Trafigura has closed a US$600mn copper and cobalt development financing facility led by the Eastern and Southern African Trade and Development Bank (TDB) as the global commodity trader looks to capitalise on growing demand for the minerals critical to green technologies.
The deal with TDB – which acted as mandated lead arranger – is a secondary syndicated transaction, following a US$600mn financing agreement finalised in January between Trafigura, Chemaf Resources and Chemaf SA, a copper and cobalt producer in the Democratic Republic of the Congo (DRC).
A Trafigura spokesperson confirmed to GTR that there were other lenders involved, comprising “a diverse group of African and international banks”.
The financing will be used to develop mines in the mineral-rich DRC, including the completion of the mechanised Mutoshi mine in Katanga province and a processing plant in Kolwezi, as well as the expansion of the Etoile mine in Lubumbashi.
The Mutoshi mine will become the third-largest cobalt mine globally, Trafigura says, and is expected to start production by the fourth quarter of 2023, with a production capacity of 16,000 tonnes of cobalt hydroxide and 48,000 tonnes of copper cathodes per year.
TDB chief executive Michael Awori says the facility “will not only make its mark in terms of job creation and economic development for the country, but also boost our efforts towards climate change imperatives, by contributing to an increase in supply of metals which are essential to the energy transition”.
“We look forward to welcoming additional international and African banks to the syndicate in subsequent rounds of refinancing for these vital developments for the supply of critical minerals and the DRC economy,” adds Socrates Economou, head of nickel and cobalt trading for Trafigura.
Cobalt and copper are critical materials in the development of clean energy technology, used in renewable projects like wind turbines and electric vehicle batteries.
Over half of the world’s production of cobalt comes from the DRC, whose mining sector has been criticised for human rights abuses, including the use of child labour, hazardous working conditions and high levels of pollution.
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