Deal is signed, delivered and done. Stephen O
Friday February 18, 7:03 am Eastern Time
First Quantum, Glencore buy Zambia mines -FinMin
LUSAKA, Feb 18 (Reuters) - A consortium comprising Canada's First Quantum Minerals Limited (Toronto:FM.TO - news) (Vancouver:FM.V - news) and Swiss trader Glencore International AG on Friday signed a transaction agreement purchasing Zambia's Nkana and Mufulira mines.
Finance Minister Katele Kalumba, at a ceremony in the Zambian capital Lusaka, said the Mufulira mine and the Nkana mines, smelter and cobalt plant would be transfered to the new owners on March 15.
First Quantum President Clive Newall and Glencore executive Steven Isaacs signed for the consortium. Kalumba and Shalauwa Shimukowa, head of the largely state-owned Zambia Consolidated Copper Mines (ZCCM) signed for the Zambian government.
``The negative performance of our economy over the last two years, I attributed to continued difficulties with the privatisation of the remaining major assets of ZCCM which resulted in no capital investment being undertaken,' said Kalumba.
Under the agreement, ZCCM will receive a retained interest of 10 percent, a cash consideration of $20 million at close and deferred payments of $3 million, in five equal instalments starting in 2003. ZCCM will also be allowed a copper price participation to be calculated at two percent of copper price over and above 85 cents per pound, payable for five years from 2003 and capped at $4.4 million.
Operating under a new company called Mopani Copper Mines Plc, the consortium must make investment commitments of $159 million for the first three years from close and lay out contingent investments of up to $343 million, dependent on defined conditions.
Nkana and Mufulira make up 30 percent of ZCCM's assets. Kalumba said the sale of the balance -- Nchanga, Konkola and Nampundwe -- to Anglo American Plc (quote from Yahoo! UK & Ireland: AAL.L) was ``in process.'
Kalumba said that the privatisation was seen leading to combined copper production at Nkana and Mufulira rising to 130,000 tonnes in 2003 from 75,385 tonnes currently.
(Lusaka newsroom ++2601 235697/222689, Fax 2601 235698, Email: manoah@reuters.comzm)) |
