Orion Minerals’ subsidiary Prieska Copper Zinc Mine (PCZM) has concluded a binding prepayment agreement with a unit of Glencore for a $250m prepayment facility linked to the sale of bulk copper and zinc concentrates from the Prieska project in the Northern Cape.
Orion, which is developing two copper and zinc assets in the Northern Cape, said on Monday that the facility will fund the Uppers development and partially fund the Deeps development at Prieska, “marking a significant step in Orion’s transition to a fully operational company”.
The financing deal was initially announced in September last year.
The Northern Cape has become a focal area as untapped copper reserves garner growing attention from international investors.
Demand for copper is expected to increase by 40% by 2040, spurred by industrialisation and growing demand from data centres and electric vehicles, while the fear that US President Donald Trump will impose tariffs on the metal weighs on prices.
Surging demand for the metal means mega miners are scrambling to secure their supplies, with few new mine discoveries.
“This is a landmark agreement for Orion. Tranche A will fund the Uppers development, while the early drawdown of Tranche B will allow us to start work on the Deeps,” said Orion MD Tony Lennox.
“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. Consequently, first concentrate is now expected at the end of [the first quarter of] 2027,” he said.
“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’s copper marketing division. “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.”
Glencore is the second global miner to show confidence in Orion’s projects. Last week, BHP, the world’s largest listed miner, announced it would form a joint venture with Orion to advance the group’s copper and zinc exploration programme in the Northern Cape — part of a larger partnership with early-stage explorers around the world.
Orion was given a $500,000 cash injection to fund further exploration, opening the door to more investment in the region. It is the first South African operation to be included in BHP’s cohort.
BHP chief exploration officer Tim O’Connor said the project is still in “very early days”, but Orion’s leadership and approach to exploring new reserves in a well-established mining area had caught the group’s eye.
“There’s been a significant deficit in large discoveries, particularly over the past 15 years,” O’Connor told Business Day.
“The industry is not finding sufficient resources of grade and quality to underpin the longer-term demand that many of us see.”
“At the end of it, if the project continues to hold up and has the scale that is relevant to a company like ours, we will progress it with a more traditional exploration earn-in. Those tend to be worth around $10m-$20m, and we would fund the work programme directly thereafter.
“To be clear, we don’t know if that would work here. But [Orion] is taking a well-known area but looking at it through a new lens with new ideas, which is exciting to us.”
The behemoth’s joint venture with Orion comes as the latter has reported widening losses in recent years while pouring cash into its costly PCZM and Okiep Copper projects. These projects, which already have development plans in place, are excluded from the venture.
By bringing PCZM and Okiep to first production in the coming years, Orion aims to grow production to more than 50,000 tonnes a year by the decade’s end.
In previous decades, Okiep consistently produced 30,000-40,000 tonnes of copper a year under the ownership of Newmont and Gold Fields.
“While PCZM is on the brink of construction, followed by production, our exploration and optimisation programmes at the Okiep Copper Project are also progressing well, and the BHP Xplor programme, announced last week, highlights the exceptional potential of our broader Northern Cape portfolio. Orion is at one of the most exciting stages of its growth journey,” Lennox said on Monday.
- With Jacob Webster.
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