Zambia ZCCM Agrees To Sell Lumwana Copper Mines Stake To Barrick-Co

Jun 01, 2011 (Dow Jones Commodities News via Comtex) -- Zambia's state mining investment company, Zambia Consolidated Copper Mines Investments Holdings, has agreed to sell its 2.2% stake in Lumwana Copper Mines to Canada's Barrick Gold Corp. (ABX) for at least $160 million, ZCCM-IH said Wednesday.

The board of ZCCM-IH agreed to the offer after "due consideration and consultations," the company said in a statement, adding that the offer presents ZCCM-IH with an opportunity to realize value from its investment in Toronto-listed Equinox Minerals Ltd. (EQN.T), which is due to be taken over by Barrick.

Zambia's state regulator, the Competition and Consumer Protection Commission, had earlier insisted that the ZCCM-IH stake was not for sale. However, following consultations between government, Barrick and Equinox, the commission ended its insistence, according to Zambian officials.

The Zambian government has since granted unconditional approval of the $7.7 billion deal, which will pave the way for the takeover of Equinox's assets in Zambia.

ZCCM-IH acquired the 2.2% stake in Lumwana in 2006. The state miner maintains minority stakes in major copper mines on the Copperbelt and North Western provinces.

Barrick is expected to honor Equinox's copper smelting agreements with Zambian local smelters and suppliers, according to the commission's spokesman Brian Lingele.

Lumwana Copper Mines has copper smelting deals with Chinese-owned Chambishi Copper Smelter and Konkola Copper Mines' Nchanga Smelter on the Copperbelt province.

Chambishi is a joint venture between China Nonferrous Metals Co. (8306.HK) and the Yunnan Copper Group (000878.SZ) while KCM is owned by London-listed Vedanta Resources PLC (VED.LN).

Zambia, Africa's largest copper miner, continues to attract investments from global mining giants as they seek to exploit rich ore bodies in the mineral-rich Southern African nation.