CAPE TOWN, May 12 (Reuters) - Arc Minerals shares
jumped 6.7% on Thursday after it announced an agreement under
which Anglo American would take majority control of the
junior exploration firm's Zambia copper-cobalt licenses.
Under the deal, which was first reported by Reuters, Anglo
will take 70% of a joint venture with Arc that will own licenses
to explore Zambia's copper-rich North-Western province, an area
Anglo previously explored in the late 1990s. It would mark the
first new investment by Anglo in Zambia in 20 years.
Major mining firms are searching for new sources of the
battery metals copper and cobalt, especially following the war
in Ukraine and sanctions on Russia which have sent metal prices
Anglo American will pay $3.5 million into Arc upon signing.
It will be able to retain its stake by spending $74 million on
exploration within seven years of signing and making cash
payments of $11 million to Arc, according to terms of the deal.
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 which
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.
First Quantum Minerals last Sunday said its board had
approved plans for a $1.25 billion expansion of its Kansanshi
mine in Zambia, a decision it said was prompted by renewed
confidence in Zambia's investment climate.
(Reporting by Helen Reid; Additional reporting by Clara Denina;
Editing by Christian Schmollinger, Edwina Gibbs and Ed Osmond)