ZCCM-Investment Holdings (ZCCM-IH), a company listed on the AIM exchange, has announced a significant development regarding its ownership of Mopani Copper Mines (MCM). ZCCM-IH has entered into an agreement with International Resources Holding (IRH) and its subsidiary, Delta Mining, in which IRH will acquire a 51% interest in Mopani Copper Mines for an impressive $1.1 billion. This substantial investment is set to reshape the landscape of copper mining in the region and represents a strategic move for both companies.
The agreement encompasses several components, including a $620 million injection of new equity capital, an allocation of up to $100 million for settling existing third-party letters of credit, and an additional provision for up to $380 million of shareholder loans into MCM. These funds will be instrumental in boosting MCM’s growth and operational capabilities as a strategic equity partner (SEP). However, the disbursement of these funds is subject to certain conditions.
This partnership between ZCCM-IH and IRH will lead to a significant restructuring of the relationship between Glencore International and Mopani Copper Mines. ZCCM-IH took full control of MCM from Glencore in 2021, with a clear vision of finding a suitable SEP to foster expansion and provide the necessary capital for growth.
IRH’s overarching strategy is centered on investing in critical minerals across the entire mining value chain, particularly in the region. By partnering with ZCCM-IH and MCM, IRH aims to play a pivotal role in the revitalization of the Zambian economy and mining industry. This partnership is expected to drive the long-term sustainability of MCM, with a focus on creating jobs, boosting economic development, and securing the necessary funding and technical expertise to realize MCM’s project development plan. The ultimate goal is for MCM to become a formidable producer of copper cathodes, targeting an annual production capacity of 200,000 tons within the next three years.
In addition to these immediate objectives, ZCCM-IH and IRH plan to collaborate with MCM and the Zambian government to explore other opportunities within the Zambian mining industry. These opportunities are anticipated to attract further investment into the region, bolstering the overall mining sector.
To ensure transparency and provide shareholders with comprehensive information about this transformative transaction, ZCCM-IH is working closely with its transaction advisers to prepare a transaction circular. This circular will contain all the relevant details related to the transaction, including financial and technical information. Shareholders will have the opportunity to vote on this significant development at an extraordinary general meeting scheduled for the first quarter of this year. This marks a pivotal moment for Mopani Copper Mines, ZCCM-IH, IRH, and the Zambian mining industry as a whole, signaling a new era of growth and prosperity.
