Ivanhoe signs up to be US-backed African rail line’s first user

Ivanhoe Mines Ltd., chaired by billionaire Robert Friedland, and commodities trader Trafigura Group signed deals to transport copper by rail from the Democratic Republic of Congo to neighboring Angola’s port of Lobito, marking the first long-term deal for the railway project that the US government is backing.

Trafigura is part of the consortium that won a 30-year concession to operate the Lobito railroad that could become a key export route for DRC’s fast-growing production of copper and cobalt — both crucial metals for the energy transition. Ivanhoe says the route could drastically cut transport times and lower emissions.

“This is fantastic news for the Congo,” Friedland said in a speech in Cape Town Wednesday. “This brings the mineral rich region of the Congo to world markets. And this kind of infrastructure development is critical for the development of the African continent.”

Mining companies operating in the copper belt that straddles Congo and Zambia have traditionally trucked their metals down to South Africa’s Durban port. This journey can take more than a month. Lobito promises to cut trip times to less than a week, to an Atlantic port that’s closer to the US and European Union. Both powers are backing the project financially, as part of their efforts to counter China’s heavy influence in the region.

The US has committed $250 million to the refurbishment of the line in Angola, and is funding a study to link the railway into Zambia as part of a project that will cost an estimated $1.6 billion. That’s part of an acceleration of US investment in Africa, said Amos Hochstein, senior adviser to US President Joe Biden for energy and investment. It’s also catalyzing private investment, he said.

Infrastructure is emerging as a key investment area for funds including BlackRock Inc., led by Larry Fink.

“We’ve seen a transformation from the financial industry worldwide but especially in the US from some skepticism to a realization that this is the new frontier of investment to enable the kind of supply chains that we are going to need,” Hochstein said in an interview Tuesday. “There’s interest in real investment, and translated from not just Larry Fink talking about it but we’re seeing money being put to action, money being raised for the purpose of infrastructure in low and middle income countries.”  

The Lobito Atlantic Railway concessionaires, which also include Mota-Engil and Vecturis, will ramp up the line’s export capacity to one million tons yearly by the end of the decade, Trafigura said in a statement Wednesday. Trafigura’s export capacity allocation on the line will be 450,000 tons from 2025. 

Ivanhoe’s massive Kamoa-Kakula copper mine, jointly owned with Zijin Mining, has agreed an allocation of between 120,000 tons and 240,000 tons.

This article originally appeared on Bloomberg

Bill Gates-backed mining company discovers vast Zambian copper deposit

A mining start-up backed by Bill Gates and Jeff Bezos says it has discovered a vast copper deposit in Zambia, offering a potential boost to the west’s efforts to cut its reliance on China for metals that are vital to decarbonise everything from cars to power transmission systems.

KoBold Metals said on Monday that it had found Zambia’s largest copper deposit in a century, estimating that the Mingomba site in the northern Copperbelt province will become one of the world’s top three high-grade copper mines.

The discovery comes as the US government embarks on a charm offensive and infrastructure push in Africa in an effort to compete with China’s control over minerals that are critical for defence, renewable power and electric vehicles. The US government is backing the development of the Lobito railway, a line to transport metals in the region connecting the Democratic Republic of Congo and Zambia to the Lobito port in Angola.

While demand for copper is forecast to soar as countries set up efforts to electrify their transportation systems and pivot to renewable energy, the world’s largest mining companies are struggling to find high-quality assets.

Copper, which is widely used in construction and industry, is expected to undergo a boom in demand as it is heavily used in power transmission lines, electric vehicles and wind turbines.

“We’ve spent a year with the largest fleet of drilling rigs in Southern Africa,” Josh Goldman, founder and president of KoBold Metals, told the Financial Times. “We now know that Mingomba will be one of the very highest grade large copper mines when put into production and it’s very much like Kakula in scale and in grade.”

KoBold expects Mingomba will rival output at the deposit that is part of US billionaire Robert Friedland’s giant Kamoa-Kakula project in the Democratic Republic of Congo.

Backed by Breakthrough Energy Ventures, a climate change investment vehicle founded by Bill Gates, KoBold deploys artificial intelligence to scrape historical geological archives — including old PDFs and even maps hand painted on linen — and uses algorithms to help decide where to explore for minerals.

The California-based company is valued at $1.15bn, and also counts BHP, the world’s largest mining group, and oil major Equinor, as investors.

KoBold aims to start producing copper at the $2bn underground mine by the early 2030s.

The project is yet to conduct a pre-feasibility study, which provides early estimates of project costs and how economically the metal can be extracted.

If successful, the project would play a big role in meeting Zambian president Hakainde Hichilema’s ambition to more than treble the country’s copper output to 3mn tonnes by 2032, and help the nation dig its way out of debt.

Spending by the world’s biggest mining companies on copper exploration was small relative to volume of the metals the world was expected to need, Goldman said. Exploration companies, meanwhile, were struggling to raise capital because of interest rate hikes, he added.

“Exploration is where babies come from. You can help babies grow but you’ve got to get the birth rate up,” said Goldman. “That’s the hardest part: how do you find things in the first place.”

Goldman added that the company was evaluating a public listing in the next three or four years.

This article originally appeared on Financial Times

President Hichilema to Deliver Keynote at Mining Indaba 2024

Mining Indaba is honoured to announce that Zambia’s President Hakainde Hichilema will deliver a keynote address in 2024

Zambia’s President Hakainde Hichilema is set to deliver a keynote address at Mining Indaba 2024, demonstrating his unwavering dedication to revitalising his country’s mining sector and delivering jobs and economic growth to the people of Zambia.

This will be Hichilema’s second appearance at Mining Indaba as President, having delivered a keynote address in May 2022, shortly after his landslide election victory in 2021.

Since this historic election, President Hichilema has made quick progress towards achieving his objectives, implementing several measures to revitalise the mining sector in Zambia. Already the seventh largest copper producer in the world, Hichilema has set out to advance Zambia’s ranking with an ambitious goal of expanding copper production from 800,000 tonnes per year currently to around 3 million tonnes of copper by 2030.

Under Hichilema’s leadership, the Government of Zambia has reviewed the mining tax framework, ensuring a stable and competitive taxation system while eliminating double taxation. Furthermore, President Hichilema has personally spearheaded efforts to attract investment along the mining value chain, exemplified by the signing of a memorandum of understanding with the Democratic Republic of Congo to build a regional value chain for electric vehicle batteries. These initiatives have already yielded positive results, with major mining groups reinvesting in Zambia and the country's copper opportunities gaining renewed interest from global players.

During his keynote at Investing in African Mining Indaba, the President is expected to delve into the future of mining in Zambia, outlining his plans to expand copper production and position the country as a major player in the global mining industry. He will also address efforts for Zambian mining to expand into a wider array of critical minerals including cobalt, nickel and manganese. Furthermore, Hichilema’s speech will explore the potential for collaboration between the government, industry stakeholders, and investors, highlighting the need for partnerships to drive innovation and maximise the sector's socio-economic benefits.

Just two years into Hichilema’s presidency, there have already been numerous positive developments in Zambia’s mining industry. Since 2019, Barrick’s Lumwana mine has contributed nearly US$3 billion in taxes, royalties, and local employment. In October 2023, the company made clear its support for the Zambian economy by announcing it will invest almost $2 billion to expand Lumwana and increase its annual production to an estimated 240,000 tonnes of copper. This will elevate a once unprofitable operation into one of the world’s foremost copper production facilities.

Similarly, a $100 million investment by First Quantum Minerals (FQM) has successfully brought the Enterprise Nickel Mine – Africa’s largest nickel producer – online. Meanwhile, FQM’s $1.25 billion expansion to its Kanshansi Copper Mine – announced at the Investing in African Mining Indaba 2022 – is expected to create nearly 2,000 jobs in Zambia.

Hichilema’s visionary and steadfast leadership has also encouraged new players to make their mark in Zambia. California-based Kobold Metals, which is backed by tech titans including Bill Gates and Jeff Bezos, is working to start producing copper and cobalt at its project in Zambia. The company has so far invested $150 million to accelerate its search for high-quality metal deposits located in the famous Copperbelt.

Other newcomers include Abu Dhabi’s International Resources, who in December 2023 announced a $1.1 billion investment in Mopani Copper Mines, funding the mine’s expansion plan and increasing copper production to 200,000 tons in the next three years.

President Hichilema’s leadership has galvanised not just the mining industry but also related industries that provide much needed infrastructure and support to the extractives sector. On 26 October, his government signed a memorandum of understanding with the United States and European Union to develop the Lobito Corridor and build a new Zambia-Lobito rail line. This includes a $ 250 million investment by the United States and will deliver an enormous boost to intra-regional trade, as well as stimulating growth and job creation within Zambia.

Mining Indaba 2024's theme is 'Embracing the power of positive disruption: A bold new future for African Mining'. Zambia’s re-emergence as a top investment destination of choice for mining investors demonstrates that positive disruption can deliver positive results and Mining Indaba is excited to provide opportunities to understand the country’s successes and processes for achieving this.

First Quantum agrees with Zambian firm to fast-track copper project

LUSAKA, Dec 4 (Reuters) - Canada's First Quantum Minerals (FM.TO) and a Zambian mining company have signed an agreement to fast-track the development of a copper project in Africa's second-biggest producer of the metal, the companies said on Monday.

Zambia has ambitions to triple its copper output and has reviewed its tax policy to increase mining exploration and output.

First Quantum is already a major miner in the southern African country.

ts agreement with Zambia's Mimosa Resources envisages mining at the Fishtie copper project starting from 2026, ramping up to maximum production of 30,000 metric tons of copper a year by the end of the decade, First Quantum and Mimosa Resources said in a joint statement.

First Quantum reiterated it thought the investment climate in Zambia had improved.

Mimosa Resources is expected to lead the raising of a total investment of $200 million for the project.

Mopani Copper Mines in Zambia Attract Major Interest from UAE’s IHC

Zambia’s state-owned investment vehicle ZCCM took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5bn. Since then, ZCCM have been searching for new investors and received a lot of interest.

Mopani Copper Mines is a prized national asset in Zambia, managing one of Africa’s largest copper deposits. Despite unprecedented difficulties in the past year and mismanagement by the previous government under Edgar Lungu, the mine remais an appealing asset for global investors.

This is especially the case in view of current President Hakainde Hichilema’s major efforts to revamp the Zambian economy towards prosperity, for which mining plays a major role.

Mopani Copper Mines Facility.

President Hichilema has placed specific emphasis on copper production, setting an ambitious target of producing over three million tonnes of copper nationally by 2032. His recognition of copper’s significance has played a major part in the renewed interest of external investors in Zambia, putting the country emphatically back on the map.

Copper is a crucial component in everything from power lines, to electric cars and renewable energy infrastructure. It is an essential component for lithium-ion batteries, demand for which is soaring thanks to the electric vehicle boom. Mopani is therefore a pivotal asset for technological development both globally and within Zambia.

Abu Dhabi’s International Holding Company has now emerged as the newest outfit looking to invest in Mopani, according to reports by the Financial Times. The IHC is the UAE’s largest listed company. Its bid rivals the efforts of Sibanye-Stillwater, the multi-national mining company based in South Africa.

IHC’s head office in Abu Dhabi.

Since two Chinese corporations, Zijin Mining and Norinco (a defence company), which both initially contended for the mine, recently dropped out, Sibanye-Stillwater had been the main contender. Zijin withdrew because of delays on the Zambian side of the process, while Norinco had sanctions imposed on it by the US government.

The fresh interest from IHC signals the growing influence of Middle Eastern wealth in the global mining industry as well as the increasingly diversified investment in the Zambian economy.

Barrick Gold to invest nearly $2 bln in Zambia mine to raise copper output

Barrick Gold (ABX.TO) said on Wednesday it would invest nearly $2 billion as part of a project to increase copper production at its Lumwana mine in Zambia.

The expansion is part of the company's plans to extend the life of the mine to 2060. Zambia is Africa's second-largest copper producer after its northern neighbour, the Democratic Republic of Congo.

The project aims to complete the full feasibility study by the end of 2024, bringing the expanded production forward to 2028, the company said.

Barrick had in July said it was keen to explore more copper deposits in Zambia and Congo, seeking to expand its presence on the African copperbelt.

This article originally appeared on Reuters.

Billionaire-backed KoBold Metals plans new Zambian copper mine within a decade

NAIROBI, Sept 25 (Reuters) - California-based KoBold Metals, whose backers include billionaires Bill Gates and Jeff Bezos, said it aims to start producing copper and cobalt at a project in Zambia within 10 years.

KoBold is spending about $150 million to accelerate its search for more deposits at the Mingomba project, located along the fabled African copper belt.

The additional studies will be completed in 2024, said Mfikeyi Makayi, the Zambian CEO of the Silicon Valley start-up.

"It's a very attractive project and we have said within a decade we would want Mingomba to be a producing mine," Makayi told Reuters.

KoBold uses artificial intelligence to search for copper, cobalt, nickel and lithium that the world needs for the clean energy transition and to accelerate growth in electric vehicles.

KoBold is backed by Breakthrough Energy Ventures, a climate and technology fund whose other backers include Virgin Group's Richard Branson and Bridgewater Associates' Ray Dalio.

The company's investors understand the lengthy period it takes to build the mine and that securing supplies of these metals is critical, Makayi said.

"They may not be your traditional, conventional backers, but the global need is so critical, it's basically a crisis," Makayi said. "That's why the buy-in is there, for people to be willing to be with us for the long haul, that just shows the commitment to what we are doing."

KoBold also searches for critical metals with BHP Group (BHP.AX) and Rio Tinto (RIO.L) at projects in Australia. Commodity investor EMR Capital and Zambia's ZCCM-IH (ZCCM.LZ) also own stakes in Mingomba.

The United States is looking for alternative sources of supply for critical metals and the funding from American investors has enabled KoBold to ramp up exploration, Makayi said.

KoBold wants to find more deposits as big as Mingomba in Zambia and would also explore opportunities in Botswana, Namibia and the Democratic Republic of Congo, Makayi said.

She wouldn't say if KoBold would partner with BHP and Rio Tinto to develop Mingomba. KoBold's own internal capacity could advance the mine, Makayi said, when asked if the firm would consider a joint venture.

The deposit has a defined resource of about 247 million tons of ore with an average grade of 3.64% copper, or an estimated 9 million tons of copper, according to KoBold.

"Maybe they will come in, it doesn't have to be in Zambia, it could be Namibia or Botswana. They're our partners but those discussions are yet to be had," Makayi said.

Reporting by Felix Njini; Editing by Lincoln Feast and Anil D'Silva.

This article originally appeared in Reuters.

Two years of HH has brought a wave of optimism to Zambia

Analysts anticipate that mining investors will flock to Zambia, still one of the biggest copper producers globally, especially since President Hakainde Hichilema came into office in August 2021 and announced a range of incentives, such as a sliding royalty rate for mines, to lure back investors.

Hichilema, or ‘HH’ as the investor community call him, has announced that he wants Zambia’s mining sector to be the country’s foremost revenue generator. He subsequently set a target to increase its copper production from 800,000 tons a year to three million tons a year in the next three years – a bold aim, especially since the Konkola and Mopani copper mines haven’t resumed production yet.

But overall, Zambia’s mining sector appears to be on track for renewed activity from international mining companies. In 2022, First Quantum Minerals announced $1.35bn worth of new projects in the country, while Anglo American announced a return to full-scale copper exploration after it signed a provisional joint-venture agreement with Aim-listed mining and exploration company Arc Minerals. In addition, KoBold Metals, a Californian-based metals explorer, is busy raising $200m to develop the copper reserves it recently acquired in Zambia, the Wall Street Journal reports.

The projects announced by both these miners are a sure vote of confidence in the Hichilema administration.

Exploration is an equally important aspect of Hichilema’s investment drive into Zambia’s minerals sector and the government is currently doing geological mapping for the remaining 45% of the country, while the existing 55% will be updated.

Unfortunately, Hichilema has also had to deal with numerous problems since he took over the reins from the Lungu presidency, an era in which mining companies faced insecurity of tenure, high royalty rates, and the withholding of VAT refunds.

Delivering on promises has been harder and slower than anticipated, says Marcus Courage, CEO of Africa Practice. It has involved drawn-out negotiations with creditors for debt restructuring, cleaning up the country’s cadastral system after widespread licensing corruption, restructuring Mopani, settling the Konkola disputes, and addressing the power crisis. “These things are all taking much longer than anticipated,” says Courage.

The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded – Nick von Schirnding

The administration is doing its best to clean up various practices and set the country on a new course, says Nick von Schirnding, director and executive chairperson of Arc Minerals. “But changing a supertanker takes time.”

Investor perception also takes time to change, and the dubious way in which mining and exploration licences were acquired under the Lungu presidency could still deter investors. Also, under previous presidencies, mining rights were at times taken away. “This can put investors off. Once bitten, twice shy,” said one mining executive who asked to remain anonymous.

The best thing Zambia can do for its investor community is secure a stable policy environment, even though its taxes are some of the highest in the world.

Peter Leon, partner and Africa chairperson at Herbert Smith Freehills, said the country’s debt issues have not been a significant deterrent for would-be investors, but rather its ever-changing royalty rates, which needs to be fixed.

Leon’s view is that Zambia’s mineral legislation is sound, the government is committed to good governance and the rule of law, while the country has a lot more policy certainty than South Africa.

Time is of the essence though. There is a question mark over how realistic a three million tons a year copper production target is, says Leon. He also notes that Hichilema has two years left in office and if the economy hasn’t grown as he has promised he might not be re-elected, although Zambia’s recent debt deal is just what is needed.

A rosy future?

The good news is that, after lengthy negotiations that lasted close to three years, Zambia finally secured a deal on 22 June to restructure its more than $6bn debt. In terms of the restructuring agreement, Zambia’s debt will be rearranged over more than 20 years with a three-year grace period during which only payments on interest are due, Reuters reports. The agreement with its official creditors means the country will receive a $188 million loan from the International Monetary Fund as part of a $1.3bn package that was approved in August 2022.

There are also indications that the long-standing issues with Konkola and Mopani respectively will be resolved by the end of 2023. An insider close to the process said an agreement between Vedanta and Zambia Consolidated Copper Mines, which is 77%-government-owned, is imminent on Konkola. “In government we’re saying: ‘You can’t mine in the courts.’ You have to be pragmatic. The negotiations have been difficult, but the intention is to reach an agreement by the end of the year.”

Konkola currently produces less than 100,000 tons of copper a year, because of a lack of investment. But once a deal has been concluded, the Konkola Deep Mining Project, which has a nameplate capacity of 300,000 tons a year, can be initiated.

With Mopani the process is less complicated, and the Zambian government is currently in possession of bids from four shortlisted potential buyers: China’s Zijin Mining and Norinco Group, Sibanye- Stillwater, and an investment vehicle owned by former Glencore employees. A final bid will take place in mid-July and a deal is expected to be in place in October this year. Mopani’s production is currently around 80,000 tons a year – a far cry from its potential 225,000 tons.

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction. So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region — Desmond Mossop, SRK.

Both Konkola and Mopani are in the fortunate position that they’re not resource-constrained and with more investment, production could be ramped up.

With the clean-up of Zambia’s mining cadastral portal completed, the country is well-positioned to attract new investment, says Courage. “The queues outside the cadastre office stretched around the block.”

“We have seen similar moves in Botswana and Namibia towards transparency through a public mining cadastre — and even some movement in South Africa in this direction,” says SRK Consulting partner Desmond Mossop. “So Zambia’s success in rolling out this facility certainly seems to be having a positive effect across the region.”

Von Schirnding says he is thoroughly impressed with the speed with which the Zambian government is turning things around. “The mining cadastre was subject to a detailed audit over eight months. They went through every single major licence with a fine toothcomb and threw out those that hadn’t been properly awarded. They replaced almost the entire staff complement of that office. It’s real proof that there’s a desire to change.”

Zambia and the DRC’s plans for collaboration on electric vehicle battery production are also gaining momentum, with the US and Afreximbank “waiting in the wings” to provide concessional funding. Feasibility studies are being conducted to establish two special economic zones for battery manufacturing purposes, Courage adds.

“Many of the world’s largest mining companies like what they hear from Hichilema. They see a government that understands the needs of investors. The president recognises the opportunity to capitalise on the surging demand for copper,” says Courage.

Hichilema is a breath of fresh air, says Von Schirnding. “The government is being very sensible and proactive. When you operate in any jurisdiction you need an established mining framework which governs the awarding of licences and mining regulations. The second thing is you need the rule of law that will enforce those regulations. Those are the key building blocks when entering into any country.”

This article originally appeared on Mining MX.

Sibanye-Stillwater saddles up with Chinese in bid for Mopani Copper

SIBANYE-Stillwater CEO Neal Froneman said he rated his firm’s chances of bidding successfully for Zambia’s Mopani Copper after jointly submitting an offer with a “substantial Chinese copper company”.

“I do think we can involve eastern partners and help resolve a conflict Zambia is dealing with between east and west,” said Froneman in an interview. “Zambia did not request it.”

A decision from Mopani’s current owner, the state-owned ZCCM-IH, was about “two to three weeks away” after which the successful bidder would begin negotiations on a long-term fiscal regime, royalties and a stability agreement, said Froneman.

“One competitive edge is that we can be a bridge between east and west,” said Froneman. “China has spent a lot of money in Zambia and it would be difficult for the government to exclude them. That was one consideration,” he said.

“The other is that we have knowledge of deep-level, labour-intensive mining, and work with communities that are centered around a mine. It is completely different type of community to, say, in the US.”

Bidding has been whittled down from about four or five companies to Sibanye-Stillwater and its partner, and China’s Zijin Mining, he said.

Froneman said that if the bid was successful the partners would embark on a capital reinvestment programme of the asset. But shareholders should not expect ” a large, upfront capital outlay”.

Froneman also raised the prospect of investing in other assets in Africa without sacrificing the company’s strategic intention of diversifying its political risk. “Africa has critical minerals and is under-explored. Not all of Africa fits the bill but Zambia and Botswana do have good perceptions,” he said.

Commenting on merger and acquisition activity broadly, Froneman said the company preferred to invest at the asset level where it didn’t “get sucked into a competitive bidding process”.

Froneman earlier presented Sibanye-Stillwater’s interim results for the six months ended June 30 in which platinum group metal and nickel production declines combined with heavy PGM price declines resulted in a 36% decline in profit to R7.8bn.

However, the company announced it would pay a 53 South African cents per share interim dividend, equal to 35% of normalised earnings – the upper end of its dividend policy. Despite this, Froneman said the company’s board would revisit the dividend policy when it met to decide the final payout for the 2023 financial year.

“We pride ourselves on paying an industry-leading dividend but 3% is not industry leading,” he said of the interim payout. “We can pay out 50% of normalised earnings but the board has to meet to decide it,” he said.

This article originally appeared on Miningmx

Britain agrees deals on clean energy, critical minerals with Zambia

LONDON, Aug 3 (Reuters) - Britain on Thursday said it had agreed deals with Zambia on clean energy and critical minerals as foreign minister James Cleverly ends a four-day visit to Africa to deepen ties.

Cleverly has used the trip, which fell shortly after a coup in Niger, to seek to enhance Britain's sway in Africa, welcoming regional talks on the Niger crisis and announcing support for Nigeria's agriculture sector.

The foreign ministry said Cleverly would agree a UK-Zambia Green Growth Compact, aimed at generating 2.5 billion pounds ($3.17 billion) of British private sector investment in Zambia's mining, minerals and renewable energy sectors alongside 500 million pounds of government-backed investments.

"The UK-Zambia Green Growth Compact and our landmark agreement on critical minerals will support investment between UK and Zambian business, creating jobs in both countries," Cleverly said.

Zambia is a major copper producer, and also has deposits of critical minerals such as cobalt, manganese and nickel. Last year Britain emphasised the importance of diversifying its supply chains in a critical mineral strategy.

Cleverly will visit a copper mine in Zambia and sign a memorandum of understanding (MoU) on critical minerals, which Britain said would "lay the foundation for further UK support for the responsible mining of copper, cobalt and other metals essential to the global clean energy transition."

Britain has agreed to deepen collaboration on critical minerals with other countries such as the United States, Japan, Australia, Kazakhstan and Saudi Arabia.

This article originally appeared on Reuters

Zambia state firm says Zijin, Sibanye interested in copper mine

LONDON, June 26 (Reuters) - Zambia's state-owned ZCCM Investment Holdings (ZCCM.LZ) confirmed on Monday that China's Zijin Mining (601899.SS) and Sibanye Stillwater (SSWJ.J) are among investors short-listed to buy Mopani Copper Mines.

The list includes those companies, China's Norinco Group and an investment vehicle owned by ex-Glencore officials, Reuters reported June 20, citing sources.

The search for a new investor for Mopani is likely to be concluded within the next two months, ZCCM-IH CEO Ndoba Vibetti told Reuters at a mining conference in London. The mine would require at least $1 billion in funding over the next five to six years, Vibetti said.

Attracting a new investor at Mopani is part of the government's plan to triple copper output in Africa's second-largest producer over the next decade.

The Mopani mine and smelter complex currently requires around $200 million to $300 million of short-term funding to make it sustainable, Vibetti said, adding that it has taken a long time to find a new investor because they needed a suitable company to takeover Mopani.

"Part of the reason that has taken so long is to get that packaging right," Vibetti said. "Somebody who can come, bring it out of water and then be able to invest for the long term."

Switzerland-based commodities giant Glencore (GLEN.L) sold a 73% stake in Mopani to ZCCM-IH in 2021 for $1.5 billion in a deal funded by debt, but it retained offtake rights to Mopani's copper production until the debt had been repaid in full.

This article originally appeared on Reuters

Four firms shortlisted in race to buy Zambia's Mopani Copper Mines - sources

June 19 (Reuters) - China's Zijin Mining (601899.SS) and Norinco Group, South Africa's Sibanye Stillwater (SSWJ.J) and an investment vehicle owned by ex-Glencore officials have been shortlisted in the race to buy Zambia's Mopani Copper Mines, two sources with knowledge of the matter told Reuters.

Zambia's mines minister Paul Kabuswe said in February there were 10 suitors for the mine and smelter complex that is owned by state firm ZCCM-IH.

Rothschild & Co, hired last year to find investors for Mopani, has whittled down the list to four, the sources said.

Switzerland-based commodities giant Glencore (GLEN.L) sold a 73% stake in Mopani to ZCCM-IH in 2021 for $1.5 billion in a deal funded by debt, but retained offtake rights of Mopani's copper production until the debt had been repaid in full.

One of the sources said the investors, who conducted due diligence and submitted non-binding offers in May, are now completing all the work required before making binding offers, with Sibanye, Zijin and Norinco the three strong contenders.

The source added that an investor is expected to be selected before the end of July, and that separate proposals have also been made to Glencore, which is still owed money.

Glencore also made further loan advances to Mopani in 2022.

Reuters was not able to establish the value of the deal.

A spokesperson for Glencore declined to comment. Zijin also declined to comment, while Norinco and ZCCM-IH did not immediately respond to emailed questions.

Sibanye CEO Neal Froneman, who is seeking to expand in copper as part of the company's push into green metals, confirmed the company had submitted a proposal to acquire Mopani.

"We are willing to invest, we are willing to be there for the long term," Froneman told Reuters in an interview.

Froneman said the copper mine, which could potentially produce about 225,000 tonnes of copper annually, required considerable investment, but that the available deposits made Mopani a good asset to own.

"It's a wonderful orebody, and a good mine starts with a good orebody and good people," Froneman said.

Zambia's President Hakainde Hichilema is seeking to attract new investors in Africa's second-largest copper producer, and wants to triple output of the metal that is key to products from power lines and industrial machinery to electric vehicles.

HH Opens Mimbula Mine

By Brian Mwale
ZNBC News

President HAKAINDE HICHILEMA has commissioned Mimbula Copper Mine in Chingola with a call to residents to safeguard the mine.

President HICHILEMA says the nine which has created 900 jobs is key to revenue generation, job creation and stabilizing the kwacha.

The President also urged workers to resort to dialogue when faced with grievances instead of taking to the streets.

Speaking during the Launch this afternoon, President HICHILEMA praised management of Mimbula which is owned by British Company Moxico Investments to ensure they look after workers.

He also encouraged foreign investors to partner with locals and work with local suppliers.

The President further noted that Mimbula’s planned expansion plan to increase production from the current 10-thousand tonnes to 56-thousand tones is key for national development.

He said the company’s expansion plan of extending to 56-thousand metric tonnes production from the current 10-thousand is key for development of surrounding communities.

President HICHILEMA said his job is to improve the country through hard work and investments such as Mimbula which has created Nine hundred jobs.

And, Mines Minister PAUL KABUSWE said Zambians are now able to experience peace and see development under the UPND.

He said Zambia’s economy has for the past 10 years been faced with challenges including the mining sector which are now being resolved.

Mr. KABUSWE urged all mining investors to be serious with their investments because government is in a hurry to develop the country.

Meanwhile, British High Commissioner to Zambia NICHOLAS WOOLLEY expressed delight with the strides made by the mine so far.

Mr. WOOLLEY said Moxico will invest a further One hundred million dollars bringing the firm’s cumulative investment to 180-million dollars.

He said Zambia has attracted significant investments from Britain with over 1-billion pounds by that country’s companies in green investments.

The British Envoy noted that the progress made at Mimbula is owing to close ties between government and the British government.

And, Chingola Member of Parliament CHIPOKA MULENGA said the mine has come with a speed of light implementing various projects and created decent jobs beyond Chingola.

He however asked Mimbula Minerals to give priority to Chingola residents when employing before looking elsewhere.

Mr. MULENGA said prioritizing locals for skills will promote ownership.

MEANWHILE, Mine Workers Union of Zambia -MUZ- President, JOSEPH CHEWE said Mimbula has given workers in Chingola an opportunity to work.

Mr. CHEWE said the workers are geared to put in their best but called for engagement of all workers decent jobs and salaries that will push them to work hard and look after their families.

And Mimbula Chief Executive Officer, ALLAN DAVIES said the company has already engaged about 9-hundred employees within 14 months of operations.

He thanked government for its continued support to the mine saying the firm now plans expansion in its operations at a new site.

This article originally appeared on ZNBC

Zambia's mining minister expects Mopani Copper Mines deal by end-March

CAPE TOWN, Feb 6 (Reuters) - Mopani Copper Mines will secure a new investor by the end of this quarter, Zambia's mines minister Paul Kabuswe said on Monday, calling the complex owned by state mining investment firm ZCCM-IH a "critical asset" for the country's copperbelt.

There are 10 suitors for the mine and smelter complex, including South Africa-listed mining firm Sibanye-Stillwater and "one or two" Chinese mining firms, Kabuswe said in an interview on the sidelines of the Mining Indaba in Cape Town.

Sibanye CEO Neal Froneman in October told Reuters the company was interested in Mopani.

"There is interest from all over, including the Arab world," Kabuswe said, declining to name any of the other interested parties.

Asked about the competition for African metals and minerals pitting the United States and Europe against China, Kabuswe said Zambia did not differentiate between investors provided they brought value into the country.

"We are dealing with the Arab world, we are dealing with the U.S., we are dealing with China, we are not biased towards anyone," Kabuswe said. "We are friendly to everybody."

Zambia is also aiming for an agreement with Konkola Copper Mines owner Vedanta Resources by the end of the first quarter, Kabuswe said. Zambia last year decided to seek an out-of-court settlement with Vedanta after a lengthy dispute over KCM.

Increasing Zambia's copper production is necessary to reduce the country's debt burden, Kabuswe said, as growth in the mining industry will trigger investment in infrastructure and other sectors.

Zambia has set a goal of increasing copper production to 3 million tonnes a year by 2032. The country is struggling to cut debt after becoming the continent's first COVID-era default in 2020.

Zambia’s Role in the Green Energy Transition

Zambia is well positioned to provide the world with the minerals it needs to transition to renewable energy.

With its significant reserves of copper and cobalt, metals that are fundamental to the transition away from fossil fuel reliance, it has the potential to provide global supply chains with crucial components for years to come.

These minerals are used not only in wind and solar powered technology, but are also fundamental to the production of batteries used in electric vehicle production.

 Transitioning to electric vehicles and increased energy supply via renewable sources is fundamental to the shared global commitment to keep global warming below 1.5 degrees. In the words of the United Nation’s Net Zero Coalition “replacing polluting coal, gas and oil-fired power with energy from renewable sources, such as wind or solar, would dramatically reduce carbon emissions.”

Consequently, according to the International Energy Agency, Copper demand is expected to three times its current level by 2040, while cobalt demand is expected to rise more than twenty times.

Zambia accounts for 6% of the world’s copper reserves. It produces 850,000 tonnes of copper annually, making it the world’s 7th largest producer but with government focus and foreign investment this is expected to rise significantly. 

Canadian firm First Quantum Minerals (FQM) have committed to a $1.25 billion dollar investment into the Kansanshi copper mine as a reflection of their “renewed confidence” in Zambia’s investment climate. The investment is designed to expand the mine and seize the opportunity rising international demand presents.  

President Hichilema is keen to see Zambia meet the global rising demand in order to spur economic growth. A key part of the UPND’s growth strategy, designed to steer the country into a period of middle income prosperity following the instability of the Lungu years, is the commitment to increase copper production more than three times over.  

By 2030, it is hoped Zambia will produce 3 million tonnes of copper a year – that represents an impressive 352% increase in production on a commodity that already accounts for 80% of the country’s export earnings. 

Copper is critical for solar PV, wind, hydro, electric vehicles and national electricity grids, there are few metals more fundamental to a green transition. Zambia is placed in an extraordinary position to spur its own economic take-off and to foster a status as a crucial player in the fight against climate change.

This is why during December’s US Africa leaders’ summit, held in Washington, D.C. leaders from Zambia, the Democratic Republic of Congo, and the US signed a memorandum of understanding to develop an electric vehicles battery chain.

It is also why US-based firm KoBold Metals have announced a $150 million development into the Mingomba copper-cobalt mine in the country. The Bill Gates backed startup aims to use artificial intelligence to create a map of the Earth’s crust, identifying areas with the highest concentration of cobalt and copper deposits in order to locate minerals overlooked by traditional exploration as the earth’s most accessible minerals have increasingly already been mined. The company’s CEO is absolute: he does not see KoBold as a mining operator but a leader in the “electric vehicle revolution.”

Because copper is a highly efficient conductor, it is used in electric cabling and its efficiency reduces wastage. It is also one of few materials that can be used again and again without a loss in performance. Copper plays an important role in making energy production as efficient as possible with minimal impact on the environment.

Traditionally, Zambian government have sought to extract the greatest possible tax value from the mining industry. However, the New Dawn government have reduced the tax payable on new mines in order to encourage further exploration, induce investment, and create the greatest possible economic gain for the entire Zambian economy, not just the government’s coffers.

In this new climate, mining giant Barrick Gold has recently announced record yields from its Lumwana copper mine. Crucially for Zambia’s future, the company’s presence in the country has benefits beyond corporate and treasury income. Barrick Gold employ more than 4,000 people in the country, 99.3% of those are Zambian nations benefitting from the firm’s employment. It has been estimated that when royalties, taxes and local employment are combined, the firm have contributed $8.2 billion to the country’s economy.

In the past, Zambia has not taken full advantage during copper booms. From 2003 to 2006 the price of copper tripled, Zambia’s economic growth rate also grew, but poverty and income inequality remained unaffected.

Without integrating the benefits of foreign investment into the broader economy, Zambia could once again fail to capitalise on the opportunities presented by its extraordinary natural resources. By encouraging foreign firms to employ Zambia workers in the mine, in catering, housing, security, and to executive positions within local structures.

As optimism grows that Zambia can play a leading role in a transformed world, there is hope that President Hichilema can create meaningful change for Zambians.

KoBold Metals: The Mining Exploration Firm Using AI To Lead The Electrical Revolution

Last week it was announced that US-based mining exploration firm KoBold Metals would be investing $150 million to develop the Mingomba copper-cobalt mine in Zambia.

The new deal is a joint venture between private equity firm EMR Capital and Zambia’s state-backed ZCCM Investment Holdings (ZCCM-IH) and is set to close within the first quarter of 2023.

KoBold Metals is a start-up firm which uses artificial intelligence (AI) and machine learning to coordinate mining for metal deposits used in making electric car batteries. The company, which began its mining operations in Canada two years ago, aims to create a “Google Map”  equivalent of the Earth’s crust, highlighting areas which have high levels of cobalt and copper deposits. 

This ‘mapping’ is done by collecting and analysing streams of data of both new and old deposits. The company then uses algorithms to determine where new deposits may be found. As a result, KoBold is better equipped to locate minerals that may have been overlooked by more traditional methods of exploration.

Despite being such a young company, Kobold already has an impressive portfolio, having acquired multiple exploration sites in Quebec, Saskatchewan, Ontario, and Western Australia.

The start-up also has an impressive lineup of stakeholders and investors. These include Australian multinational mining company BHP and support from climate and technology innovators Breakthrough Energy Ventures. 

Founded by Bill Gates in 2015, Breakthrough is an umbrella company for a range of organisations that aim to accelerate the innovation of sustainable energy sources to mitigate the effects of climate change. The company is also backed by Amazon’s Jeff Bezos and Virgin’s Richard Branson. 

Kobold’s chief executive officer, Kurt House, who has been working with the company for over five years, has previously stated that he does not want to be considered a mining operator “ever,” and that the company root itself in leading the way for the “electric vehicle revolution.”

The new Zambia-based project is a major step forward for both the company and the country. Firstly, it will place President Hakainde Hichilema on good footing to achieve his ambitious copper production target of 3 million tonnes a year by 2032. 

Secondly, the Mingomba mine presents a major opportunity to KoBold. The company previously said that the mine is set to be "one of the world's top-tier mines.” They also found that it contains an estimated 247 million tonnes of ore with an average grade of 3.64% copper. That is six times purer than similar deposits found in Chile.

This high quality mine will not only generate more tax revenue for the government but also provide jobs for many Zambians. It will also support Zambian-run businesses within the mine’s value chain in everything from machinery to transportation. 

Furthermore, as global consumers make changes towards more climate-friendly options demand for electric vehicles will continue to grow. It is estimated that the global copper industry will need upwards of $100 billion to meet the infrastructure requirements to meet with this demand. With Zambia being the second largest copper producer in Africa, this deal solidifies the key role that the country will play in the green economy going forward. 

Photo: Khusen Rustamov from Pixabay.

Barrick Gold Digs Deeper With Government Support

Mining giant Barrick Gold Corporation has recently announced record yields from its Lumwana copper mine thanks to a combination of the New Dawn government’s favourable business policies and strategic reinvestments made by the company to improve infrastructure at the mine, which is located 100 km west of Solwezi in the heart of Zambia’s Copperbelt.

Barrick Gold’s Lumwana Copper Mine. Source: Bloomberg.

Barrick Gold is now one of Zambia’s largest copper producers, employing more than 4,400 people, 99.3% of whom are Zambian nationals.

The company, which has invested more than $8.2 billion into the Zambian economy in the form royalties, taxes and local employment since 2011, has said it is looking to continue growing its Zambian operations.

Earlier this year CEO Mark Bristow described the mine as a “real success”; demonstrated last month when the company announced that copper production had climbed to roughly 334,000 tonnes since the start of the year - more than double the amount it produced in 2010.

The Lumwana mine was initially purchased in 2011, although Barrick considered selling it following a merger with Randgold Resources in 2019. Discussions fell through, however, and the mine was kept in the hands of the company.

Following the election of President Hakainde Hichilema and the New Dawn government, new business-friendly policies meant that the mine was able to ramp up production and now contributes 20% of Barrick Gold’s annual earnings.

Such policies include those which were announced in the 2023 Budget. Specifically, Mr Bristow expressed his contentment with the new mineral royalty tax regime, which is set to come into effect in January 2023.

The new mineral royalty tax regime, which is based on the price of copper, has been restructured to tax only the incremental value in price at different thresholds, as opposed to the aggregate value. The government will also allow miners to deduct royalties from income taxes which will resolve the issue of miners being taxed twice. This had previously been an issue as miners were taxed both on their incomes and through the royalty regime. Additionally, these changes will also smooth out the impact of price fluctuations in the market.

This economic stability in tax will ensure confidence in the market as well as encourage more cash flow back into the economy through reinvestments, something Barrick Gold have said will prove vital as they scale up production.

Workers at the Lumwana Copper Mine. Source: Barrick Gold.

Mr Bristow explained that the changes in mineral royalty tax will unlock more cash flow for the company that could be used as reinvestments into the mine.

Additionally, the New Dawn administration has reduced the property tax transfer on exploration rights. The tax has been reduced to 7.5% - 2.5% lower than the previous rate.

Earlier this month, during a media briefing at the mine, Mr Bristow described how Lumwana is more profitable than ever and is generating even higher yields, making it one of Zambia’s largest copper producers.

He also outlined plans to expand the mine by creating a ‘super pit’, stating that, “Promising drill results at the Lubwe satellite target are increasing our confidence that we will be able to develop a super pit and still keep producing at today’s rates and more.”

Further, he said, “Should the super pit prove viable, it will substantially extend the mine’s life with a two-year pre-feasibility study scheduled to commence in 2023.”

The new pit’s potential profitability has led to reports that Barrick could extend its operations at Lumwana from 2042 to 2060.

Aside from the high yields, Mr Bristow outlined that favorable business policies have also encouraged the firm to invest in Zambia. The CEO has repeatedly said that stable governance and pro-investment policies have been some of the key aspects that persuaded Barrick Gold to continue its operations in Zambia and to reinvest their earnings.

Mr Bristow stated that the New Dawn government is like, “a breath of fresh air.”

Zambia is set to become a hub for global mining investment. It is the 7th largest copper producer in the world, producing roughly 88,000 metric tonnes of the metal a year. It is also home to some of the highest grade copper mines in the world, making it a particularly attractive area for exploration and investment. On top of this, the country is home to substantial nickel, cobalt, and manganese deposits. Outside of metals the country also produces 20% of the world’s emeralds.

Thinking of investing in Zambia’s mining industry? Sign up for our investor briefing or get in touch at info@zambiaisback.com

President Hichilema Opens New Zambian-Owned Mine In Luapula

Yesterday, President Hakainde Hichilema opened the Luongo Musamu Manganese mine in Mutipula chiefdom of Chipili District in Luapula Province.

During the opening, President Hichilema said the mine represented another key investment into Zambia and had full government support.

The new mine houses over 40 million tonnes of manganese ore with production at the mine set to last the next 20 years.

The mine is Zambian owned and represents a key investment in the Zambian mining economy.

Musamu Resources developed the mine under the leadership of Sixtus Mulenga, the executive chairman of the company.

One of the key uses for manganese is in car batteries, something the New Dawn government has been supporting since it identified it as a key sector for development earlier this year.

Dr Mulenga also said that the company would continue to invest $20 million in the mine to meet its production target of 1 million tonnes of manganese annually.

He also stated that the mine will offer ample employment opportunities, having already employed 250 people, the mine will increase this to 1000 when it reaches its full capacity in five years’ time.

Paul Kabuswe, Mines and Minerals Development Minister, also praised the President stating that through his pro-investment stance he has unlocked more potential in the private sector.

Zambia’s Target to Increase Copper Production to 3 Million Tonnes in the Next Ten Years is Attainable

Lusaka Times, November 2, 2022

President Hakainde Hichilema has said Zambia’s ambitious target to increase copper production from the current 830,000 metric tonnes to 3,000,000 in the next ten years is attainable.

In a speech read for him by Mines and Minerals Development Minister Paul Kabuswe during the opening of the 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) at Garden Court Hotel in Kitwe on Tuesday morning, President Hichilema said Government is committed to meeting the ambitious yet achievable target.

The Head of State said the New Dawn government is creating an attractive and competitive investment climate built on transparency, consistency, predictability and fairness while acting against corruption.

Mr Hichilema said the government has put in place favorable and predictable policies for investors to thrive and bring stability in the mining sector.

He charged that the mining sector was stagnant in the previous years because of what he termed as fights between the past government and the investors.

President Hichilema said time is right for Zambia to continue mining and ensure a win-win situation for the treasury, the investors and the community.

“I wish to reiterate our government commitment to reviving the Zambian economy anchored significantly by a robust mining sector that is amply supported by a vigilante energy sector. In marking over a year in office, our government continues to pursue a bold vision to usher in a new dawn for Zambia’s mining sector and indeed the rest of the economy including the essential energy sector. We are determined to deliver on our country’s mining and energy potential through a harmonised approach that optimally serves all stakeholders, Zambians and investors included. Premised on tenets of resilience and stability, will foster industrial development, create employment and grow national fiscal inflows for the equitable benefit of all,” Mr. Hichilema said.

“As a leading player in the global copper mining industry, we are striving to grow mineral output through new mines and expansion of existing ones in order to meet current as well as projected future demand growth. In this effort, I wish to implore all of you and emphasise our steadfast commitment to meeting the ambitious yet achievable goal of raising annual copper production levels from the current 830 metric tonnes to 3,000,000 metric tonnes in the next decade.We are creating an attractive and competitive investment climate built on transparency, consistency, predictability and fairness while acting against corruption in all its forms,” he said.

President Hichilema further appealed to investors to support local suppliers and contractors and work towards improving the communities hosting mining operations.

“Let me categorically state that investors in Zambia are assured of the rule of law guaranteeing security of tenure and investments. To this effect for example, good governance in the administration of mineral rights is being strengthened. A moratorium on the issuance of mining rights was affected while a systems audit was undertaken. We will soon launch the online payment portal that will enhance efficiency and integrity in the administration of the mining rights. We espouse collaboration and partnership as opposed to reducing nationalism. In this regard, Zambia welcomes investment that promotes local economic empowerment by allowing our people to participate meaningfully across the value chain. This reinforces the stability of your investments and fosters wide spread acceptance among our people. In the spirit of strategic engagement and partnership, Zambia recently signed a memorandum of understanding with the government of the Democratic Republic of Congo that will see two countries work closely to develop electric batteries and clean energy value chains,” he said.

Meanwhile Kitwe and District Chamber of Commerce President Emmanuel Mbambiko appealed to the government to bring sanity at Mopani Copper Mines and Konkola Copper Mines.

Mr. Mbambiko, a UPND official, said the business community in Kitwe district is affected by the dormant mine operations at KCM and Mopani.

Zambia Chamber of Mines of Zambia President Godwin Beene said the three-day conference which has attracted 300 delegates will entice investors to invest in the mining sector and help improve infrastructure, promote skills and develop communities.

Ministry of Energy Director in charge of Electricity Michael Mulasikwanda highlighted some of the plans the ministry is undertaking to grow the Energy Sector.

The 10th Zambia International Mining, Energy Conference and Exhibition (ZIMEC) that will run up to 3rd November 2022 is being held under the theme: ”The Synergy between Mining and Energy, Developing sufficient sustainable energy to satisfy Zambia’s mineral production goals.”

Barrick CEO Says Zambia’s Lumwana Mine Life Could Be Extended to 2060

Mining.com, October 26, 2022

Barrick Gold Corp said promising drill results could see the life of its Zambian Lumwana copper mine extended to 2060 from 2042, its Chief Executive Officer Mark Bristow said on Wednesday.

Speaking at a media briefing at the mine, Bristow said since 2019 Lumwana’s fortunes had been turned around, making it one of Zambia’s largest copper producers.

He said a new mineral royalty tax regime, which is scheduled to come into effect in January next year, would unlock additional free cash flow for the company.

To attract investment and ensure increased production, Zambia’s government has planned to restructure the mineral royalty tax with regard to copper.

Zambia earns 70% of its export earnings from mining and has pledged to review its mining tax policy and increase exploration to boost and diversify production.

Asked if Barrick, one of southern African nation’s largest copper producers – and the world’s second-biggest gold miner – had an interest in investing in Zambia’s Mopani Copper Mines, Bristow said the miner was open to opportunities.

“We will look at all opportunities that come our way,” he said.

Zambia is looking for an outside investor to reinvigorate Mopani Copper Mines, which needs a big cash injection to ramp up production.

Mopani, a large mine and smelter complex, is looking for new investors after Glencore sold the asset to state mining investment company ZCCM-IH in January last year.

ZCCM-IH hired Rothschild in June to help find a new investor to upgrade and expand it.

Mopani, which is more than 90 years old, has the potential to produce 225,000 tonnes of copper annually, nearly three times its expected 2022 production, but it needs investment of at least $300 million to fund a complicated underground expansion.