JCHX Mining is close to concluding a deal to buy Zambia’s Lubambe copper mine, two sources told Reuters, in the latest in a string of copper deals by Chinese companies intent on growing their control of the African copper mining industry.
The Shanghai-listed mining services and contracting firm’s deal to buy an 80% stake in Lubambe mine held by EMR Capital is now nearing completion, the sources said.
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JCHX’s plans had almost been scuppered after cash-rich Abu Dhabi upstart International Resources Holding (IRH) had been poised to be an interloper after announcing its interest in the same assets earlier this year. IRH is a unit of the United Arab Emirates’ most valuable company, International Holding Company.
Since then, however, the sources said IRH have bowed out, leaving JCHX with a clear path to close the deal in the coming weeks.
As energy transition unfolds, China and the Middle East have featured heavily in a race to tap Africa’s reserves of critical raw materials needed to power a move away from fossil fuels with oil powers starting to emulate China’s years of investment.
“We are happy to state the transaction as announced is on track and we anticipate to be closing in coming weeks,” Jason Chang, the chief executive for EMR, told Reuters.
“Some elements of the process are not within our control.”
JCHX is finalizing details of the purchase with Zambian authorities, having reached an agreement with EMR, one of the sources said.
EMR, which has owned the Lubambe mine since 2017, wants to exit the project as its funds mature, after Covid-19 delayed its development, Reuters reported in March. EMR also sold its entire stake in the adjacent Mingomba copper project for a sizeable, undisclosed amount to California-based start up KoBold Metals.
IRH, emboldened after buying a 51% stake in Zambia’s Mopani Copper Mines, has said it is seeking more opportunities to expand in critical metals in Zambia and on the continent.
Zambia, Africa’s second largest copper producer, will hold a 30% stake in the Lubambe assets through state firm ZCCM-IH, Hapenga Kabeta, the Permanent Secretary in the ministry of mines, told Reuters.
The ZCCM board approved JCHX’s purchase of the Lubambe mine, Kabeta said.
ZCCM, which has most of its assets in mining and energy and invests on behalf of the government, declined to comment.
JCHX didn’t immediately respond to emailed questions. Lubambe, previously owned by African Rainbow Minerals and Vale SA, produced about 15,000 tons of copper last year but needs to raise output to about 2,500 tons a month to become sustainable, it says on its website.
China is aggressively pursuing deals for copper, cobalt and lithium in Africa, as the world’s second-largest economy continues to scour the world for natural resources needed for its rapidly expanding electric vehicle industry.
MMG, backed by state-owned China Minmetals NonFerrous Co, bought Botswana’s Khoemacau copper mine for about $1.9 billion.
Chinese investors are the biggest mining investors in Zambia’s northern neighbour, the Democratic Republic of Congo, which also the world’s No.1 cobalt producer.
(By Felix Njini, Melanie Burton and Julian Luk; Editing by Veronica Brown and Michael Perry)
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