LUSAKA/JOHANNESBURG (Reuters) – Zambia’s mining investment arm ZCCM-IH is seeking a controlling stake in Glencore subsidiary Mopani Copper Mines, Zambia’s mines minister said on Tuesday, after a disagreement over Glencore’s plan to halt production.
ZCCM-IH currently holds a 10% stake in Mopani Copper Mines. Glencore is the majority owner with 73.1% and First Quantum Minerals owns 16.9%.
A 10% stake was “not sufficient” to determine Mopani’s future, Mines Minister Richard Musukwa said in a statement, and ZCCM-IH was therefore seeking a larger stake “with a view to holding a controlling stake in Mopani”.
The mines minister told Reuters ZCCM-IH was seeking a 51% shareholding “or even more”.
Musukwa said the government has a team liaising with ZCCM-IH for the negotiations with Glencore, and ZCCM-IH is engaging a transaction adviser.
Glencore said in a statement discussions with ZCCM-IH “and other shareholders” were progressing and further updates would be issued as appropriate.
Asked about ZCCM-IH seeking a controlling stake in Mopani, a Glencore spokesman declined to comment.
A majority stake would require Glencore selling more than 41% of the company to ZCCM-IH.
Glencore’s announcement in April that it planned to suspend operations at Mopani, citing low copper prices and COVID-19 disruptions, sparked a backlash from Zambia’s government, which said Mopani had not given enough notice and threatened to revoke the company’s mining licences.
In May, Mopani said it would resume mining operations for 90 days but still expected to go into care and maintenance – a term for a temporary production halt during which a mine site is maintained ahead of an eventual restart.
On July 16 the company said it would appeal the mines ministry’s decision to reject its proposal to suspend the operations.
The government is working closely with labour unions and suppliers to ensure operations continue to run smoothly during the negotiations, Musukwa said.