Katanga Mining has signed a US$150mn one-year loan with Glencore International. The decision to secure this facility was one of the outcomes of a independent committee set up by the board of Katanga following the unsolicited takeover bid made by Camec in the summer.
Camec has subsequently withdrawn its takeover offer following a continuing dispute with the government of the Democratic Republic of the Congo (DRC) over the validity of its mining licences.


Katanga’s committee decided that it was in the company shareholders’ best interests to find the necessary funding to independently develop the firm’s mining complex in the DRC.
“We were encouraged by the strong interest shown in Katanga during the review process. Various alternatives including the loan facility were reviewed by the committee and the best direction for Katanga shareholders is for the company to proceed independently with this financing,” comments Graham Mascall, chairman of the independent committee.
The facility raised with Glencore carries an interest rate of 4% plus Libor payable upon maturity. During the one-year term, the loan is convertible at the option of Glencore into 9,157,509 common shares of the company. Katanga has the right to repay the loan at anytime.


Katanga has also agreed to a 10-year offtake contract with Glencore under which Glencore will buy 100% of the company’s annual copper and cobalt production at market terms.
The agreement sets out that Glencore will pay 90% of the expected sales value upon loading at the mine gate, and will be required to pay the balance off upon delivery of the metal at the discharge port. Funding of this facility is expected to be available within two weeks of the loan documentation being completed.