Glencore has purchased from subsidiaries of Fleurette Properties Limited the Fleurette group's remaining 31% stake in Mutanda Mining Sarl and an approximate 10.25% stake in Katanga Mining Limited.
The consideration for the Mutanda Shares and the Katanga Shares has been determined based on an analysis by BMO Capital Markets Limited who was engaged by Glencore to provide an independent view as to the value of the Mutanda Shares and Katanga Shares for the purposes of the transaction.
The consideration for the Mutanda Shares is US$922 million and the Katanga Shares is US$38 million.
Glencore will set-off against the cash consideration payable to Fleurette, loans owing to the Glencore group by Fleurette and its affiliates, and secured over the Mutanda Shares, amounting to US$556 million of which US$120 million comprises accrued interest. In addition, Glencore has acquired shareholder loans owed to the Fleurette group by Mutanda Mining Sarl in the amount of US$130 million.
Accordingly, the aggregate cash consideration payable by the Glencore group in respect of the transactions is US$534 million.
In addition, Glencore has acquired a further 15,325,000 shares in Katanga Mining Limited ("Katanga"), corresponding to an approximate 0.8% stake, which were held as the security for a loan provided to Ruwenzori Limited, a member of the Fleurette group, in connection with Ruwenzori's acquisition of 25,000,000 shares in Nikanor PLC which were issued as part of a private placement. Nikanor PLC subsequently merged with Katanga and the shares were exchanged for shares in Katanga.
Glencore now owns 100% of the shares in Mutanda and approximately 86.33% of the shares in Katanga.
The transactions (taken together) constitute a smaller related party transaction as defined in Listing Rule 11.1.10 and Glencore has accordingly obtained written confirmation from a sponsor that the terms of the transactions with Fleurette and its affiliates are fair and reasonable as far as the shareholders of Glencore are concerned.
About Katanga and Mutanda
Mutanda Mining SARL
Mutanda is a high grade copper and cobalt producer, with its operations located in the province of Lualaba in the DRC. 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 Mining Limited
Katanga operates a major mine complex in the Democratic Republic of 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.
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