Zambia to restructure $1.5bn Glencore debt with new Mopani investor
TLDR
- Zambia has restructured the $1.5 billion debt of Mopani Copper Mines owed to Glencore.
- International Resources Holdings (IRH) from the UAE will be the new strategic equity investor in Mopani, with a 51% stake.
- IRH, a subsidiary of Abu Dhabi's International Holdings Company, will provide a $400 million shareholder loan to address Mopani's debt, with $300 million allocated for settling Glencore's debt.
Zambia has reached an agreement to restructure the $1.5 billion debt owed by Mopani Copper Mines to Glencore, stemming from Glencore's acquisition of Mopani in 2021, as confirmed by state-owned mining firm ZCCM-Investment Holdings.
In November, Zambia selected International Resources Holdings (IRH) from the United Arab Emirates as the new strategic equity investor in Mopani, securing a 51% stake in exchange for a $1.1 billion capital injection. IRH's participation in Mopani will be facilitated through its wholly-owned subsidiary, Delta Mining Ltd.
As part of this comprehensive deal, IRH, a subsidiary of Abu Dhabi's International Holdings Company (IHC), will contribute $400 million as a shareholder loan to address Mopani's debt. Of this amount, $300 million is allocated for settling the Glencore debt, while the remaining $100 million will be utilized to clear third-party letters of credit secured by Glencore for Mopani.
Key Takeaways
Zambia possesses one of the world’s highest-grade deposits of copper and is ranked the seventh-largest copper producer in the world. In addition, Zambia is home to small, exploitable deposits of cobalt, nickel, and manganese. Copper contributes over 70 percent of the country’s foreign export earnings. Zambia produces about 20 percent of the world’s emeralds. As such, the South African country boasts the presence of some of the largest mining operators in the world. On the fresh deal, Mopani and Glencore also agreed on a royalty agreement which will see the global commodities giant receiving an unspecified share of Mopani’s profit in the event that the copper price exceeds $12,000 per ton.
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