How to Buy Copper Cathodes in the DRC and Zambia

Who this page is for. Serious buyers and traders of copper cathodes targeting DRC and Zambia. Not legal or tax advice. All trades subject to KYC, sanctions, permits, and documentation.

How to Buy Copper Cathodes in the DRC and Zambia

Here is the truth. There is no pile of LME Grade A cathodes sitting in a local warehouse at a 10 percent discount waiting for you. Those offers are time wasters. Real supply is won by prefinancing production, locking offtake, and securing title with hard controls. Do that and you earn the margins you keep hearing about.

Structures: pre shipment finance • LC • UPAS • escrow Security: WRs • CMAs • assignment of proceeds • insurance Feed: brownfield • tailings and slags • greenfield pipeline

1) How buying really works

  • You prefinance a production run against a signed offtake and a delivery schedule.
  • Payment mechanics use LC, UPAS, or escrowed prepayment tied to milestones and assays.
  • Title transfer is defined at plant gate, bonded warehouse, or on shipment with serial control.
  • Discount to LME is your reward for providing working capital and certainty, not for chasing ghost stock.

2) Pre shipment financing mechanics

Element What good looks like
Facility Revolver or tranche sized to x weeks of production with clear draw conditions
Conditions precedent Permits, plant uptime records, feedstock plan, insurance, CMA, export readiness
Use of proceeds Power, reagents, feedstock, wages, logistics. No leakage to unrelated parties
Payment instrument Confirmed LC or UPAS for supplier settlement or escrowed prepayment with step downs
Repayment From cathode sales proceeds under assigned offtake or from LC draw at shipment

3) The security package that makes bankers say yes

  • Assignment of offtake proceeds and receivables with buyer notice.
  • Pledge over inventory and documents of title. Warehouse receipts in approved depots.
  • Collateral Management Agreement with a top tier surveyor controlling inflows and outflows.
  • All risk cargo and stock insurance with lender as loss payee.
  • Escrow waterfall for sales proceeds with automatic sweep to repay advances.
  • Step in rights if production misses milestones. Optional performance bond from the producer.

4) Where the cathodes come from

Source What you buy Why it matters
Brownfield plants Incremental runs from existing SX EW circuits Fastest to market. Clear uptime and reagent history
Tailings and slags Reprocessed material into cathode or intermediate Big advantage in DRC and Zambia. Many dumps with respectable copper grades and, in DRC, cobalt by product that improves economics
Greenfield pipeline Future offtake tied to capex schedule Longer lead times but deeper volumes. Use milestones and price adjustment

Tailings and slags are the near term edge. You underwrite metallurgy and throughput, then finance the working capital to turn waste into cash and copper. That is where disciplined buyers win access and price.

5) Commercial terms that actually clear

  • Specification LME Grade A or contract grade with agreed penalties and make good rules.
  • Price LME cash or 3M plus or minus a negotiated differential. Discount reflects prefinancing and risk taken.
  • Delivery EXW plant gate, FCA bonded warehouse, or FOB corridor port with named depots.
  • Documents assays, weight notes, permits, export declarations, and clean title chain.
  • Payment confirmed LC, UPAS, or escrow release against documents and surveyor sign off.

6) The playbook

  1. Screen producers for uptime, power reliability, and compliance. Prioritise plants with tailings access.
  2. Sign a short exclusivity window to run diligence and structure pre shipment finance.
  3. Lock the security stack. CMA in place, approved warehouses, insurance binders, escrow waterfall.
  4. Issue LC or fund escrow. Draws tied to metered output and surveyor releases.
  5. Control title and serials. Move metal on the chosen corridor and settle per schedule.
  6. Roll and scale. Increase volumes as KPIs are met and repayment stays clean.

7) Why prefinancing earns you the margin

Producers in the Copperbelt are capital constrained. You solve their working capital bottleneck and remove price and offtake uncertainty. In exchange you receive a structured discount to LME that covers your funding cost, operations, logistics, and still leaves real margin. No prefinance, no priority. The fake 10 percent warehouse bargains are bait for the inexperienced.

8) Buyer checklist

  • Producer KYC, permits, and environmental compliance.
  • Plant performance data. Uptime, recovery, reagent consumption, power contracts.
  • Tailings or slag feed plan with grades, volumes, and rights.
  • CMA, approved warehouses, and warehouse receipt template.
  • Insurance quotes. Cargo and stock with lender as loss payee.
  • LC or escrow documents with clear conditions and timelines.
  • Title and tax flow. Export and VAT steps mapped to each shipment.
  • Logistics route options. Keep a second corridor ready.

9) Pitfalls

  • Unsigned CMAs and loose depot control.
  • Paying advances without assignment of proceeds and escrow.
  • Unclear spec and assay dispute rules.
  • Overpromising volumes from untested tailings without metallurgical proof.
  • Chasing broker chains. Go direct to operator or a single accountable counterparty.

Want a bankable pre shipment facility, access to tailings backed supply, and clean title transfer

Request a Proposal Book a Consultation

Disclaimers

  • We advise and arrange. We are not your lawyer or tax advisor.
  • Trade terms vary by producer, route, and regulation. Confirm current requirements.
  • All transactions are subject to diligence, approvals, and final documentation.