glencore.
Completion of the sale, which is conditional on certain regulatory approvals in Zambia and on approval of ZCCM-IH shareholders and board of directors, is expected to occur within three months.
After completion, Glencore will retain offtake rights in respect of Mopani's copper production “until the Transaction Debt has been repaid in full,” according to a statement.
Glencore tried to suspend operations at Mopani due to low copper prices and COVID-19 disruptions, prompting threats from the Zambian government that it could revoke the company’s mining licenses.
Zambia, which will hold Presidential elections in August, has built up large debts following a borrowing spree in recent years. It defaulted on a US$42.5 million payment on a Eurobond last November.
Zambia paid 8.5 billion kwacha ($400 million) in VAT refunds to mining companies last year but still owes them $1.6 billion, according to Zambia’s Chamber of Mines President Goodwell Mateyo.
Separately, Vedanta Resources has agreed to settle all claims brought against it by Zambian villagers following pollution by a copper mine run by Konkola Copper Mines Plc (KCM), Vedanta and law firm Leigh Day said on Tuesday, according to Reuters.
The claim, centring on pollution from the Nchanga Copper Mine, was brought by more than 2,500 Zambian villagers against KCM – Zambia’s biggest private employer – and its UK-based parent company Vedanta Resources, the report added.
Gerald Group resolves iron ore dispute with Sierra Leone
Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.
Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence.
As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.
Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.
Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.
Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."
Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.
"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.
Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is set to deliver six million tonnes of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.
"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”