Glencore consolidates DRC copper asset ownership

VANCOUVER (miningweekly.com) – Global diversified miner Glencore has increased its holding in copper assets in the Democratic Republic of Congo (DRC) after buying a 31% interest in Mutanda Mining from billionaire mining tycoon Dan Gertler’s Fleurette Group and a 10.25% stake in Katanga Mining.

Glencore paid Fleurette $922-million for the Mutanda shares and $38-million for the Katanga shares.

Fleurette and its affiliates owe Glencore outstanding loans, secured over the Mutanda shares, totalling $556-million, of which $120-million comprises accrued interest.

Glencore has also acquired shareholder loans owed to the Fleurette group by Mutanda in the amount of about $130-million. Accordingly, the total cash consideration payable by the Glencore group in respect of the transactions is $534-million.

Glencore has also acquired a further 15.33-million shares in Katanga Mining, an interest of about 0.8%, which was held as the security for a loan provided to Ruwenzori Limited, a member of the Fleurette Group, in connection with Ruwenzori’s acquisition of 25-million shares in Nikanor, which were issued as part of a private placement.  Nikanor subsequently merged with Katanga and the shares were exchanged for shares in Katanga.

Swiss-based Glencore now owns 100% of Mutanda and about 86.33% of Katanga.  

Gertler said in a statement on Monday that with the Mutanda mine operating at full capacity, the company feels now is the right time to exit its investment and to reinvest in further brownfield and greenfield opportunities in the DRC.

Mutanda produced 213 300 t of copper in 2016, in line with 2015. Cobalt output of 24 500 t was 8 000 t, or 48%, higher year-on-year, reflecting various plant optimisation projects completed during the year.

On September 11, 2015, Katanga Mining suspended processing of copper and cobalt during the construction phase of the whole ore leach (WOL) project. The suspension continued through the fourth quarter of 2016 and production is not expected to resume until the WOL project is commissioned, which is expected to be in the second half of 2017. In 2015, the mine produced 113 674 t of copper and 2 901 t of finished cobalt.