Baar, Switzerland-based Glencore plc (LSE: GLEN) (SEHK: 0805) (JSE: GLN), one of the world’s largest global diversified natural resource companies, said it acquired Israeli billionaire Dan Gertler’s Fleurette group’s remaining 31% stake in Mutanda Mining Sarl and a 10.25% stake in Katanga Mining Ltd (TSE: KAT), both based in Africa’s Democratic Republic of Congo.
As a result of this buyout deal valued at $960 million, Glencore now owns 100% of the shares in Mutanda and 86.33% of the shares in Katanga. After offsetting debt Glencore paid $534 million in net cash. The purchase price for the Mutanda shares was $922 million and the Katanga shares was US$38 million. BMO Capital Markets Ltd provided an independent valuation of the Mutanda and Katanga shares.
Mutanda is a high grade copper and cobalt producer, with its operations located in the province of Lualaba in Congo. As of December 2016, Mutanda production was at an annualized production rate of above 200 ktpa of copper cathodes and 24 ktpa of cobalt in hydroxide. In addition, Mutanda has installed capacity to produce 390 tonnes per day of sulfuric acid and 73 tonnes per day of sulfur dioxide, for use in the hydrometallurgical complex.
Katanga operates a major mine complex in Congo producing refined copper and cobalt. The company has the potential to become Africa’s largest copper producer and the world’s largest cobalt producer. Katanga is listed on the Toronto Stock Exchange under the symbol KAT. Katanga’s processing operations were suspended in September 2015 with no production in Q4 2015. Full year copper production for 2015 from own sources was approximately 113kt. The suspension continued through 2016 and production is expected to resume once the Whole Ore Leach project is completed which is expected in the second half of 2017. Katanga’s head office is based in Yukon, Canada.
Glencore is a major producer and marketer of more than 90 commodities. The group’s operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities. With a strong footprint in both established and emerging regions for natural resources, Glencore’s industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. The firm also provides financing, logistics and other services to producers and consumers of commodities. Glencore’s companies employ around 160,000 people, including contractors.
Glencore, founded in 1974, was formerly known as Glencore Xstrata plc and changed its name to Glencore plc in 2014.
As previously reported by ExitHub, Glencore together with the Qatar Investment Authority (QIA), acquired a 19.5% stake in Russia’s oil giant Rosneft for €10.2 billion. The deal is said to have closed last month.
In October 2016, as part of its global debt reduction program, Glencore agreed to sell Glencore Rail (GRail) to Connecticut-based railroad operator Genesee & Wyoming’s (G&W) (NYSE: GWR) Australian subsidiary for A$1.14 billion (US$874 million).
In April 2016, Glencore agreed to sell a 40% equity interest in Glencore Agri to Canada Pension Plan Investment Board (CPPIB) for US$2.5 billion in cash. The deal valued 100% of the equity in Glencore Agri at US$6.25 billion.
Photo: Ivan Glasenberg, CEO of Glencore.