UAE's International Resources Holdings to Invest $1.1 Billion in Zambia's Mopani Copper Mines

On Friday (22/12), Zambia's state-owned ZCCM Investments Holdings (ZCCM-IH) announced that the United Arab Emirates' International Resources Holdings (IRH) is set to invest a significant $1.1 billion in Mopani Copper Mines. In exchange, IRH will secure a controlling 51% stake in the business.

The decision to choose IRH, a subsidiary of Abu Dhabi's renowned International Holdings Company (IHC), came after a competitive selection process where numerous investors expressed interest in the copper assets of Mopani.

This move by Zambia follows its acquisition of Mopani's assets from Glencore in 2021, a transaction that involved a hefty $1.5 billion payout to the Swiss commodities giant, facilitated through debt financing.

With IRH's investment, a substantial portion will go towards Mopani's expansion initiatives, ensuring its growth trajectory.

ZCCM-IH provided specifics on the allocation of the investment, stating, "Of the $1.1 billion, $620 million will be infused as fresh equity capital, granting IRH the sought-after 51% stake in Mopani. An additional $400 million will be extended as a shareholder loan, earmarked primarily to address the residual $1.5 billion debt from the Glencore transaction, inclusive of accrued interest." Furthermore, ZCCM-IH indicated the potential for an extra $80 million shareholder loan if circumstances demand.

The infusion of funds is timely for Mopani, which has ambitious plans to elevate its copper production to 200,000 metric tons within the forthcoming three years.

A comparison of its recent performance shows a decline, producing 72,694 metric tons in 2022, a drop from 87,618 metric tons in the preceding year.

Financially, the first half of the year up to June 30 witnessed Mopani grappling with increased losses, widening to 4.02 billion Zambian kwacha ($158.45 million) due to reduced output, escalated operational expenses, and heightened borrowing costs.

Nelson Banya and Chris Mfula / Reuters