By NATION REPORTER
Mopani has dispelled assertions that Glencore, its former owners, had pumped in money to help the mine cover expenses.
According to company executives, Glencore is not supporting Mopani Copper Mines.
When contacted to explain how Glencore had come to its rescue, the mining giant refuted the allegations and referred to its Chief Executive Officer Charles Sakanya’s earlier remarks on the matter.
Mr Sakanya dispelled a report by Reuters that the Mining and commodity trading giant Glencore had given loans covering some of Mopani’s costs.
Mr Sakanya acknowledged that Mopani owed some money and could not say how much the figure was because it was constantly kept changing.
“We had to renegotiate agreements with suppliers, copper concentrate purchase contracts, letters of credit and overdrafts after the change in ownership. Those negotiations, along with a breakdown at the north shaft in March, resulted in delayed payments,” he said.
The Mine needs US$300 million investment to expand, boost production Copper production expected to fall 8% this year
According to media reports, Glencore which sold Mopani to state mining investment firm ZCCM-IH (ZCCM.LZ), has since helped cover some of Mopani’s running costs, including power bills and purchases of copper concentrate from third parties.
According to reports, Glencore had provided letters of credit to Mopani on two or three occasions when the company did not have enough cash to buy copper concentrate, effectively guaranteeing Mopani’s purchase .
Government on the other hand reached a staff-level agreement with the IMF on a $1.4 billion extended credit facility in December, but the money cannot flow until Lusaka and its creditors agree on reducing the debt to sustainable levels.
Glencore decided in April 2020 to put Mopani on care and maintenance, drawing the ire of the Zambian government which wanted it to stay open, and later in 2020 wrote down the value of the mine by $1.041 billion to $861 million. Glencore said it had invested $4.4 billion in Mopani since 2000.