Glencore Sells 40% Congo Mine Stake to US-Backed Consortium
Glencore has announced plans to sell a 40% stake in its mine assets located in the Democratic Republic of Congo (DRC). The transaction involves an agreement with the Orion Critical Mineral Consortium (Orion CMC). This deal pertains to the Mutanda and Kamoto mines, both significant producers of copper and cobalt.
Details of the Mine Assets
The Mutanda Mining and Kamoto Copper Company are major assets in Glencore’s portfolio. In the previous year, these mines produced:
- 247,800 tonnes of copper, accounting for 30% of Glencore’s total global output
- 35,100 tonnes of cobalt
Glencore holds a 95% stake in Mutanda and a 75% stake in Kamoto.
Proposed Transaction Overview
The total enterprise value of the deal is estimated at $9 billion. As part of the agreement, Orion CMC will be allowed to appoint non-executive directors and manage the sale of production to specified buyers. These actions align with the US-DRC strategic partnership agreement.
Even after this sale, Glencore will maintain operational control of the mines.
Orion CMC Background
Orion CMC was formed in October with backing from Abu Dhabi’s ADQ and the US International Development Finance Corp. (DFC). The consortium has plans to invest over $5 billion in the critical minerals sector, supporting US interests and alliances.
Future Collaborations and Investments
Orion CMC aims to collaborate with the DRC government and Gécamines, its existing partner in the Kamoto mine, to expand operations. Additionally, they intend to acquire more projects related to critical minerals across the DRC and the wider African copper belt.
Impact of the Deal
DFC CEO Ben Black highlighted that this partnership could yield substantial benefits for both the US and the DRC. The DFC has previously committed over $1 billion to support major projects in the DRC, including a copper and cobalt venture with Gécamines.
Moreover, US Deputy Secretary of State Christopher Landau noted that this transaction encourages US investment in the DRC’s mining industry, fostering secure critical mineral flows between the two nations.
Current Glencore Developments
This move comes as Glencore explores a potential merger with Rio Tinto, which could lead to a significant impact on the copper mining market. Following the announcement of this stake sale, Glencore’s shares saw a 2.9% increase, elevating its market capitalization to approximately £61 billion.
