Share Prices & Company Research

Market News

19 Jan 2021 | 08:54

Glencore seals $1.5bn deal to offload Mopani Copper Mines

(Sharecast News) - Glencore has agreed to sell Mopani Copper Mines to the Zambian government in a $1.5bn deal, it was announced on Tuesday. The blue chip miner and commodity trader, which is listed in London and headquartered in Switzerland, said that its subsidiary, Carlisa Investments, has struck the deal with ZCCM Investments, which already has a 10% interest in Mopani. ZCCM is the Zambian government's mining investment fund.

The sale price is $1, but the deal includes transaction debt of $1.5bn, which will remain owed by Mopani to Glencore group creditors following completion.

Glencore, which holds 81.2% of the shares in Carlisa, said that the deal was being funded by borrowings from Carlisa "and other members of the Glencore group".

Mopani produced 51,275 tonnes of copper in 2019, compared to 119,000t in 2018. According to Reuters, that accounted for 13.9% of Glencore's African copper output and 3.7% of its overall copper output.

Until the transaction debt is repaid in full, Glencore will retain offtake rights of Mopani's copper production.

In a note published last week, addressing speculation that a deal was imminent, SP Angel said: "Glencore has used Mopani as a swing producer, cutting production and laying off thousands of staff whenever copper prices saw a sustained low.

"While the mines are high cost, the Zambia government is quite understandably upset at having to look after staff who are hired and laid off in this way. The production cuts also reduced royalty tax payments to Zambia."

Last April, Glencore's plans to put Mopani on care and maintenance - prompted by falling copper prices and the Covid-19 pandemic - saw the Zambian government threaten to revoke the firm's licence.

As at 0845 GMT, shares in Glencore were ahead nearly 2% at 280.95p.
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 30th April 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.