Glencore’s $250m prepayment deal powers Orion Minerals’ Prieska copper restart

Tawanda Karombo

Glencore has secured bulk copper and zinc concentrates from South African junior Orion Minerals’ Prieska mine under a $250 million prepayment agreement, underscoring the intensifying global race for critical minerals.

Orion will use the prepaid funding facility to bring its copper assets in the Northern Cape into production. The global rush for copper, driven by growing demand from renewable energy and storage, has brought a flurry of deal making in the local and global mining industry.

On Monday, Orion Minerals announced that its subsidiary, Prieska Copper Zinc Mine had now executed a binding prepayment agreement with Glencore for the $250m prepayment facility linked to the sale of bulk, copper and zinc concentrates from the asset.

Tony Lennox, CEO for Orion Minerals, said the first tranche of the facility “will fund the Uppers development” while the early drawdown on a second tranche will allow the company to “start work” on the Deeps project.

“We expect first production from the Uppers 13 months after closing of the Prepayment Facility, which is now expected around the end of March 2026 due to a short delay in finalising this agreement and the delivery timing of long lead time equipment orders,” said Lennox.

“Consequently, first concentrate is now expected at the end of Q1 2027.” 

Shares in Orion Minerals slumped by 2.3% in afternoon trade on the JSE to R0.42 on Monday, adding on to the stock’s 2.27% weakening in the past seven days.

The transaction is however subject to precedent conditions that include central bank and other regulatory approvals, conclusion of an updated intercreditor agreement between Glencore, Triple Flag and the Industrial Development Corporation of South Africa as well as the conclusion of the linked offtake agreements with Glencore for the bulk concentrate for the Uppers and the copper and zinc concentrates for the Deeps.

The first tranche of the facility is constituted of $40 million while an amount of $210m has been set aside for the second tranche, including the potential for an early drawdown of up to $50m to facilitate works.

Glencore is also expected to secure “non-recourse funding from third parties to enable it to fund its prepayments” related to the second tranche of the facility.

“While PCZM is on the brink of construction, followed by production, our exploration and optimisation programs at the Okiep Copper Project are also progressing well, and the BHP Xplor program, announced last week, highlights the exceptional potential of our broader Northern Cape portfolio,” explained Lennox.

With the facility providing funding for the Uppers project development and partially funding Orion’s Deeps development at Prieska, the JSE listed company is now expected to transition into a fully operational and productive miner.

“We are pleased to have reached a binding agreement with PCZM and will work closely with Orion on the outstanding conditions,” said Toby Spittle of Glencore Copper Marketing.

“We are excited to be part of the restart of copper mining in South Africa's Northern Cape and look forward to a long future of working together.”

Key terms of the facility include Glencore receiving a market related return “that is consistent with transactions of this nature and which includes a step-down in the return rate once commercial production is declared”.

“Settlement of the Prepayment Facility occurs through the sale and delivery of bulk, copper and zinc concentrates from the Prieska Copper Zinc Mine in terms of the linked offtake arrangements,” said Orion Minerals.

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