DELTA Mining Buys Out Glencore’s 51% Mopani Shares

By Kalata News,

Lusaka 05/01/24 – DELTA Mining Ltd, is expected to buy out Glencore’s 51 per cent shares in Zambia’s Mopani Mining Company (MCM).

Delta Mining is a subsidiary of International Resources Holding RSC Limited (IRH) of Dubai.

Making the cautionary announcement to its investors and partners, ZCCM Investments Holdings Plc (ZCCM-IH) issued on 10 November 2023 and 30 November 2023, ZCCM IH said IRH had been selected as the preferred Strategic Equity Partner (SEP) for Mopani Copper Mines Plc (MCM)/(Mopani) subject to the fulfilment of Conditions set and upon the satisfaction of those Conditions set in relationship to Glencore International AG (Glencore).

ZCCM IH said “the Board is pleased to announce that on 22 December 2023, ZCCM-IH entered into an agreement with IRH pursuant to which IRH has committed to invest a total of US$1.1 billion into MCM as a Strategic Equity Partner and that MCM will be restructured.”

According to the announcement, IRH is to invest a total of US$1.1 billion into MCM to fund MCM’s Project Development Plan (PDP), provide working capital and restructure certain existing Glencore liabilities as set out below:

• US$620 million will be provided in the form of new equity capital in return for a 51% stake in MCM, which will be used for MCM’s capital projects, and to stabilise the working capital position of the business;
• Approximately US$400 million will be provided as a Shareholder Loan to MCM by way of novation of the Glencore debt, that will be used as part of the consideration to settle the original Glencore Transaction Debt of US$1.5 billion plus interest and the Glencore Super Senior procured letters of credit;
• Further capital may be made available to MCM as shareholder loans, if required, based on the future working capital requirements of the business.

ZCCM-IH will retain its 49% equity stake in MCM.

Said ZCCM-IH, “the executive management of MCM will be retained and will be supplemented by industry experts from IRH with the relevant skills and expertise to complete MCM’s capital projects and turnaround its operational performance; A new Board of Directors, reflective of the revised shareholding structure, will be constituted; and IRH will, subject to certain conditions precedent being met, provide up to US$220 million in interim funding. This funding will be available to MCM prior to the Closing, to ensure that the business has sufficient liquidity until Closing. The interim funding will form part of the US$620 million new equity investment.”

Mopani is one of the most important copper mining operations in Zambia, with a long history that is synonymous with the growth and development of the Copperbelt.  Mopani operates Mines mainly in Mufulira and Kitwe and controls the economic performances of these two towns.

ZCCM-IH took full control of MCM from Glencore in 2021, with a plan to find a suitable SEP to contribute to the expansion of the business and provide the necessary capital for growth.