Zambia has agreed to restructure a $1.5 billion debt owed by Mopani Copper Mines to Glencore, according to a statement from ZCCM-Investment Holdings.
Zambia appointed International Resources Holdings (IRH) from the United Arab Emirates (UAE) as Mopani’s new strategic equity investor in November, which acquired a 51% stake in exchange for a $1.1 billion capital injection.
IRH’s ownership in Mopani will be through its wholly-owned subsidiary, Delta Mining Ltd.
Debt Clearance Plan
IRH, a subsidiary of International Holdings Company (IHC) in Abu Dhabi, will extend a $400 million shareholder loan to help settle Mopani’s debt.
The restructuring will replace Mopani’s gross debt to Glencore with the shareholder loan owed to Delta, amounting to up to $400 million, resulting in an overall reduction of Mopani’s debt by over $1.2 billion.
Mopani and Glencore have also agreed on a royalty agreement where Glencore will receive a portion of Mopani’s profits if the copper price surpasses $12,000 per ton.
Future Production Targets
The investment from IRH will support Mopani’s goal of increasing its copper output to 200,000 tons annually within the next three years, as per ZCCM-IH.
In 2022, the miner produced 72,694 metric tons of copper, a decline from 87,618 metric tons in 2021.