Glencore Approves $960m Copper and Cobalt Contract with Fleurette Group

Company - Pavan Pandey - Feb 14,2017

Rating -

stars - based on 21 reviews

glencore approves 960 million dollar copper and cobalt contract with fleurette group

Glencore has bought up the resting stake in Fleurette Group's Mutanda mine in the Democratic Republic of Congo and has enlarged its stake in Katanga Mining for a total of $960m.

The commodity company, Glencore plc, said in a statement that it now owns 100% of Mutanda mine and approx. 86$ of Toronto-listed Katanga Mining Limited.

Taking into account loans it had made to Fleurette Group, Glencore, a Jersey registered company, is paying $534 million in net cash for the assets, the company said in a statement.

For Glencore, the latest deal accomplishes two things: superior control of key assets at a time of growing copper and cobalt values and a parting of ways from Gertler after his business in the DRC (Democratic Republic of Congo) and relationship with DRC President Joseph Kabila attracted inspection from the United States Department of Justice.

The arrangement marks another huge step in Glencore’s turnaround from the commodities disaster. After selling $10 billion in properties and cutting liability, it’s returning to deal-making as commodity charges rapidly rebound.

Copper is at a 20-month high rate and cobalt, a vital element in lithium-ion batteries, climbed 75% since the beginning of last year. Struggle for cobalt resources is increasing amid a worldwide boom for electric vehicles (EV).

A senior adviser to Fleurette Group, Mr. Dan Gertler, stated that the group was devoted to Congo, where Fleurette has worked for two decades, but it was the correct time to sell its Mutanda mine and Katanga Mining Ltd.’s assets.

He further added that with the mine now working at full capability, the group feels it is the correct time to quit its investment and to re-invest in further brown and Greenfield opportunities.

Mutanda mine has been working at more than 200,000 tons of copper per year.

Glencore plc stated that the mine complex had the latent to become Africa's biggest copper producer and the world's leading cobalt producer.