ZAMBIA’S permanent secretary in the Ministry of Mines expected the country would finance the purchase of a larger stake in Mopani Copper Mines from Glencore despite it having defaulted on a Eurobond interest payment last week.
Barnaby Mulenga told Bloomberg News the state-owned ZCCM-Investment Holdings would build on its 10% share in the struggling copper mine. Glencore, which owns 73.1% of Mopani Copper, was blocked from mothballing the operation earlier this year and risked having its mining rights revoked by the state as part of the dispute.
“The resource attracts money, so the issue of financing is the least of the worries for the Zambian government,” Mulenga said in an interview with Bloomberg last week. Glencore and First Quantum Minerals, which owns the balance of the shares in Mopani Copper, declined to comment.
While impairments of $1.14bn at Mopani Copper contributed to Glencore posting a first-half loss, the Switzerland-based commodity giant still assigned a value of $704m to the operations, said Bloomberg News.
Zambia, Africa’s second largest copper producer, relies on the metal for about 70% of its export earnings, said the newswire. The impact of the coronavirus pandemic is forecast to cut output this year to about 764,188 tons, far short of the nation’s target of 1 million tons, according to Zambia Chamber of Mines.
“Hopefully we will come to some consensus to what should this tax regime look like,” said Mulenga who declined to provide details on how much the country intended to buy of Glencore’s stake in Mopani.
