MOPANI DEAL FAIR

THERE have been misleading statements from some quarters about the Mopani Copper Mine deal, in which ZCCM-IH increased its stake to 100 percent.

Some people have erroneously been referring to the sale agreement between ZCCM-IH and Glencore International as nationalisation.

Citizens and politicians in particular ought to debate this matter truthfully and give credit where it is due.

There is absolutely no need for any one quarter to start punching holes in the deal, thereby sending negative sentiments in the economy.

In fact, Mines and Minerals Development Permanent Secretary, Barnaby Mulenga, has explained the whole scenario in detail, giving the background and bringing out important points and the reason why Government, through ZCCM-IH, opted to increase the stake in the mining firm.

Firstly, Glencore International and ZCCMIH sealed a $1.5 billion deal to increase the Zambian shareholding to 100 percent from 10 percent.

This means that the commodity trader and FQM jointly let off the 90 percent and agreed that ZCCM-IH pays $1 while $1.5 billion will be settled in the period spanning 10 to 17 years.

ZCCM-IH will be servicing the payment through mineral sales in an off-take arrangement with Glencore. Of the total sales, 10 percent will be going towards debt servicing.

This, therefore, means that the $1.5bn debt (sale agreement) has no bearing on the $11.3bn external public debt as erroneously believed in some quarters. It is purely a business deal between ZCCM-IH and Glencore.

The other point worth digesting is the fact that Mopani still has $18bn worth of mineral reserves.

Last year, copper output hit 34, 000 tonnes and Mopani (under Glencore at the time) had envisaged to ramp up production to 150, 000 tonnes per annum after the completion of the $1.2bn mine upgrade.

About $300m is needed to complete the upgrade.

Glencore was running Mopani at a loss and resolved to place the Mufulira and Kitwe assets on care and maintenance on April 7, last year. The reasons given were that copper prices were low and that restrictions occasioned by the outbreak of Covid-19 stifled business.

The real reason could have been that Glencore procurement process was stained as in most cases production costs were inflated.

Those opposing the action to increase the stake in the mining firm should give an alternative business model. This is the challenge!

Government acted in good faith as there are still about 200 million tonnes of ore which could be processed into copper, cobalt and gold.

As indicated by Mr Mulenga, Government has an option of getting a strategic partner and pay off the $1.5bn debt, thereby ending the off-take arrangement at once.

There ought to be patriotism in the manner this matter is debated.

There is no nationalisation, but Government moved quickly to safeguard the interest of the country.

PURSUING JUSTICE AND EQUITY WITH INTERGRITY