Anglo American has agreed a deal to take majority control of Arc Minerals’ Zambia copper-cobalt exploration licences, a source with direct knowledge of the matter said, which is Anglo’s first investment in Zambia in 20 years.
The joint venture deal would give Anglo a 70% interest in London-listed exploration firm Arc Minerals’ licenses in Zambia’s copper-rich North-Western province, covering an area which Anglo previously explored in the late 1990s.
Major mining firms are searching for new sources of the battery metals copper and cobalt, especially since the war in Ukraine and sanctions on Russia sent metal prices soaring.
Anglo American will pay $3.5 million into the joint venture upon signing, and can retain its stake in the venture by spending $74 million on exploration within seven years of signing and making cash payments of $11 million into the JV, according to a draft of the deal terms reviewed by Reuters.
Anglo American declined to comment on the deal when contacted by Reuters.
An Arc Minerals spokesperson also declined to comment, saying Arc does not to comment on speculation.
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 that 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.