Abu Dhabi Firm Eyes Acquisition of Zambia’s Lubambe Copper Mine

An entity of the International Holding Company (IHC), Abu Dhabi’s esteemed corporation, has expressed interest in acquiring Zambia’s Lubambe copper mine, a deal that could potentially complicate the ongoing sale process initiated by China’s JCHX Mining, according to sources familiar with the matter.

International Resources Holding (IRH), a subsidiary of IHC, has communicated its interest to EMR Capital, a private equity manager holding an 80% stake in the Lubambe copper project, currently up for sale.

This development adds a layer of complexity to the sale process already initiated by JCHX, a Shanghai-listed mine servicing firm, which entered into an agreement with EMR to acquire its stake in Lubambe in January.

However, the completion of the sale process is contingent upon approval from the Zambian government, a step that remains pending and unclear, as confirmed by one of the sources.

Notably, the Zambian government holds a 20% stake in Lubambe through its state-owned entity, ZCCM-IH.

IRH’s interest in Lubambe underscores the aggressive pursuit of critical metal supplies in Africa by cash-rich oil majors from the Middle East, particularly the United Arab Emirates and Saudi Arabia, as they aim to diversify their economies amidst the global energy transition.

This interest puts Middle Eastern investors in direct competition with Chinese companies, including state-backed firms, also vying for strategic deals in Africa to fortify China’s dominance in crucial minerals, essential for various industries, including electric vehicle manufacturing.

Although EMR Capital has a binding agreement with JCHX, precluding it from considering new offers, it is aware of IRH’s interest in acquiring the assets.

IRH has informed both the Zambian government and ZCCM-IH of its intentions, although it has yet to present a formal offer to EMR.

This move by IRH echoes its recent acquisition of a majority stake in Zambia’s Mopani Copper Mines, marking its entry into Africa’s second-largest copper producer.

EMR’s decision to divest its stake in the Lubambe mine is driven by the maturity of its funds, compounded by delays caused by the COVID-19 pandemic in the project’s development.

Additionally, EMR recently sold a majority stake in the adjacent Mingomba copper project to California-based startup KoBold Metals.

Despite producing approximately 15,000 tons of copper last year, Lubambe aims to enhance its output to around 2,500 tons per month for long-term sustainability.

JCHX’s proposal to acquire EMR’s stake includes assuming the project’s substantial debt, signaling its commitment to Lubambe’s future prospects.

As the sale process unfolds, Zambia’s Ministry of Mines plays a pivotal role, although it has yet to respond to inquiries regarding the developments.