ZCCM-IH Secures US$1.1 billion Strategic Partnership with IRH for Mopani Copper Mines Plc
ZCCM Investments Holdings Plc (ZCCM-IH) has sealed a significant pact with International Resources Holding RSC Limited (IRH) for a strategic collaboration involving Mopani Copper Mines Plc (MCM).
The agreement, involving a total investment commitment of US$1.1 billion by IRH, marks a transformative phase in the relationship between Glencore International AG (Glencore) and MCM, subject to specific conditions.
Key Highlights:
1.Investment Structure:
.IRH pledges US$620 million as new equity, securing a controlling 51% stake in MCM. These funds will propel MCM’s capital projects and enhance its working capital.
.An additional approximately US$400 million will be channeled as a Shareholder Loan through the novation of Glencore debt, contributing to settling previous debts and associated letters of credit.
.Flexibility for further capital infusion through shareholder loans will be available to meet future operational needs.
2.Operational Reinforcement:
.ZCCM-IH retains a 49% equity stake in MCM upon Closing.
.Existing MCM executive management will be augmented by industry experts from IRH to bolster operational efficiency and oversee capital projects.
.Formation of a revised Board of Directors reflecting the altered shareholding structure.
3.Interim Funding and Timeline:
.IRH plans to extend up to US$220 million as interim funding pre-Closing to fortify MCM’s liquidity, forming part of the US$620 million new equity investment.
.Anticipated Closing of the Transaction in the first quarter of 2024, subject to fulfilling Conditions Precedent.
4.Long-term Vision and Impact:
.IRH’s investment aims to rejuvenate MCM’s financial health, secure jobs, and offer financial backing and technical expertise for the execution of MCM’s Project Development Plan.
.Ambition to elevate MCM into a 200,000-ton-per-annum copper cathode producer within the next three years, contributing significantly to Zambia’s mining sector growth.
5.Environmental, Social, and Governance (ESG) Commitment:
.IRH underscores its commitment to ESG principles, pledging collaborative efforts with ZCCM-IH and MCM to uphold local supply chains, sustain corporate social responsibility programs, and handle staff implications responsibly.
The Transaction hinges on fulfilling multiple Conditions Precedent, including ZCCM-IH Shareholder Approval, mining licenses renewal, and obtaining approvals from relevant authorities.
ZCCM-IH is diligently preparing a comprehensive Transaction Circular for shareholders to facilitate voting at an Extraordinary General Meeting expected in the first quarter of 2024. Further updates will follow as the process advances.
This landmark partnership signifies a concerted push to bolster Zambia’s mining industry, fortify economic prospects, and cultivate sustainable growth for Mopani Copper Mines Plc.
