Zambia’s head of state Dr. Edgar Lungu on January 08, hinted that talks with Glencore Corporation over Mopani Copper Mines (MCM) would soon be concluded. Dr. Edgar Lungu said this when he addressed Mopani miners during his visit to the mine as part of his 3 day tour of the Copperbelt of Africa region. The President toured the synclinorium concentrator at Nkana before meeting with mine union leaders and miners.
“Just as we refused for the mine to go under care and maintenance, we have been talking to Glencore and are happy to announce that we will be reaching a conclusion shortly,” President Lungu said in his address.
Earlier in 2020 and for years now, Glencore Corporation, the majority shareholder in Mopani Copper Mine has attempted to go under care maintenance as part of a business review decision to improve operations. However Zambian mining authorities have countered this as it would result in over 10,000 layoffs which contradicts the governments mandate of creating employment.
“Despite the ups and downs we have still been able to meet our obligations with suppliers and contractors. We have made a bit of money but what we need is to increase production,” Mopani Chief Executive Officer Charles Sakanya said.
Glencore has instead agreed to offload its 73.1% stake to the Zambian government represented by mining investment vehicle ZCCM-IH. However it remains vague as to how the government will finance the share purchase in light of its cash strapped position as fiscal posture remains elevated from a $12.97bln external debt burden for which the copper producer defaulted on a $42.5mln coupon on a bond maturing in 2024.
In the recently launched Economic Recovery Plan (ERP), Zambia would be looking to increase its shareholding in key mines especially at a time copper prices are in rebound phase on the London Metal Exchange flirting with highs of just shy of $8,000/MT.
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