Katanga Mining, a copper and cobalt producer, and Glencore Finance, a subsidiary of Glencore International – the diversified natural resources company, have completed the previously announced mandatorily convertible loan facility of about $265.3 million underwritten by Glencore. This follows the approval by Katanga’s shareholders of the increase in the authorised share capital of the company. Funding from the facility is available immediately and is accessible to the company’s joint-venture subsidiaries – Kamoto Copper and DRC Copper and Cobalt Project as well as Katanga – to meet immediate financing requirements. Glencore has advanced the entire $100 million principal amount under the facility.

Katanga, in consultation with Glencore, is seeking participations in the facility from existing eligible shareholders and new investors, up to an aggregate amount not exceeding 75% of the facility as of today’s date i.e. $198.975 million. To the extent that Katanga receives commitments from eligible shareholders and new investors to participate in the available facility amount, such shareholders and new investors will, on the second closing date receive a transfer of its proportional interest in the facility from Glencore. This date is expected to occur on February 9, 2009, but may occur on an earlier date if valid commitments have been received from investors in respect of the entire available facility amount or if otherwise agreed between the Katanga and Glencore.

In addition to the facility, the company will require additional equity and/or debt finance in the amount of about $250 million during the first six months of 2009. Commenting on the completion of the facility, Hugh Stoyell, Non-Executive Chairman, Katanga Mining said: “Given such difficult and unprecedented conditions in the capital and commodities markets, we appreciate that Glencore has stepped in to provide a lifeline of financial support enabling Katanga to continue in the near-term. The management team and board will continue to actively seek the participation of eligible investors by the second closing on 9th February. These are challenging times for the company but we remain confident that existing shareholders and new investors will recognise the long-term value and prospects of our core asset base”.