Eurasian Resources Group (ERG) has agreed a pre-export finance facility with trading giant Glencore and the London branch of Bank of China to support the supply of copper from Democratic Republic of the Congo (DRC). 

The facility allows Luxembourg-headquartered ERG to borrow up to US$150mn for working capital or general corporate purposes, and is supported by a supply agreement for copper cathodes from the company’s Metalkol plant in Kolwezi. 

ERG says the agreement will support growth in the DRC, which has become the world’s second-largest producer of copper, and meet growing demand for critical minerals crucial to the energy transition. 

The announcement follows reports that ERG had turned to the commodity trading market to seek pre-payment of up to US$1bn in exchange for copper and aluminium offtake agreements. 

Industry insiders say large traders are likely to increase their involvement in such facilities, as they have built up huge cash reserves after two years of record profits. 

“We are pleased to partner with ERG and Bank of China to help support the ongoing supply of critical minerals, such as copper, from the DRC to customers around the world,” says Glencore’s head of copper marketing, Jyothish George.

Mital Patel, head of structured trade finance at Bank of China, London branch, says the transaction “has all the hallmarks of a traditional pre-export structure”. 

“We have two clients, either side of the supply chain, a commodity that is critical towards electrifying our world, and a producer using a more environment friendly than conventional mining process, as Metalkol uses historic tailings as its feed,” he says. 

ERG adds that Metalkol’s copper output is in line with the Responsible Minerals Initiative, an industry resource backed by more than 500 member companies and organisations, as well as with OECD guidance on responsible mineral supply chains in high-risk areas.