GLENCORE DIRTY DEAL: Who is fooling who?
Copper is trading at $7,979 per tonne on London Metal. Richard Musukwa has allowed ZCCM-IH to sign a deal with Mopani to sell them the copper at $2,300 per tonne until they manage to pay back $1.5 billion.
Meaning Glencore will be making $5,400 per tonne on top of all the copper it buys from Mopani since it’s the sole buyer.
Milano as of 2018 reported producing 118,000 tonnes per year. If they produce 100,000 tonnes this year for example then ZCCM-IH will earn $230 million whilst Glencore will make $540 million.
Of the $230 million ZCCM-IH must run the mine, pay workers and suppliers etc, whilst Glencore will do nothing but make the rest of the money
If we say Mopani finds a way to run the mine and pay salaries without touching the $230 million each year, it will take ZCCM-IH 7 years to pay off Glencore the debt of $1.5 billion. Meanwhile Glencore would have made $3.8 billion on top of that.
Net profit from transaction for Glencore is $5.3 billion. Total loss to ZCCM -IH due to foolish agreement to sell to Glencore cheaply is $3.8 billion.
The Mopani deal stinks.
This will be worse than KCM – Vedanta deal during Mwanawasa.
People want to get rich overnight while selling our heritage in broad day light.
Mopani will only survive 2021 because of elections but will crumble next year because how will the mine survive with that dirty deal? $2,300 per tonne for our copper? When it’s worth $7,900?And already the mine management is signing expensive contracts that were not part of the evaluation team’s analysis. For example they based the offer on the running contracts for inputs which Mopani is buying meaning they evaluated the running cost of the mine, but now management under Musukwa’s instructions are issuing new contracts for 3 years each to new contractors and suppliers at higher prices which is inflating the cost of running
Fuel for example, the previous contract was favorable to Government but Musukwa has brought in his stooges to sign 3 year contracts at a price which will erode any profits for the mine to operatemo