April 19, 2020 / 6:16 PM / 2 months ago

Zambian official says Glencore reverses plan to shutter copper mines

LUSAKA (Reuters) - Glencore told the Zambian government this week that it wants to keep operating its Zambian copper mining subsidiary Mopani Copper Mines (MCM), not shutter the operations, mines ministry permanent secretary Barnaby Mulenga said on Sunday.

FILE PHOTO: The logo of commodities trader Glencore is pictured in front of the company's headquarters in the Swiss town of Baar November 20, 2012. REUTERS/Arnd Wiegmann

Glencore’s decision to put MCM under “care and maintenance” sparked a backlash from Zambia’s government, which threatened to revoke the firm’s mining licences because it said Glencore did not give enough notice before suspending the mines.

“The government wants to see a win-win situation and respects investors but we need to protect the interests of Zambians,” Mulenga told Reuters in a telephone interview.

Zambia’s ministers of mines, finance, home affairs, and labour, will hold a video conference with Glencore on Monday to discuss the issue, Mulenga said. “We expect to make a lot of progress in this meeting,” he added.

A Glencore spokesman declined to comment on whether the company wanted to keep MCM open, and referred Reuters to an earlier statement.

“Following Mopani’s recent announcement regarding the transition of its mining operations to care and maintenance, Glencore is currently in discussions on the way forward with the Government of Zambia,” Glencore said in Tuesday’s statement.

MCM, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm ZCCM-IH.

CHINA DEBT TALKS

Finance Minister Bwalya Ng’andu also denied a report MCM and other Zambian mines might be bargaining chips in ongoing debt negotiations with China.

A Wall Street Journal report on Friday said, citing Zambian officials, that the government was considering giving China mining assets including Mopani as collateral in exchange for deferral or forgiveness of its sizeable debt.

Zambia’s external debt stood at $11.2 billion by end-June 2019, the finance minister said in March, with about a third of that foreign debt owed to China.

Asked about the Wall Street Journal report, Ng’andu told Reuters: “I have no discussions with China regarding the exchange of assets for debt. The discussions with China on debt restructuring have nothing to do with surrender of assets.”

Glencore declined to comment.

Reporting by Chris Mfula; Writing by Helen Reid; Editing by Alexander Smith and Jane Merriman

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