Glencore £4 billion write-off settles Congo joint venture dispute

GLENCORE has written off $5.6 billion (£4.2 billion) of debt to settle a dispute with the Democratic Republic of Congo’s state mining company over a joint venture that is set to become the world’s biggest producer of cobolt.

The dispute over the Kamoto Copper Company, in which Glencore has a 75% stake through its Katanga subsidiary, had threatened to hit supplies of the metal which is used in phone and electric car batteries.

Glencore will give the DRC state mining group Gécamines a $150 million payment, funded through new loans. At the same time, $5.6bn of debt in Kamoto will be converted to equity, slashing Kamoto’s debt from $9bn to $3.45bn.

Shares in Katanga, listed on the Toronto stock exchange, jumped 23% on news of the settlement. “I consider this is a small price to pay,” said Paul Gait, an analyst at Bernstein Investment Research.

Metal buyers had feared that any disruption of cobolt supplies could push up prices from already historic highs of nearly $100,000 a tonne.

Meanwhile, Glencore is trying to stop a new mining code from the DRC government which will impose higher royalties and taxes. Glencore’s ex-partner in the DRC, Israeli Dan Gertler, is also suing over unpaid royalties.