ARC MINERALS said yesterday that Anglo American would take majority control of its Zambia copper-cobalt exploration licences. It marks the first new investment by Anglo in Zambia in 20 years.
Under the deal, Anglo will take 70 percent of a joint venture with Arc that will own licenses to explore Zambia’s copper-rich North-Western province, an area that Anglo previously explored in the late 1990s.
Major mining firms are searching for new sources of the battery metals copper and cobalt, especially in the wake of the war in Ukraine and sanctions on Russia which has sent metal prices soaring.
Anglo American will pay $3.5 million (R56.8m) into the joint venture (JV) upon signing. It will be able to retain its stake by spending $74m on exploration within seven years of signing and making cash payments of $11m into the JV, according to terms of the deal.
Arc Minerals previously had an exclusivity agreement with Anglo from July, 2020 to July, 2021 and when that lapsed Arc Minerals said it would start talks with other major miners which had approached it.
Zambia, Africa’s second-largest copper producer, has become a more attractive investment proposition for mining companies since the election last August of business-friendly President Hakainde Hichilema, and a subsequent mining tax reform.
The country aims to more than triple its annual copper output within the next decade to 3 million tonnes a year.