Zambia's ZCCM-IH seeks to take control of Glencore's Mopani Copper Mines
Zambia’s mining investment arm ZCCM-IH is seeking a controlling stake in Glencore subsidiary Mopani Copper Mines, Zambia’s mines minister said on Tuesday, after a disagreement over Glencore’s plan to halt production.
ZCCM-IH currently holds a 10% stake in Mopani Copper Mines.
Glencore is the majority owner with 73.1% and First Quantum Minerals owns
16.9%.
A 10% stake was “not sufficient” to determine Mopani’s
future, Mines Minister Richard Musukwa said in a statement, and ZCCM-IH was
therefore seeking a larger stake “with a view to holding a controlling stake in
Mopani”.
The mines minister told Reuters ZCCM-IH was seeking a 51%
shareholding “or even more”.
Musukwa said the government has a team liaising with ZCCM-IH
for the negotiations with Glencore, and ZCCM-IH is engaging a transaction
adviser.
Glencore said in a statement discussions with ZCCM-IH “and
other shareholders” were progressing and further updates would be issued as
appropriate.
Asked about ZCCM-IH seeking a controlling stake in Mopani, a
Glencore spokesman declined to comment.
A majority stake would require Glencore selling more than
41% of the company to ZCCM-IH.
Glencore’s announcement in April that it planned to suspend
operations at Mopani, citing low copper prices and COVID-19 disruptions,
sparked a backlash from Zambia’s government, which said Mopani had not given
enough notice and threatened to revoke the company’s mining licences.
In May, Mopani said it would resume mining operations for 90
days but still expected to go into care and maintenance - a term for a
temporary production halt during which a mine site is maintained ahead of an
eventual restart.
On July 16 the company said it would appeal the mines
ministry’s decision to reject its proposal to suspend the operations.
The government is working closely with labour unions and
suppliers to ensure operations continue to run smoothly during the negotiations,
Musukwa said.
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