Zambia Aims for Glencore Debt Restructuring with New Mopani Investor
Zambia is in the process of restructuring a $1.5 billion debt owed by Mopani Copper Mines to Glencore, originating from Glencore’s acquisition of Mopani in 2021, ZCCM-Investment Holdings (ZCCM-IH) announced on Friday.
A Glencore spokesperson confirmed ongoing discussions on the debt restructuring but emphasized that no final agreement had been reached.
In 2022, Glencore had written down the Mopani debt to $596 million as the copper miner struggled to meet production targets due to insufficient funding.
In November, Zambia selected the United Arab Emirates’ International Resources Holdings (IRH) as the new strategic equity investor in Mopani, acquiring a 51% stake with a $1.1 billion capital injection.
As part of this agreement, IRH will provide $400 million as a shareholder loan to clear Mopani’s debt, including $300 million for the Glencore debt and $100 million for third-party letters of credit secured by Glencore.
This restructuring will replace the gross debt owed by Mopani to Glencore with the shareholder loan owed to Delta, IRH’s subsidiary, resulting in a net reduction in Mopani’s debt of over $1.2 billion.
Additionally, a royalty agreement was established, entitling Glencore to an unspecified share of Mopani’s profit if the copper price surpasses $12,000 per ton.
The restructuring aims to revamp the relationship between Glencore and Mopani, eliminating indebtedness between the two.
IRH’s investment is expected to support Mopani’s goal of increasing copper output to 200,000 tons annually over the next three years. In 2022, Mopani produced 72,694 metric tons of copper, a decline from 87,618 metric tons in 2021.
