MW Glencore's strategic allure highlighted by sale of mining assets to U.S. government-backed entity
By Jules Rimmer
Orion Critical Mineral Consortium buys stake in two DRC assets from Glencore
The benefits of selling a stake in its copper and cobalt mines in the DRC may not be purely financial. Glencore's mining operations may have a lower risk premium attached if it is perceived as having U.S. government backing
A deal epitomizing the new era of resource nationalism was unveiled Wednesday when Glencore agreed to sell a stake in two African copper mines to a consortium backed by the U.S. government.
Glencore said it's agreed to sell a 40% stake of its interests in two Democratic Republic of Congo assets, Mutanda Mining and Kamoto Copper, to a consortium led by U.K. private-equity firm Orion Resource Partners that includes the U.S. International Development Finance Corp. Abu Dhabi's sovereign wealth fund ADQ also is a partner.
Under the deal, Glencore will continue to manage the mines as well as look for other projects in what's called the African copper belt.
The Orion-led consortium that the U.S. is involved in was set up in October, "designed to support the United States and its allied and partner nations to develop secure, responsible, and resilient supply chains for the critical minerals that underpin future economic growth and security."
The transaction implies an enterprise value of around $9 billion for the two assets of which Glencore owns roughly 80% according to Investec analyst Patrick Mann. He assumes it will be worth $3.2 billion to Glencore ultimately with a small adjustment perhaps for some debt attached to the mines.
Glencore (UK:GLEN) has a market capitalization of GBP60 billion ($82 billion) so in cash terms alone, this is worth roughly 3.5% of that and the share price reacted accordingly Wednesday with a move upwards of 2.5%.
More significant perhaps going forward, Mann suggests, is that this might help to derisk some of Glencore's mining operations which are often located in politically volatile geographies, like the DRC. So while both Mann and Liam Fitzpatrick from Deutsche Bank both think the transaction is broadly in line with how analysts valued the assets in their models, this could unlock significant upside.
Moreover as Mann pointed out in a note to Investec clients Wednesday, this might bring about a smoother running of the operations if the company can exploit the influence and the diplomatic muscle of the U.S. government to make mining operations more secure and hassle-free. With the U.S. as a partner and backing them with licensing, regulatory issues, land access and so on, analysts may be inclined to attach a higher valuation to Glencore's operations.
The U.S. Deputy Secretary of State, Christopher Landau, issued a statement lauding the deal and claiming it can promote "secure, reliable and mutually beneficial flows of critical minerals between our two countries" while also "designed to support the U.S... to develop secure and resilient supply chains for the critical minerals that underpin future economic growth and security".
Glencore's strategic potential has already attracted a potential bid from Rio Tinto, $(RIO)$ structured as a merger of sorts, valuing the combined enterprise at $260 billion. The boom in commodity prices recently has also heightened its appeal and led to a surge in the share price this year with the stock already almost a third higher by the first week in February.
-Jules Rimmer
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 04, 2026 09:48 ET (14:48 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments