Copper and cobalt, Glencore to take Congo subsidiary Katanga Mining private

On 22 April, it was confirmed that Katanga Mining Limited (KML) had entered into a definitive agreement with Glencore International pursuant to which it would be taken private by way of an amalgamation of the company with a wholly-owned subsidiary, reports Roskill.

KML cited a number of key motivations including the lack of a meaningful public float, limited trading liquidity, the costs of a stock exchange listing relative to the market value of common shares, the attractive premium being offered to shareholders (other than Glencore), current commodity price risks, ongoing operational risks, financial risks, and the lack of sources of financing without support from Glencore.

Glencore had a 99.4% interest in KML prior to the agreement. Shareholders, other than Glencore, will now receive C$0.16 in cash for each pre-amalgamation common share held, which KML said represented a 100% premium over the closing price of the common shares on 21 April, a 139% premium over the 20-day volume-weighted average price, and a 60% premium over the high-end of a valuation range provided by KPMG.

KML has a 75% interest in Kamoto Copper Company (KCC), the entity engaged in copper and cobalt mining activities. Gécamines owns the remainder directly or through its Simco subsidiary. KCC owns underground and open-pit mines, the Kamoto concentrator (KTC) and the Luilu Metallurgical Plant which produced broken cathode until 2015. The move brings these assets more firmly under the control of the biggest mine producer of cobalt in the world.

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