Africa’s red metal hotspot Zambia continues to make strides to ramp its copper production, with the most recent being handover of Mopani Copper Mines to its new majority shareholder. Head of State President Hakainde Hichilema on 21 March handed over the mine to new majority shareholder International Resources Holdings of the United Arab Emirates in a $1.1 billion book valued deal. This transaction has dawned the sun on a mining town of Kitwe, home to key red metal operations that has seen a slow down in view of exit of former shareholder Glencore Corporation.
READ ALSO: Mining Outlook gets Positive Cue as Zambia Seals Mopani Deal, Commodities Trading JV on the Cards
“Today marked a proud day for Kitwe, the Copperbelt, Zambia, and the mining industry, heralding a new beginning for Mopani Copper Mines. We celebrated the revitalization of Kitwe, which promises to enhance the livelihoods within the Copperbelt Region and indeed, the entire nation,” President Hichilema said
“We express our profound gratitude for the re-launch of Mopani Copper Mines in partnership with our new joint venture partners, International Resource Holdings (IRH) from Abu Dhabi. This moment, long awaited by our citizens, is not a handover but a meticulously negotiated partnership with IRH that represents mutual respect and equitable benefits. Our citizens will retain a 49% shareholding through ZCCM-IH, affirming our commitment to national benefit,” he said
READ ALSO: Invest with Confidence and Power the Future – Hichilema Markets Zambia at Mining Indaba
Mopani Copper Mines production has been capped at 72,000 MT since Glencore exited as the operation struggled with working capital finance. Thursday’s development gives the mine a fresh lease of capital and possibilities to realize a potential of 225,000 MT annually which will get Zambia closer to its 3 million metric ton ambition in the next seven years. The Democratic Republic of Congo has surpassed the Southern African nation with a 2.5 million metric tons annual capacity compared to below 700,000 MT that Zambia recorded in 2023. The copper producer however has an array of exploration discoveries biggest of which is the Mingomba deposit backed by billionaire Bill Gates and Jeff Bezos entity – Kobold Metals, the largest in a century established using Artificial Intelligence (AI) methods. Zambia continues to put its mining house in order with other developments such as the resolution of the Vedanta Resources – ZCCM Investment Holdings impasses that will see the shareholder invest $1.3 billion over half a decade period and resuscitation of the shut China Non Ferrous, Luanshya Copper Mines shaft 28.
The strides mark a ray of hope for downstream businesses that feed off the mining faculty anchor to inject life into the veins of the Copperbelt of Africa. Mining remains key supplier of foreign exchange to the Zambian market whose boom does support the exchange rate and above all creates employment to alleviate poverty. Transcending mining will be investments in the energy, infrastructure and transport sectors.
The handover comes at a time the red metal producer is on the cusp of a private debt restructure breakthrough and is grappling with El – Nino induced drought impacting power generation and food security. The Mopani deal is the largest mining deal sealed on Hichilema’s clock.
IR Holdings through its subsidiary Delta Mining will hold 51% stake in Mopani while 49% will be held by ZCCM – IH on behalf of the government of Zambia.
With the race for green metals on, the Copperbelt of Africa continues to attract interest from global players that are currently supporting transport infrastructure development in rail on the Lobito (western) and Dar-es- salaam (eastern) corridors. This demand for red metal continues to keep prices on the London Metal Exchange buoyant.
The Kwacha Arbitrageur
