ZCCM CEO, Mabvuto Chipata on the acquisition of Mopani Mine

ZCCM Investments Holdings, the state miner in Zambia, is gearing up for a crucial shareholder vote on the acquisition of Mopani Copper Mines from Glencore. Mopani is not only one of the longest-running but also one of the largest copper and cobalt mines in Zambia. In a recent interview with CNBC Africa, Mabvuto Chipata, the CEO of ZCCM Investments Holdings, shed light on the background of the transaction and the reasons driving the acquisition. Chipata emphasized that the transaction with Glencore stems from a purely commercial issue. He mentioned that when Glencore decided to place the mine on care maintenance due to challenging market conditions last year, ZCCM saw an opportunity to engage in discussions. This led to ZCCM making an offer to Glencore in line with its strategic plan to increase its stakes in mining companies and move away from minority shareholding. Chipata expressed confidence that the shareholders would approve the deal, citing their strategic focus on expanding their interests in the mining sector. He highlighted the potential benefits of the acquisition for the Zambian economy, emphasizing that by taking a more significant interest in mining investments, ZCCM could increase tax revenues, dividends, and overall production levels, thereby boosting the country's economic prospects. While addressing concerns about the risks associated with mining in Zambia, particularly in light of the ongoing dispute between the Zambian government and Vedanta Resources, Chipata underscored Zambia's favorable economic fundamentals and policy framework. He reassured stakeholders that Zambia remains open for business and positioned ZCCM as a credible partner for potential investors in the mining sector. Regarding the repayment of the $1.5 billion debt associated with the acquisition, Chipata outlined a timeline of 10 to 17 years but expressed optimism about the possibility of an earlier repayment, especially given the positive trends in copper prices. He emphasized the sustainability of the deal and the potential for Mopani to repay the debt sooner than projected, further strengthening the company's financial position. In conclusion, the acquisition of Mopani Copper Mines represents a significant strategic move for ZCCM Investments Holdings, with potential far-reaching implications for the Zambian economy. By taking a more active role in the mining sector, ZCCM aims to maximize returns, enhance production levels, and contribute to the long-term economic growth and stability of the country.