SEATTLE (Scrap Monster): Abu Dhabi’s International Holding Company has expressed interest in taking over a key Zambian copper mine that is up for sale, according to four people familiar with the matter.
The approach by the United Arab Emirates’ largest listed company comes as South African miner Sibanye-Stillwater is vying to take on Mopani Copper Mines, a prized but struggling state-owned asset in Africa’s second-biggest producing country, these people added.
Mopani produces the metal used in power lines, electric cars and renewable power. Two Chinese groups, Zijin Mining and Norinco, a defence company, which were initially part of the auction process for the mine, have dropped out, three of the people said.
Zijin’s departure was due to delays on the Zambian side of the process, while Norinco has had sanctions imposed on it by the US government, one of the people added. The sale of the mine also comes amid heightening geopolitical tensions between China and the US, which is stepping up its efforts to secure strategic minerals such as copper, cobalt and graphite.
In particular, Washington is placing a growing emphasis on preventing Chinese companies from tying up important supply sources in Africa. Washington is reviewing giving $250mn of financing to help build the Angolan leg of the Lobito Corridor railway that will help the Democratic Republic of Congo and Zambia export commodities.
It is also supporting jointly with the EU the launch of a pre-feasibility study to extend the line to Zambia. Commodity trader Glencore sold its majority stake in Mopani to Zambia in 2021 in return for a government promise to repay $1.5bn of loans in exchange for future output.
The underground mine is haemorrhaging cash because of operational challenges and high costs, posting pre-tax losses of $300mn last year.
Any buyer would have to fully repay Glencore the debt it is owed or continue to give the Swiss trading house supplies of metal produced in order to settle the debt.
Courtesy: www.ft.com
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