Glencore Plc, a Swiss multinational commodity trading and mining company, is weighing selling its 70% stake in Kazzinc, a big mining company in Kazakhstan, to unidentified investors from China, the Bloomberg news agency reported, citing its sources familiar with the issue.
Glencore is also trying to sell the Vasilkovskoye gold field, operating by Kazzinc. The company already tried to sell the asset more than seven years ago but the deal was canceled back then, according to the media outlet.
«The gold mine and Kazzinc’s core zinc operations could be sold to separate buyers or a single party, according to some of the people. Deliberations are preliminary and may not lead to a transaction. A representative for Glencore declined to comment,» Bloomberg reported.
The asset might be sold within a strategy aimed at selling off smaller or more challenging assets as CEO of Glencore Gary Nagle is trying to simplify the business, following the strategy his predecessor launched. The company has already sold its zinc assets in Peru, as well as some smaller copper operations. Glencore Plc’s 70% stake in Kazzinc may be worth several billions of dollars.
Kazzinc is one of the biggest enterprises in Kazakhstan’s non-ferrous industry. It produces zinc, copper, gold and silver in bars, supporting the full-fledged production cycle from ore production to issuing pure metal.
The company is headquartered in Ust-Kamenogorsk and runs five factories. Its main stakeholder is Glencore (ranked 21st in the Fortune Global 500). The Tau-Ken Samruk National Mining Company controls the remaining 29.8% of shares.
According to Bloomberg, zinc prices have rallied this year due to constraints on mine supply. However, demand for the metal could decline in the future as zinc isn’t crucial for «fast-growing industries like renewable energy and electric vehicles, where demand for other metals like copper and aluminum is soaring.»
Meanwhile, zinc production in Kazakhstan is still growing. In 2023, Kazzinc produced 173,900 tons of zinc, a 27,500-ton increase over 2022; 35,600 tons of lead; 14,800 tons of copper and 598,000 ounces of gold, Glencore’s annual report said.
