Glencore held talks over sale of | World Mining

Glencore held talks over sale of – World Mining News

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Glencore has held preliminary discussions about promoting its multibillion-dollar copper and cobalt mines within the Democratic Republic of Congo, in what could be a vital shift in strategy by the most important western investor within the African nation.

The FTSE 100 group last month rejected an unsolicited bid for the mines from a potential purchaser within the Middle East as a result of the offer was too low, in keeping with people acquainted with the matter.

The company would think about promoting half or all of its Congolese property for the precise price, in keeping with a number of people acquainted with the matter.

Some of the people added that the company had not began a formal sale course of and it was attainable that no deal could be accomplished.

Glencore owns the Mutanda copper-cobalt mine and a 75 per cent stake within the Kamoto Copper Company, wherein Congolese state-owned miner Gécamines additionally has a holding. Analysts at RBC worth the mines at $6.8bn.

The mines have been a key half of Glencore’s pitch to western carmakers to be their provider of alternative for a suite of electric vehicle metals.

The international rush for copper, a pink steel utilized in wiring, cables and electric autos, has triggered a wave of mergers and acquisitions exercise among the many main miners.

However, the Congolese mines have been far much less profitable than Glencore’s different copper property — producing simply $195mn of earnings in 2023 on revenues of $2.4bn — as a result of of working setbacks and low cobalt costs.

Last February Glencore took a $1bn pre-tax impairment on the Congolese copper mines as a result of of poor cobalt market circumstances and the settlement of a tax dispute.

Glencore stated in a assertion: “At the end of last year, Glencore received an unsolicited approach regarding its operations in the DR Congo. The approach was rejected. Glencore has not engaged any banks or advisers and is not running a sale process for its operations in the DR Congo.”

In latest weeks, Glencore has individually held casual discussions with potential patrons over the longer term of its property in Kazakhstan, in keeping with people acquainted with the talks.

Glencore deserted a sale course of last 12 months for Kazzinc, a giant zinc, lead and gold producer wherein it holds a 70 per cent stake. RBC estimates the worth of the stake at $5.1bn.

The gross sales would doubtlessly be the most important disposals by Glencore since chief government Gary Nagle took the helm in 2021.

Glencore declined to touch upon the potential disposal of property in Kazakhstan.

Glencore deserted a sale course of last 12 months for Kazzinc, wherein it holds a 70% stake © Glencore

Its departure from DR Congo could be a vital setback to the nation’s makes an attempt to court docket western investment to cut back reliance on China. Glencore is the one main non-Chinese international investor within the nation’s mines apart from Kazakhstan-based Eurasian Resources Group. 

Glencore’s Congolese mines produced 225,000 tonnes of copper and 35,000 tonnes of cobalt last 12 months, making the group the world’s second-biggest cobalt producer.

Any potential sale could be additional sophisticated by the truth that Glencore pays royalties on the mines’ output to Israeli businessman Dan Gertler, who’s underneath US sanctions.

Glencore is one of the world’s greatest commodity merchants and in addition has a giant mining portfolio. It is the world’s sixth-largest producer of copper, and prime western producer of thermal coal.

Last 12 months Glencore held temporary merger talks with Anglo-Australian group Rio Tinto, and the earlier 12 months it made a $23bn hostile bid to amass Teck Resources of Canada, which was rebuffed.

The company is because of report its annual outcomes on Wednesday.

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