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Zambia seeks ‘win-win’ deal with bondholders after default, says Minister

LUSAKA, Nov 19 (The Southern African Times) – Zambia is seeking a compromise solution with bondholders and does not expect them to seize its mining assets even though it defaulted on part of its debt last week, Mines Minister Richard Musukwa said on Thursday.

He also said Zambia had no plans to sell its shares in mining companies to raise cash after the country, which is Africa’s no.2 copper producer, failed to pay the $42.5 million coupon on its Eurobond debt on Friday.

“We don’t expect Zambia’s assets to be auctioned or taken away,” he told a news conference. “We are very positive that we will get a win-win situation between the bondholders and the government.”

Zambia’s fragile financial situation deteriorated further this year after the pandemic hit. A plunge in copper prices prompted mining giant Glencore to shutter its Mopani Copper Mines, which accounted for around 9% of the country’s copper output.

Musukwa said negotiations with Glencore on increasing the government’s stake in Mopani – a result of the disagreement with the government over the temporary closure – were nearing a conclusion.

A Glencore spokesman declined to comment.

The minister said Zambia’s 2020 copper production was expected to be 820,000 tonnes and that rising copper prices would encourage miners to produce more.

Figures available so far, he said, showed Zambia produced 646,111 tonnes of copper between January and September 2020, up from 590,321 tonnes in the same period last year, a 9.45% rise.

The price of copper has fluctuated wildly this year.

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