Geneva / Nairobi - 21 November 2022
The global energy transition requires increasing amounts of minerals such as copper and cobalt. These resources are among the key components of renewable energy infrastructure and technology such as wind turbines and electric vehicle batteries, enabling the sustainable generation, transmission, and storage of clean energy.
Africa and the Democratic Republic of Congo in particular are endowed with some of the largest reserves of minerals required to catalyse the global energy transition towards a net-zero world. In this spirit, the Eastern and Southern African Trade and Development Bank (TDB) acting as a mandated lead arranger (MLA) has closed a syndicated USD600 million copper and cobalt development financing facility with Trafigura. An important component of this agreement involves the enhancement of ESG compliance and responsible sourcing awareness and implementation, in line with IFC Performance Standards and OECD Guidelines.
While catering to the growing global demand for cobalt and copper, the Facility will contribute substantial economic value and social impact for the country, with thousands of jobs created and sustained, and several service contracts for DRC-based companies.
The Facility will enable the completion of the new mechanised Mutoshi mine and processing plant in Kolwezi, and the expansion of the Etoile mine and processing plant in Lubumbashi. The Mutoshi mine, which will become the third largest cobalt mine globally, 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.
In January this year, Trafigura, one of the world's leading independent commodity trading companies, concluded an initial USD600 million financing agreement with Chemaf Resources Ltd (formerly Shalina Resources Limited) and Chemaf SA, a leading vertically integrated copper and cobalt producer in the DRC. Thereafter, TDB and other financial institutions were invited by Trafigura to participate in this secondary syndicated transaction, with TDB as MLA.
Michael Awori, TDB CEO said: "Over the past few years, TDB and Trafigura have been working together to meet the energy needs of TDB member states. We are delighted to expand our collaboration with this impactful facility in the DRC, which 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."
Socrates Economou, Head of Nickel and Cobalt Trading for Trafigura, said: "We're delighted that TDB and an initial syndicate of banks have chosen to join the facility. 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."
Image by Trafigura Group Pte. Ltd.
TDB has been active in the DRC for several years and opened a regional office in Kinshasa in 2019. For example, the Bank has been contributing to poverty alleviation and multiple sustainable development goals (SDGs) by financing local financial institutions with micro, small and medium enterprises (MSMEs) as their client-base. As well, TDB is financing the country's cement sector in view of boosting regional value chains, increasing the resilience of its manufacturing sector, and reducing greenhouse gas emissions associated to imports from far away. TDB continues to be active across several sectors in the DRC, with a strong pipeline in transport, renewable energy, manufacturing as well as health care and education.
Established in 1985, the Eastern and Southern African Trade and Development Bank (TDB) is a regional development finance institution, with investment grade ratings and assets of USD8bn. TDB serves 23 member states in its region, with the mandate to finance and foster trade, regional economic integration and sustainable development, through trade finance, project and infrastructure finance and asset management.
TDB is part of TDB Group, which also comprises the Trade and Development Fund (TDF), Eastern and Southern African Trade Advisers Limited (ESATAL), TDB Captive Insurance (TCI), and the TDB Academy. Visit: www.tdbgroup.org
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. At the heart of global supply, Trafigura connects the world with the vital resources it needs. Through our Oil & Petroleum Products, Metals & Minerals, and Power & Renewables divisions, we deploy infrastructure, skills and a global network to move commodities from where they are plentiful to where they are needed most, forming strong relationships that make supply chains more efficient, secure and sustainable.
Trafigura also owns and operates a number of industrial assets including multi-metals producer Nyrstar and fuel storage and distribution company Puma Energy; and joint ventures Impala Terminals, a port and logistics provider, and Nala Renewables, a power and renewable energy investment and development platform. Trafigura is owned by its employees and employs over 13,000 people working in 48 countries. Visit: www.trafigura.com
Trafigura Group Pte. Ltd. press release