Glencore strikes $960-mn copper, cobalt deal in Congo

Anglo-Swiss multinational commodity trading giant Glencore Plc yesterday struck a deal to buy the remaining 31-per cent stake in the Mutanda mine and 10.25-per cent stake in Katanga Mining Ltd from resource group Fleurette Properties Ltd for a total of $960 million.

The deal comes two months after Glencore, led by its CEO Ivan Glasenberg, teamed up with Qatar's sovereign wealth fund to buy a 19.5-per cent stake in Russian oil giant Rosneft, in a deal worth $11 billion.

Glencore is paying Fleurette, owned by Israeli mining tycoon Dan Gertler, $922 million for the 31-per cent stake in the Mutanda mine and $38 million for Katanga.

Glencore said that it will set-off against the cash consideration payable to Fleurette, loans of $556 million including $120 million accrued interest owed to the Glencore group by Fleurette and its affiliates, which are secured by the Mutanda Shares.

In addition, Glencore has acquired $130 million shareholder loans owed to the Fleurette group by Mutanda Mining Sarl and the aggregate cash consideration payable by the Glencore in respect of the transactions is $534 million.

Glencore has also acquired a further 15,325,000 shares or 0.8 per cent stake in Katanga, which were held as the security for a loan provided to Fleurette's subsidiary Ruwenzori Ltd.

Post closing, Glencore will fully own the Mutanda mine and approximately 86.33 per cent of Katanga.

Located in the Democratic Republic of Congo, Mutanda is a high grade copper and cobalt producer, with an annual production rate of above 200 ktpa of copper and 24 ktpa of cobalt.

Mutanda also has installed capacity to produce 390 tonnes per day of sulfuric acid and 73 tonnes per day of sulfur dioxide, for use in the hydrometallurgical complex.

Katanga operates a major mine complex producing refined copper and cobalt. The company has the potential to become Africa's largest copper producer and the world's largest cobalt producer.