EMR Capital has agreed to acquire the stakes in Lubambe Mine belonging to African Rainbow Minerals and Vale International. The Australian private equity firm will pay a total of $97.1 million in cash for their combined 80% stake and will assume the Zambian copper mine’s loan liabilities. Additional terms of the deal, which is EMR Capital’s first on the continent, were not disclosed.
African Rainbow Minerals, which own 40% of the mine, has been looking to divest itself of the mine since September last year following ongoing operational challenges and the decline in US dollar copper prices. These combined to cause the mine to record headline losses for the year and need on-going cash support. Despite this, Jason Chang, EMR Capital’s Managing Director and CEO, said EMR was attracted to the quality of the project as a long-life copper producer located in Zambia’s most prolific mining region.
“We are pleased to enter into an agreement to acquire Lubambe, which offers exceptional quality and growth potential and which will substantially enhance the value and depth of our copper portfolio,” he said.
EMR Capital, which manages some $2 billion in mining assets, held a final close for its second fund, EMR Capital Resources Fund II, in November last year, earning commitments of $860 million in an oversubscribed fund raise.
Bowman Gilfillan acted as legal advisors for ARM on the deal. Standard Bank and Deustche Securities provided financial advisory services for the transaction.