African Minerals: After Glencore's Exit, New Investors Take Over the Zanaga Iron Ore Project in Congo

In the Republic of the Congo - Congo (Brazzaville), the first phase of the planned Zanaga Iron Ore Project is expected to produce 12 million tons of iron ore annually with an investment of 1.9 billion USD. The owner of the project, ZIOC, has been taking measures in recent months to push for the final investment decision.

ZIOC, a junior mining company headquartered in the British Virgin Islands, plans to sell its majority stake in the Zanaga Iron Ore Project in the Republic of the Congo.

The company announced on Tuesday, February 10, that it has signed a non-binding memorandum of understanding with the private equity investment company Red Arc Minerals (RAM) to sell up to 87.5% of the project's shares for 150 million USD. Previously, Swiss mining group Glencore was the main partner in the project, but after nearly a year, Glencore completed its exit.

Advancing the Final Investment Decision

Glencore had long held shares in the Zanaga project and gradually reduced its stake from 2022 to March 2025. About a year later, Red Arc Minerals stepped in to acquire a controlling interest. The company focuses on iron ore deposit development and was co-founded by Mick Davis, a British-South African businessman and former executive of Xstrata, a predecessor of Glencore. Xstrata merged with Glencore in 2013.

According to the memorandum of understanding, RAM will complete the share purchase in stages. A $25 million payment will secure a 20% stake in the Zanaga project. A second payment of $125 million is expected to be completed within 18 months, at which point RAM's total shareholding will increase to 87.5%. ZIOC will retain the remaining 12.5% stake and receive a 1% royalty on future mine revenues.

"I am pleased to announce the signing of a binding agreement [...] This transaction will provide the company with non-dilutive funding to advance the Zanaga project into the pre-production phase and make the final investment decision, significantly accelerating the company's growth strategy," said Martin Knauth, CEO of ZIOC.

For ZIOC, this transaction is expected to accelerate progress on the Zanaga project before the final investment decision (FID). The company plans to use the initial payment to complete front-end engineering design (FEED) studies and other work required to reach that milestone. Once the final investment decision is made, ZIOC will fund the construction according to its remaining shareholding proportion.

If finalized, given Red Arc Minerals' controlling position, it will bear most of the capital expenditures. The transaction still requires signing a final agreement and obtaining all necessary regulatory approvals, including approval from ZIOC shareholders. Both parties aim to finalize the terms of the transaction by May 31, 2026.

Up to 30 Million Tons of Iron Ore Annually

Red Arc Minerals has not yet detailed its strategic rationale for the transaction. The two companies have established contact through Heeney Capital, a private equity firm based in New York, which is an indirect shareholder of ZIOC and a co-founder of Red Arc Minerals. There are also questions about the project's management if the deal is completed.

If the agreement is reached, Red Arc will add a strategic mining asset to its portfolio, with an initial capacity of 12 million tons of iron ore annually, and the second phase can be expanded to 30 million tons per year. Initial construction investment is estimated at 1.94 billion USD, with a post-tax net present value (NPV) of 3.68 billion USD.

At this time, several new African iron ore projects are progressing to supply global markets. In Guinea, the large Simandou project has recently entered the development phase. In Gabon, Australian company Genmin is advancing the Baniaka project. Other countries, including Cameroon, are also developing new production bases. S&P Global predicts that due to the Simandou project, the global iron ore market is expected to experience a supply surplus by 2027, so it remains unclear how Zanaga will position itself.

Meanwhile, ZIOC continues to work to enhance its economic and strategic position. The company stated in August 2025 that it would revise the project's development plan to produce iron ore concentrate suitable for low-carbon iron pellet production. The test results related to this revised strategy have not yet been released, and future production purchase agreements have not been signed.

Source: ecofinagency

Original: toutiao.com/article/1856832333716560/

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