Zambia Pursues $1.5 Billion Debt Restructuring with Glencore for Mopani Copper Mines
Zambia is actively engaged in restructuring the $1.5 billion debt owed by Mopani Copper Mines to Glencore, a debt arising from Glencore’s acquisition of Mopani in 2021, as revealed by ZCCM-Investment Holdings (ZCCM-IH) on Friday.
Although ongoing discussions have been confirmed by a Glencore spokesperson, it was emphasized that no final agreement had been reached. Glencore had previously written down the Mopani debt to $596 million in 2022, reflecting the copper miner’s challenges in meeting production targets due to insufficient funding.
In November, Zambia selected International Resources Holdings (IRH) from the United Arab Emirates as the new strategic equity investor in Mopani, acquiring a 51% stake with a $1.1 billion capital injection.
Under this agreement, IRH is set to provide a $400 million shareholder loan to clear Mopani’s debt, including $300 million for the Glencore debt and $100 million for third-party letters of credit secured by Glencore.
The debt restructuring will replace the gross debt owed by Mopani to Glencore with the shareholder loan owed to Delta, IRH’s subsidiary, resulting in a net reduction in Mopani’s debt of over $1.2 billion.
An additional royalty agreement has been established, entitling Glencore to an unspecified share of Mopani’s profit if the copper price exceeds $12,000 per ton.
The primary objective of this restructuring is to transform the relationship between Glencore and Mopani, eliminating the indebtedness between the two entities.
IRH’s significant investment is anticipated to support Mopani’s goal of increasing copper output to 200,000 tons annually over the next three years, aligning with the company’s ambition amidst recent production challenges.
Source: Copperbelt Katanga Mining
