COPPER PROJECTS IN DRC DEVELOP FUTURE POWER SUPPLY

RNS Number : 4111A

Glencore International PLC

29 March 2012

 



Baar, Switzerland                                                                                            29 March, 2012

COPPER PROJECTS IN DRC DEVELOP FUTURE POWER SUPPLY WITH SOCIÉTÉ NATIONALE D'ÉLECTRICITÉ

Glencore International plc today announces that its copper projects in the Democratic Republic of Congo have secured the development of power supply sufficient to meet their future needs as they substantially increase production.

Agreements have been concluded with Société Nationale d'Électricité, the national electricity utility, and engineering contractors to refurbish DRC power generating, transmission and distribution systems (the "Power Project") that would provide for a progressive increase in power availability for Katanga through its subsidiary Kamoto Copper Company, Mutanda and Kansuki Sprl, to 450 megawatts, by the end of 2015.

Funding of $283.5 million for the Power Project will commence from the second quarter of 2012 until the end of 2015. Katanga will fund the Power Project but will be reimbursed $94.5 million each by Mutanda and Kansuki. Katanga's funding contribution will be $94.5 million.

$261.8 million of the amount will be reimbursed by SNEL (the "Debt Amount") through credits to power bills payable by the three operations.  Interest on the Debt Amount will accrue at 6 months LIBOR + 300 bps from the date of drawdown to date of reimbursement.

The Power Project will be managed by a technical committee including representatives of SNEL, the appointed EPCM contractor and the three operations. An additional component of the power bills payable by the operations will be set aside to be used to maintain the facilities after commissioning.

The operations believe that power availability through 2015 will be more than sufficient to support operating requirements, as production capacity increases and the Power Project progresses.  Currently, the three operations consume approximately 140 megawatts of power, but together expect their electricity needs to increase to 400 megawatts by the end of 2015, as production increases to 310,000 metric tonnes per annum of copper at Katanga and 210,000 metric tonnes per annum of copper at Mutanda/Kansuki.

It is anticipated that approximately 10 per cent of the capacity will be surplus to the power requirements of the operations and so will be available for SNEL to distribute. Improvements in infrastructure will strengthen the reliability and stability of electricity supplies generally.

Glencore owns approximately 75 per cent of Katanga (which owns 75 per cent of Kamoto Copper Company), 40 per cent of Mutanda and 37.5 per cent of Kansuki.

Telis Mistakidis, co-head of the Zinc/Copper/Lead department said:

"We have exciting plans to expand to over 500,000 metric tonnes of production per year from the world-class ore bodies held by Katanga, Mutanda and Kansuki in the Congolese copperbelt. Reliable power is vital for this expanded production which will enable us to maximize returns for the state from its natural resources, create jobs and other economic opportunities, and provide a return for the companies' shareholders from their investment. This power project will also improve electricity supply more broadly in the region, powering broader economic growth."

For further information, please contact:

Paul Smith (Investors) t: [phone] m: [phone] e:[e-mail]	Simon Buerk (Media) t: [phone] m: [phone] e: [e-mail]	Finsbury (Media) Guy Lamming Dorothy Burwell t: [phone]
Elisa Morniroli (investors) t: [phone] m: [phone] [e-mail]	Charles Watenphul (Media) t: [phone] m: [phone] [e-mail]

About Glencore International plc

Glencore is one of the world's leading integrated producers and marketers of commodities, headquartered in Baar, Switzerland, and listed on the London and Hong Kong Stock Exchanges. Glencore has worldwide activities in the production, sourcing, processing, refining, transporting, storage, financing and supply of Metals and Minerals, Energy Products and Agricultural Products.

 

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