Glencore Xstrata raises stake in Africa’s copper belt

Glencore Xstrata raises stake in Africa's copper belt

Open pits of the Mutanda copper mine seen from the air, via YouTube.

Glencore Xstrata (LON:GLEN) confirmed Thursday it had acquired an additional 14.5% interest in Mutanda, a copper mine in the province of Katanga, Democratic Republic of Congo, raising its indirect interest to 69%.

Mutanda, a high-grade copper and cobalt producer, has become a significant producer of the red metal thanks to Glencore. The firm has invested $670m to double the mine’s capacity from about 100,000 tonnes of copper cathodes in 2012 to 200,000 tonnes next year.

The mine is seen as one of Glencore’s key growth assets in Central Africa’s copper belt, where the miner and commodities trading giant already owns indirect interests in copper operations through its majority stake in DRC company Katanga Mining.

The company acquired a 54.5% interest in Mutanda in July, receiving at the time a put and call option agreement for the additional 14.5% stake.

Glencore is also moving  full-speed with its plans to boost coal production in South Africa. On Wednesday it was granted regulatory approval to purchase the right to export an additional 6.5 million tonnes through the Richards Bay Coal Terminal from BHP Billiton’s Energy Coal South Africa (BECSA).

Despite the mounting issues affecting the mining industry in South Africa, from strikes to growing costs, the company’s chief executive Ivan Glasenberg has never been not afraid of betting on Africa’s largest economy. Not counting he is a native of South Africa, Glasenberg has repeatedly said the country is a great platform from where the company can tap into the rest of the continent.

Glencore Xstrata’s projects in the country include the Goedgevonden thermal-coal complex in the Mpumalanga province, the Helena underground chrome mine on the eastern limb of the Bushveld Complex, the Wonderkop ferrochrome plant in the North West Province and the Eland platinum mine near Pretoria.

Glencore merged this year with Xstrata – company that had strong South African links – to form one of the world’s largest commodities groups.


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