Zambia to restructure US$1,5bln Glencore debt

ZAMBIA has agreed to restructure a US$1,5 billion debt owed by Mopani Copper Mines to Glencore, which arose from its acquisition of Mopani in 2021, state-owned mining firm ZCCM-Investment Holdings has said.

Last November, Zambia picked the United Arab Emirates’ International Resources Holdings (IRH) as the new strategic equity investor in Mopani, to take up a 51 percent stake in return for a US$1,1 billion capital injection.

IRH’s interest in Mopani will be held through its wholly-owned subsidiary, Delta Mining.

As part of the deal, IRH, a unit of Abu Dhabi’s most valuable listed company, International Holdings Company (IHC), will provide US$400 million as a shareholder loan towards clearing Mopani’s debt. Of that, US$300 million is earmarked for the Glencore debt and the remaining US$100 million will be used to settle third-party letters of credit secured by Glencore for Mopani.

“The effect of this is that the gross debt owed by Mopani to Glencore … will be replaced by the above shareholder loan owed to Delta of up to US$400 million, resulting in an overall net reduction in Mopani debt of over US$1,2 billion,” ZCCM-IH said.

Glencore was not immediately available to comment.

Mopani and Glencore also agreed on a royalty agreement that will see the global commodities giant receiving an unspecified share of Mopani’s profit in the event that the copper price exceeds US$12 000 per tonnes.

ZCCM-IH said “the relationship between Glencore and Mopani will be restructured” following the agreed settlements and “there shall be no indebtedness between Glencore and Mopani”.

IRH’s investment will provide funding to support Mopani’s target to raise its output to 200 000 tons of copper annually in the next three years, ZCCM-IH said.