Glencore PLC Katanga announces agreement to acquire land rights (6247X)
20 December 2019 - 7:21PM
UK Regulatory
TIDMGLEN
RNS Number : 6247X
Glencore PLC
20 December 2019
Glencore plc
Baar, Switzerland
20 December 2019
KATANGA MINING ANNOUNCES AGREEMENT TO ACQUIRE LAND RIGHTS FROM
GÉCAMINES
Glencore refers to the announcement today by Katanga Mining
Limited ("Katanga") in which it announced that Katanga's 75%
subsidiary Kamoto Copper Company ("KCC") has entered into an
agreement with La Générale des Carrières et des Mines
("Gécamines"), its 25% joint venture partner in KCC, to acquire
from Gécamines a comprehensive land package covering areas adjacent
to KCC's existing mining concessions.
The land includes multiple blocks over the preferred location
for construction of a new long-term tailings facility, and multiple
other blocks that will enhance KCC's ability to more efficiently
operate its mines, facilities and other key infrastructure
requirements. If this agreement is implemented then the risks for
KCC's operations resulting from land constraints, which are
described in the Company's 43-101 Technical Report issued on 7
November 2019, would be mitigated.
KCC will pay up to USD 250 million to acquire the land, the
total amount payable being dependent on delivery of title to the
various different land areas.
The agreement also provides for (among other matters):
(i) an initial payment of USD 150 million to Gécamines which
will be fully offset against the purchase price consideration or
other payment obligations of the Company to Gécamines from time to
time,
(ii) obligations on KCC to remove tailings (estimated at circa
15m dmt), currently in a sub-section of these areas, to another
suitable proximate location,
(iii) warranties and indemnities from Gécamines concerning the
land interests to be transferred,
(iv) contingent obligations to pay "pas de porte" payments to
Gécamines if KCC declares a JORC compliant reserve or otherwise
elects to mine any resources in certain of the acquired land areas,
on substantially the same terms as in the Settlement Agreement
announced by KCC in June 2018. An amount of up to USD 120 million
of the consideration may be offset against these pas de porte
obligations, and
(v) a new royalty to Gécamines of 2.5% of net sales from the
acquired land areas if KCC elects to mine any resources in the
acquired land areas.
KCC expects to satisfy the consideration payments from existing
liquidity. The agreement anticipates the title transfers to be
effected during the course of 2020.
The entering into of this acquisition agreement between Katanga
and Gécamines constitutes a smaller related party transaction as
defined in UK Listing Rule 11.1.10 because Gécamines holds more
than 10% of the voting rights in a material subsidiary of Glencore.
Accordingly, Glencore has obtained written confirmation from a
sponsor under the UK Listing Rules that the terms of the agreement
with Gécamines are fair and reasonable as far as the shareholders
of Glencore are concerned.
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Maartje Collignon t: +41 41 709 3269 m: +41 79 197 4202 maartje.collignon@glencore.com
Media
Charles Watenphul t: +41 41 709 24 62 m: +41 79 904 33 20 charles.watenphul@glencore.com
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 60 commodities. The Group's operations comprise around
150 mining and metallurgical sites and oil production assets.
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 offices located in
over 35 countries.
Glencore's customers are industrial consumers, such as those in
the automotive, steel, power generation, battery manufacturing and
oil sectors. We also provide financing, logistics and other
services to producers and consumers of commodities. Glencore's
companies employ around 158,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative.
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END
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