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Abu Dhabi’s IRH to invest $1.1bn in Zambia copper mines

Vale Base Metals is North America’s largest integrated nickel producer and the largest copper business globally Unsplash.com
The Abu Dhabi company will provide $620 million in new equity capital in return for a 51% stake in Mopani Copper Mines

UAE-based International Resources Holdings (IRH) will invest $1.1 billion as a strategic equity partner in Zambia’s Mopani Copper Mines (MCM).

The investment will fund Mopani’s working capital, business expansion plan and pay off part of the $1.5 billion debt owed to previous owner Glencore, state-owned ZCCM Investments Holdings (ZCCM-IH) said in a statement.

The Abu Dhabi company will provide $620 million in new equity capital in return for a 51 percent stake in MCM.

Nearly $400 million will be provided as a shareholder loan to part settle the original Glencore debt of $1.5 billion plus interest.

Last month, Zambia picked IRH, a unit of Abu Dhabi-listed International Holdings Company, as the strategic equity partner in MCM.

Zambia has been looking for a new investor since taking over the assets from Glencore in 2021 in a $1.5 billion deal funded by debt.

An additional $80 million shareholder loan could also be advanced if required, ZCCM-IH said.

Mopani requires $300 million to expand production to 200,000 metric tons of copper in the next three years, Reuters reported. The miner produced 72,694 metric tonnes of copper in 2022, down from 87,618 in 2021.

The transaction is estimated to close in the first quarter of 2024.

Copper hit $8,450 a metric tonne on the London Metals Exchange, a four-month high, on December 1. Four days later, the price was nearer $8,250, while by December 8, it had recovered to around $8,350. 

There are four major copper markets in the Middle East: the UAE, Saudi Arabia, Turkey and Iran. Between them, they account for around 5 percent of global consumption, or 1,200 to 1,250 kilotonnes per year. The UAE accounted for 405 kilotonnes in 2023. 

Saudi Arabia’s Ma’aden is leading the charge, with new local exploration and mine investment, while the UAE and Saudi Arabia are both now boosting their involvement in mining companies in Africa, Latin America and Asia.

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