Zambia has chosen a unit of the United Arab Emirates’ International Holding Company (IHC) as the new strategic partner for its Mopani Copper Mines, according to a statement by the state-owned ZCCM-IH on Thursday.
The deal, which is yet to be finalized, will see International Resources Holdings (IRH) inject funds into Mopani to help with working capital, mine development, and debt restructuring. IRH is also expected to “reset” Mopani’s existing relationship with Glencore, the Swiss commodities giant that sold its majority stake in the copper miner to ZCCM-IH in 2021.
Zambia, Africa’s second-largest copper producer, has been seeking a new investor for Mopani since it took over the assets from Glencore for $1.5 billion. The acquisition was part of the government’s efforts to boost its control over the mining sector, which accounts for over 70% of its export earnings.
Mopani, which operates two underground mines, a concentrator, a smelter, and a refinery, has the potential to increase its annual copper output to over 140,000 tonnes from the current 34,000 tonnes, according to ZCCM-IH. The company said it had received 11 bids from local and international firms interested in partnering with it to run Mopani.
IRH, which is linked to IHC, one of the most valuable listed companies in the UAE, said the proposed investment in Mopani was its largest to date and a key step in its strategy to become a major player in the African minerals sector. IRH has been expanding its portfolio of critical metals and developing a new entity that encompasses the entire metals and mining supply chain.
The partnership with IRH is seen as a positive development for Zambia’s mining industry, which has faced challenges such as power shortages, tax disputes, and low copper prices in recent years. The industry is also recovering from the impact of the Covid-19 pandemic, which disrupted operations and demand.
Zambia’s Mines Minister Paul Kabuswe said the details of the deal, including the level of equity participation and the investment amount, would be announced once the negotiations are completed. He expressed confidence that the deal would create jobs, increase revenue, and enhance the country’s mining reputation.
Zambia has set a target to raise its copper production from 800,000 tonnes per year to three million tonnes per year in the next three years, as it seeks to diversify its economy and reduce its debt burden. The country has also introduced various incentives to attract investors, such as reducing the royalty rate for mines and easing the environmental licensing process.
Source: Reuters
