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The Government of Zambia has agreed to restructure a USD 1.5 billion debt owed by Mopani Copper Mines to Swiss mining company Glencore with the help of a new investor, UAE-based International Resources Holdings (IRH), ZCCM-Investment Holdings.
The acquisition of Mopani Copper Mines by state-owned mining company ZCCM-Investment Holdings (ZCCM-IH) in 2021, has left the state indebted to Swiss-based Glencore, which previously held a 90% stake in Mopani. In November -2023, Zambia selected IRH as the new strategic investor in Mopani, which will receive a 51% stake in exchange for a capital injection of USD 1.1 billion. IRH’s stake in Mopani will be held through its subsidiary Delta Mining.
The gross debt owed by Mopani to Glencore consisting of USD 1.5 billion plus accrued interest that was put in place when ZCCM-IH took control of Mopani, and a further USD 100 million of third-party letters of credit underwritten by Glencore, will be replaced by the above shareholder loan owed to Delta of up to USD 400 million, resulting in an overall net reduction in Mopani debt of over USD 1.2 billion, stated ZCCM-IH. The parties have also agreed to a royalty agreement under which Glencore will receive an unspecified share of Mopani’s profits if the copper price exceeds USD12,000 per ton, the company added.
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The Swiss company had written down Mopani’s debt to USD 596 million in 2022 as the copper miner failed to meet production targets, partly due to a lack of financing, stated a Glencore representative. Mopani produced 72,694 metric tons of copper in 2022, down from 87,618 metric tons in 2021.
