The Oceania Times

Top Menu

  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

Main Menu

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

logo

The Oceania Times

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • Asian shares fall as investors brace for inflation report

  • A-Mark Precious Metals (NASDAQ:AMRK) vs. Maison Luxe (OTCMKTS:MASN) Head-To-Head Comparison

  • Stock Market LIVE: Indices flat; Nifty below 17,500; IT, Media drag

  • The big change coming to Australian inflation after Reserve Bank governor Philip Lowe laughed at

  • South Korean won, Philippines peso lead losses among subdued Asian currencies

Commodities
Home›Commodities›EXCLUSIVE Glencore helps Zambia’s Mopani Copper Mines pay bills

EXCLUSIVE Glencore helps Zambia’s Mopani Copper Mines pay bills

By Megan
May 31, 2022
19
0
Share:
  • Glencore helps Mopani meet running costs – sources
  • Mine needs $300 mln investment to expand, boost production
  • Copper production expected to fall 8% this year

JOHANNESBURG, May 31 (Reuters) – 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 .

Register now for FREE unlimited access to Reuters.com

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.”

Zambia’s President Hakainde Hichilema, who was elected in August last year, criticised the Mopani deal while in opposition, saying the state should not take on more debt when it had defaulted two months earlier and was in talks with the International Monetary Fund (IMF) for financial support.

Zambia’s need for investment remains pressing.

It reached a staff-level agreement with the IMF on a $1.4 billion extended credit facility in December, but the money cannot flow until Lusaka and its creditors agree on reducing the debt to sustainable levels.

Since his election, Hichilema has asked his administration to find a new investor for Mopani. Officials say they are “very close” to doing so. read more

‘MASSIVE MONSTER’

Mopani’s Sakanya said the mining company had to renegotiate agreements with suppliers, copper concentrate purchase contracts, letters of credit and overdrafts after the change in ownership. Those negotiations, along with a breakdown at the north shaft in March, resulted in delayed payments.

One supplier said the frequency of payments from Mopani had slowed over recent weeks. “They’ve got this massive monster to run, and they don’t have enough money to run it,” the supplier said, asking not to be named.

“Yes, we do owe some money,” Sakanya said, adding that he could not say how much as the figure is constantly changing. “It’s something we are working through to resolve.”

Reuters could not independently establish how much Mopani owes its suppliers in total.

A fourth source with direct knowledge said government officials asked Copperbelt Energy Corporation (CECZ.LZ), the electricity supplier to the mine, late last year to relax its payment terms, but CEC refused. CEC said Mopani has continued to pay its power bills on time.

Zambia’s mines minister Paul Kabuswe, reached by telephone, declined to comment on whether Glencore was providing financial support to Mopani. “When we find a better partner everything is going to get back to normal,” he said.

Finding a new investor in Mopani is seen as a litmus test for the administration, which wants to show Zambia is open for business and has set an ambitious goal of more than tripling the country’s annual copper production within the next decade.

“I want to find an investor yesterday, that’s the timeline,” Kabuswe said. “I’m in a hurry.”

Mopani, which is more than 80 years old, with its original smelter built in 1937, needs $300 million to fund an expansion that would unlock the potential to produce 225,000 tonnes of copper annually, Sakanya said.

Mopani said it produced 87,618 tonnes of copper cathode in 2021, down from 93,106 tonnes in 2020.

It is expected to produce 80,684 tonnes of copper this year, Sakanya said, putting the near 8% expected drop down to the month-long breakdown and a planned 45-day shutdown of the smelter for maintenance in July.

Glencore decided in April 2020 to put Mopani on care and maintenance, drawing the ire of the Zambian government which wanted it to stay open, and later in 2020 wrote down the value of the mine by $1.041 billion to $861 million. Glencore said it had invested $4.4 billion in Mopani since 2000.

Register now for FREE unlimited access to Reuters.com

Reporting by Helen Reid in Johannesburg, Additional reporting by Chris Mfula and Chiwoyu Sinyanga in Lusaka, Editing by Amran Abocar and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

Source link

TagsAFRANLINSBASMTLBMATBMAT08CINVCMPNYCOMCPPRDIVMINEAFREMRGEREPESEUROPEXCLSVEZCFINFINSFINS08INVTINVT08M:2DZMEMIMETLMINMINEMINE08MTALMTAL08MTPIXMUFUMUFU1NEWS1PRIVTPUBLTOPNWSWEUZM
Previous Article

SEC Proposals for ESG Ignore 80 Years of ...

Next Article

NiSource (NI) Benefits From Investment & Debt ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Megan

Related articles More from author

  • Financial Market

    Analysis: Wall Street weighs job cuts as deals slide in battered markets

    July 29, 2022
    By Megan
  • Australian Economy

    Australia’s prime minister says China should lift trade sanctions; welcomes talks

    June 14, 2022
    By Megan
  • Financial Market

    Wall Street watchdog to laid-off crypto employees: work for us

    June 14, 2022
    By Megan
  • Stock Shares

    Analysis: Volatile U.S. markets boost appeal of dividend stocks

    July 12, 2022
    By Megan
  • Investment

    Lamborghini to invest at least 1.8 bln euros in path towards electrification – paper

    July 1, 2022
    By Megan
  • Stock Shares

    World stocks slump, greenback gains grow as rate hike bets keep investors cautious

    July 14, 2022
    By Megan

Leave a reply Cancel reply

You may interested

  • Brokers

    How was 2021 for Debt and Equity Brokers? – Commercial Observer

  • Investment

    The LHM Company makes new investment to expedite waste reduction in Utah

  • Currencies

    NEWS RELEASE: 11 Companies Continue in the State of Hawaii’s Digital Currency Innovation Lab

  • LATEST REVIEWS

  • TOP REVIEWS

Timeline

  • August 10, 2022

    Asian shares fall as investors brace for inflation report

  • August 10, 2022

    A-Mark Precious Metals (NASDAQ:AMRK) vs. Maison Luxe (OTCMKTS:MASN) Head-To-Head Comparison

  • August 10, 2022

    Stock Market LIVE: Indices flat; Nifty below 17,500; IT, Media drag

  • August 10, 2022

    The big change coming to Australian inflation after Reserve Bank governor Philip Lowe laughed at

  • August 10, 2022

    South Korean won, Philippines peso lead losses among subdued Asian currencies

Best Reviews

Latest News

Stock Shares

Asian shares fall as investors brace for inflation report

People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik Register now for FREE unlimited access ...
  • A-Mark Precious Metals (NASDAQ:AMRK) vs. Maison Luxe (OTCMKTS:MASN) Head-To-Head Comparison

    By Megan
    August 10, 2022
  • Stock Market LIVE: Indices flat; Nifty below 17,500; IT, Media drag

    By Megan
    August 10, 2022
  • The big change coming to Australian inflation after Reserve Bank governor Philip Lowe laughed at

    By Megan
    August 10, 2022
  • South Korean won, Philippines peso lead losses among subdued Asian currencies

    By Megan
    August 10, 2022
  • Recent

  • Popular

  • Comments

  • Asian shares fall as investors brace for inflation report

    By Megan
    August 10, 2022
  • A-Mark Precious Metals (NASDAQ:AMRK) vs. Maison Luxe (OTCMKTS:MASN) Head-To-Head Comparison

    By Megan
    August 10, 2022
  • Stock Market LIVE: Indices flat; Nifty below 17,500; IT, Media drag

    By Megan
    August 10, 2022
  • The big change coming to Australian inflation after Reserve Bank governor Philip Lowe laughed at

    By Megan
    August 10, 2022
  • Asian shares fall as investors brace for inflation report

    By Megan
    August 10, 2022
  • Australian economy survived Covid better than most but recovery could slow, OECD says | Australian ...

    By Megan
    September 14, 2021
  • The Best Online Brokers, According to 5 Financial Experts

    By Megan
    September 14, 2021
  • Is Disaster Looming for Australia’s Economy?

    By Megan
    September 29, 2021

Trending News

  • Stock Shares

    Asian shares fall as investors brace for inflation report

    People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik Register now for FREE unlimited access ...
  • Gold and Precious Metals

    A-Mark Precious Metals (NASDAQ:AMRK) vs. Maison Luxe (OTCMKTS:MASN) Head-To-Head Comparison

    A-Mark Precious Metals (NASDAQ:AMRK – Get Rating) and Maison Luxe (OTCMKTS:MASN – Get Rating) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the ...
  • Stock Shares

    Stock Market LIVE: Indices flat; Nifty below 17,500; IT, Media drag

    Asian markets started on a negative note following a retreat in Wall Street. This was mostly due to the caution ahead of US inflation data that will shape nvestor expectations ...
  • Australian Economy

    The big change coming to Australian inflation after Reserve Bank governor Philip Lowe laughed at

    How Reserve Bank boss getting LAUGHED at on the world stage will radically change Australia’s economy The Australian Bureau of Statistics is trialing a new monthly inflation data series Reserve ...
  • Currencies

    South Korean won, Philippines peso lead losses among subdued Asian currencies

    BENGALURU (Aug 10): Most Asian currencies were subdued on Wednesday, while most stock markets in the region fell, tracking losses on Wall Street, as investors awaited US inflation data later ...
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© Copyright The Oceania Times. All rights reserved.

SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.