Glencore helps Zambia’s Mopani Copper Mines pay payments

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JOHANNESBURG — Mining and commodity buying and selling big Glencore has helped to fund Zambia’s Mopani Copper Mines as the corporate has been unable to pay its payments on time and the state has but to discover a new investor greater than a yr after it took over the advanced.

Glencore, which bought Mopani to state mining funding agency ZCCM-IH, has since helped cowl a few of Mopani’s operating prices, together with energy payments and purchases of copper focus from third events, two sources with direct data stated.

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One of many sources stated Mopani was not producing sufficient income to satisfy present expenditure, including that the corporate couldn’t afford the investments wanted to mine extra and benefit from excessive copper costs.

The sources requested to not be named as a result of they weren’t licensed to talk to the media.

Glencore has supplied letters of credit score to Mopani on two or three events when the corporate didn’t have sufficient money to purchase copper focus, successfully guaranteeing Mopani’s buy, a 3rd supply near Mopani stated.

Mopani Copper Mines CEO Charles Sakanya stated the corporate had not obtained any loans from Glencore and that declare Glencore was overlaying a few of Mopani’s prices was hypothesis. He didn’t reply to a request for touch upon the letters of credit score.

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Glencore is the only real offtaker of copper from the mine, below the deal that noticed ZCCM-IH take management of Mopani on March 31 final yr for $1.5 billion in debt and a nominal $1 in money.

The sources didn’t say how a lot funding Glencore had supplied.

Glencore didn’t reply Reuters’ questions on Mopani’s prices, however stated in a press release: “Glencore is constant to work alongside ZCCM-IH to make sure the success of Mopani by our offtake agreements and associated funding preparations.”

Zambia’s President Hakainde Hichilema, who was elected in August final yr, criticized the Mopani deal whereas in opposition, saying the state mustn’t tackle extra debt when it had defaulted two months earlier and was in talks with the Worldwide Financial Fund (IMF) for monetary assist.

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Zambia’s want for funding stays urgent.

It reached a staff-level settlement with the IMF on a $1.4 billion prolonged credit score facility in December, however the cash can’t move till Lusaka and its collectors agree on decreasing the debt to sustainable ranges.

Since his election, Hichilema has requested his administration to discover a new investor for Mopani. Officers say they’re “very shut” to doing so.

‘MASSIVE MONSTER’

Mopani’s Sakanya stated the mining firm needed to renegotiate agreements with suppliers, copper focus buy contracts, letters of credit score and overdrafts after the change in possession. These negotiations, together with a breakdown on the north shaft in March, resulted in delayed funds.

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One provider stated the frequency of funds from Mopani had slowed over latest weeks. “They’ve acquired this large monster to run, and so they don’t find the money for to run it,” the provider stated, asking to not be named.

“Sure, we do owe some cash,” Sakanya stated, including that he couldn’t say how a lot because the determine is consistently altering. “It’s one thing we’re working by to resolve.”

Reuters couldn’t independently set up how a lot Mopani owes its suppliers in complete.

A fourth supply with direct data stated authorities officers requested Copperbelt Power Company, the electrical energy provider to the mine, late final yr to loosen up its fee phrases, however CEC refused. CEC stated Mopani has continued to pay its energy payments on time.

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Zambia’s mines minister Paul Kabuswe, reached by phone, declined to touch upon whether or not Glencore was offering monetary assist to Mopani. “After we discover a higher accomplice the whole lot goes to get again to regular,” he stated.

Discovering a brand new investor in Mopani is seen as a litmus take a look at for the administration, which desires to point out Zambia is open for enterprise and has set an formidable purpose of greater than tripling the nation’s annual copper manufacturing throughout the subsequent decade.

“I wish to discover an investor yesterday, that’s the timeline,” Kabuswe stated. “I’m in a rush.”

Mopani, which is greater than 80 years outdated, with its authentic smelter in-built 1937, wants $300 million to fund an growth that might unlock the potential to provide 225,000 tonnes of copper yearly, Sakanya stated.

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Mopani stated it produced 87,618 tonnes of copper cathode in 2021, down from 93,106 tonnes in 2020.

It’s anticipated to provide 80,684 tonnes of copper this yr, Sakanya stated, placing the close to 8% anticipated drop all the way down to the month-long breakdown and a deliberate 45-day shutdown of the smelter for upkeep in July.

Glencore determined in April 2020 to place Mopani on care and upkeep, drawing the ire of the Zambian authorities which needed it to remain open, and later in 2020 wrote down the worth of the mine by $1.041 billion to $861 million. Glencore stated it had invested $4.4 billion in Mopani since 2000.

(Reporting by Helen Reid in Johannesburg, Extra reporting by Chris Mfula and Chiwoyu Sinyanga in Lusaka, Enhancing by Amran Abocar and Barbara Lewis)

Article content material

JOHANNESBURG — Mining and commodity buying and selling big Glencore has helped to fund Zambia’s Mopani Copper Mines as the corporate has been unable to pay its payments on time and the state has but to discover a new investor greater than a yr after it took over the advanced.

Glencore, which bought Mopani to state mining funding agency ZCCM-IH, has since helped cowl a few of Mopani’s operating prices, together with energy payments and purchases of copper focus from third events, two sources with direct data stated.

Article content material

One of many sources stated Mopani was not producing sufficient income to satisfy present expenditure, including that the corporate couldn’t afford the investments wanted to mine extra and benefit from excessive copper costs.

The sources requested to not be named as a result of they weren’t licensed to talk to the media.

Glencore has supplied letters of credit score to Mopani on two or three events when the corporate didn’t have sufficient money to purchase copper focus, successfully guaranteeing Mopani’s buy, a 3rd supply near Mopani stated.

Mopani Copper Mines CEO Charles Sakanya stated the corporate had not obtained any loans from Glencore and that declare Glencore was overlaying a few of Mopani’s prices was hypothesis. He didn’t reply to a request for touch upon the letters of credit score.

Article content material

Glencore is the only real offtaker of copper from the mine, below the deal that noticed ZCCM-IH take management of Mopani on March 31 final yr for $1.5 billion in debt and a nominal $1 in money.

The sources didn’t say how a lot funding Glencore had supplied.

Glencore didn’t reply Reuters’ questions on Mopani’s prices, however stated in a press release: “Glencore is constant to work alongside ZCCM-IH to make sure the success of Mopani by our offtake agreements and associated funding preparations.”

Zambia’s President Hakainde Hichilema, who was elected in August final yr, criticized the Mopani deal whereas in opposition, saying the state mustn’t tackle extra debt when it had defaulted two months earlier and was in talks with the Worldwide Financial Fund (IMF) for monetary assist.

Article content material

Zambia’s want for funding stays urgent.

It reached a staff-level settlement with the IMF on a $1.4 billion prolonged credit score facility in December, however the cash can’t move till Lusaka and its collectors agree on decreasing the debt to sustainable ranges.

Since his election, Hichilema has requested his administration to discover a new investor for Mopani. Officers say they’re “very shut” to doing so.

‘MASSIVE MONSTER’

Mopani’s Sakanya stated the mining firm needed to renegotiate agreements with suppliers, copper focus buy contracts, letters of credit score and overdrafts after the change in possession. These negotiations, together with a breakdown on the north shaft in March, resulted in delayed funds.

Article content material

One provider stated the frequency of funds from Mopani had slowed over latest weeks. “They’ve acquired this large monster to run, and so they don’t find the money for to run it,” the provider stated, asking to not be named.

“Sure, we do owe some cash,” Sakanya stated, including that he couldn’t say how a lot because the determine is consistently altering. “It’s one thing we’re working by to resolve.”

Reuters couldn’t independently set up how a lot Mopani owes its suppliers in complete.

A fourth supply with direct data stated authorities officers requested Copperbelt Power Company, the electrical energy provider to the mine, late final yr to loosen up its fee phrases, however CEC refused. CEC stated Mopani has continued to pay its energy payments on time.

Article content material

Zambia’s mines minister Paul Kabuswe, reached by phone, declined to touch upon whether or not Glencore was offering monetary assist to Mopani. “After we discover a higher accomplice the whole lot goes to get again to regular,” he stated.

Discovering a brand new investor in Mopani is seen as a litmus take a look at for the administration, which desires to point out Zambia is open for enterprise and has set an formidable purpose of greater than tripling the nation’s annual copper manufacturing throughout the subsequent decade.

“I wish to discover an investor yesterday, that’s the timeline,” Kabuswe stated. “I’m in a rush.”

Mopani, which is greater than 80 years outdated, with its authentic smelter in-built 1937, wants $300 million to fund an growth that might unlock the potential to provide 225,000 tonnes of copper yearly, Sakanya stated.

Article content material

Mopani stated it produced 87,618 tonnes of copper cathode in 2021, down from 93,106 tonnes in 2020.

It’s anticipated to provide 80,684 tonnes of copper this yr, Sakanya stated, placing the close to 8% anticipated drop all the way down to the month-long breakdown and a deliberate 45-day shutdown of the smelter for upkeep in July.

Glencore determined in April 2020 to place Mopani on care and upkeep, drawing the ire of the Zambian authorities which needed it to remain open, and later in 2020 wrote down the worth of the mine by $1.041 billion to $861 million. Glencore stated it had invested $4.4 billion in Mopani since 2000.

(Reporting by Helen Reid in Johannesburg, Extra reporting by Chris Mfula and Chiwoyu Sinyanga in Lusaka, Enhancing by Amran Abocar and Barbara Lewis)