Arc Minerals said on Thursday that Anglo American will take majority control of its Zambia copper-cobalt exploration licences. It marks the first new investment by Anglo in Zambia in 20 years.
Under the deal, which was first reported by Reuters, Anglo will take 70% of a joint venture with Arc that will own licenses to explore Zambia's copper-rich North-Western province, an area that Anglo previously explored in the late 1990s.
Major mining firms are searching for new sources of the battery metals copper and cobalt, especially in the wake of the war in Ukraine and sanctions on Russia which has sent metal prices soaring.
Anglo American will pay $3.5 million into the joint venture upon signing. It will be able to retain its stake by spending $74 million on exploration within seven years of signing and making cash payments of $11 million into the JV, according to terms of the deal.
Arc Minerals previously had an exclusivity agreement with Anglo from July 2020 to July 2021, and when that lapsed Arc Minerals said it would start talks with other major miners which had approached it.
Zambia, Africa's second-largest copper producer, has become a more attractive investment proposition for mining companies since the election last August of business-friendly President Hakainde Hichilema and a subsequent mining tax reform.
The country aims to more than triple its annual copper output within the next decade to 3 million tonnes a year.