Anglo American (LSE: AAL) and junior partner Arc Minerals (LSE: ARCMA) have ended their copper and cobalt exploration joint venture in Zambia by mutual agreement, marking the close of Anglo’s first new investment in the country in nearly 20 years.
The partnership, launched in 2022, stalled after a year marked by no drilling activity. As part of the separation terms, about $800,000 will remain in the account of Handa Resources, which is the company holding Anglo’s interests. Anglo will relinquish its shares, and Arc will regain full control.
Arc Minerals shares plunged on the news, dropping 50% to 0.52 pence in afternoon London trading. The stock has fallen 60% this year and has a market capitalization of £7.86 million (US$10.5 million).
“While we are sorry to part company with Anglo American, I am pleased that we revert to a controlling position in what is widely regarded as one of the most prospective copper tenements in Africa with only a fraction having been drilled to date,” Arc Minerals executive chairperson Nick von Schirnding said. “We will explore our options for these assets, which may include a new JV partner”.
Von Schirnding also addressed ongoing legal issues in Zambia, accusing an unnamed individual of attempting to “hold the company to ransom” and reaffirming Arc’s commitment to resolving the matter through the courts.
Despite the setback, Arc Minerals stated that, with its current cash reserves and funds left in Handa, it does not expect to raise new equity in the near term to maintain operations.
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