GOVT NEEDS $300M FOR MOPANI MINE PROJECTS

BUUMBA CHIMBULU writes @SunZambian GOVERNMENT needs US$300 million to complete the on-going projects at Mopani Copper Mines, as it relies on productivity to repay the loan owed to Glencore. About a week ago, Glencore agreed the sale off its majority stake in Mopani Copper Mines to Zambia’s mining investment arm ZCCM-IH in a US$1.5 billion deal. ZCCM-IH already holds the remaining 10 percent stake in Mopani. The projects that were done that are supposed to facilitate ramping up of production at the mine to 150, 000 tonnes per annum are still incomplete, says Ministry of Mines Permanent Secretary, Barnaby Mulenga. Mr Mulenga said during the ZNBC Sunday Interview programme that the shortfall therefore to finish those projects was estimated at about US$300 million. He however said Mopani Copper mine in its current state was still viable and able to produce enough commodities for revenue generation. Mr Mulenga said the mine had in excess of 200 million tonnes of copper at almost two percent and that the measured resource was over US$18 billion. He said it was for this reason that Government would rely on production to repay the US$1.5 billion owed to Glencore after it sold its shares to ZCCM-IH about a week ago. “In terms of how the loan will be repaid, it will be repaid through production, roughly what this means is that if in a given period 10 tonnes of copper cathode is produced by Mopani, one tonne of copper cathode will be used to pay for the loan,” Mr Mulenga said. Mr Mulenga said in a case scenario, the business would be financed through equity or debt. He, however, clarified that Government had not yet identified an equity partner but quickly mentioned that many stakeholders had expressed interest in the partnership. “When you are running a business, there are different ways you can finance it and in this particular case the US$1.5 billion, are there risks that the business may fail to pay. The analyst has shown that the business is able to pay. “But let us think of the worst case scenario, a business can be financed by debt or equity where some people they might be willing to extend a loan to Mopani as a business based on the figures to proceed and pay off the debt,” Mr Mulenga said.