Glencore helps Zambia's Mopani Copper Mines pay bills
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Loading... - Milenka Pierre
- 29 Sep 2022
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Mining and commodity trading giant Glencore has helped to fund Zambia's Mopani Copper Mines as the company has been unable to pay its bills on time and the state has yet to find a new investor more than a year after it took over the complex.
Glencore (GLEN.L), which sold Mopani to state mining investment firm ZCCM-IH (ZCCM.LZ), has since helped cover some of Mopani's running costs, including power bills and purchases of copper concentrate from third parties, two sources with direct knowledge said.
One of the sources said Mopani was not generating enough revenue to meet current expenditure, adding that the company could not afford the investments needed to mine more and take advantage of high copper prices .
The sources asked not to be named because they were not authorised to speak to the media.
Glencore has provided letters of credit to Mopani on two or three occasions when the company did not have enough cash to buy copper concentrate, effectively guaranteeing Mopani's purchase, a third source close to Mopani said.
Mopani Copper Mines CEO Charles Sakanya said the company had not received any loans from Glencore and that claim Glencore was covering some of Mopani's costs was speculation. He did not respond to a request for comment on the letters of credit. Glencore is the sole offtaker of copper from the mine, under the deal that saw ZCCM-IH take control of Mopani on March 31 last year for $1.5 billion in debt and a nominal $1 in cash.
The sources did not say how much funding Glencore had provided.
Glencore did not answer Reuters' questions about Mopani's costs, but said in a statement: "Glencore is continuing to work alongside ZCCM-IH to ensure the success of Mopani through our offtake agreements and related funding arrangements." Read More...
