Glencore to sell copper mine to Zambian state

ZURICH - Swiss-based mining giant Glencore said Tuesday it was selling its stake in a highprofile Zambian copper mine to a state-owned Zambian concern. In a statement capping a months-long political wrangle, Glencore said its subsidiary Carlisa Investments Corp. was selling its 90% stake in Mopani Copper Mines Plc to ZCCM Investments Holding, which is controlled by the Zambian government.

ZCCM, which owns the remaining 10%, is buying Mopani for a nominal US$1 and assuming borrowings of US$1.5 billion. The transaction is expected to go ahead within the next three months, subject to the approval of regulatory authorities in Zambia and ZCCM’s shareholders, Glencore said.

The borrowings, called a transaction debt, will be owed to Glencore and will be repaid from Mopani revenue. Glencore will retain rights over production from the mine until the loan is reimbursed. Mopani became a hot political issue last year when Glencore announced that it would slash production after copper prices, which were already soft, were further hit by the coronavirus pandemic.

In early April, the giant mothballed two sites, triggering the anger of the Zambian government and trade unions, who feared job losses. Production resumed temporarily the following month, but Glencore then said it would close them permanently under a savings programme in the light of the continuing coronavirus emergency.

On 17 December Zambian President Edgar Lungu said the country would take “a significant stake in some selected mine assets,” the goal being to “create sufficient wealth for the nation.” He hit out at “mining investors who cry foul” whenever Zambia sought to increase its share of its natural wealth.