A Zambian state firm has accused Abu Dhabi’s International Resources Holding of breaching agreements under which the Emirati company acquired control of the Mopani copper mining complex in early 2024.

ZCCM Investments Holdings Plc wrote to IRH unit Delta Mining Ltd. earlier this month outlining alleged financial and operational failures, according to a letter seen by Bloomberg News. The companies co-own Mopani Copper Mines through a joint venture in which Delta holds a 51% stake.

The letter indicates a deterioration in the relationship between the partners, since the landmark deal that represented IRH’s maiden investment. It gave the firm – the mining arm of a vast conglomerate headed by a senior member of the Abu Dhabi royal family – access to a large resource of one of the world’s most coveted metals.

At the same time, the fresh capital promised to revive the troubled Mopani assets and further Zambia’s ambitions to more than triple copper production. The letter ZCCM-IH Chief Executive Officer Kakenenwa Muyangwa wrote to Delta on Sept. 18 raised concerns about the progress of the turnaround project.

ZCCM-IH’s “preferred outcome remains an amicable resolution of all outstanding issues between the parties,” the CEO wrote. However, “in the absence of constructive and good faith engagement,” the state company “will not hesitate to invoke the full range of contractual rights and remedies available to it,” he said.

Zambian President Hakainde Hichilema met with Ali Rashed Alrashdi, IRH’s CEO, in Abu Dhabi on Monday, the head of state said in a post to his Facebook page.

Delta and IRH “maintain a strong and constructive relationship” with ZCCM-IH, IRH said. “As with any major partnership and complex operation, there may from time to time be shortcomings on either side or matters that require further discussion,” a spokesperson said by IRH is a subsidiary of International Holding Co., a sprawling $224 billion group chaired by Sheikh Tahnoon bin Zayed Al Nahyan, whose brother is president of the United Arab Emirates.

The firm bought its majority interest in Mopani from ZCCM-IH, in a deal that required IRH to pay $620 million in installments. The company also made shareholder loans which allowed Mopani to settle debts owed to the previous owner Glencore Plc.

ZCCM-IH has noted Delta’s “pervasive and sustained” instances of non-compliance with contractual agreements, which have “resulted in material additional costs and loss of revenue” to Mopani, according to Muyangwa’s letter.

The CEO cited “breaches around funding, including failures to make equity funding available as required and unapproved (high cost) related and third party debt being incurred.”More specifically, those “shortcomings” include spending only 20% of Mopani’s project development budget – $62.3 million out of $308.1 million – by the end of March, and appointing contractors lacking the “expertise and qualifications to perform” the relevant work. The letter referenced “significant operational underperformance” against the mines’ business plan, alleging that last year copper cathode output fell short by more than 50%.

Muyangwa also said in the letter that Delta’s payments into Mopani during 2025 were $61 million less than the minimum requirement, adding that ZCCM-IH “is not aware” of any transfers by the IRH subsidiary to fulfill its funding obligation of $140 million for this year.

Mopani operates two sites in Zambia’s Copperbelt province, including underground shafts, a smelter and a refinery. While the facilities produced only a little over 5,000 tons of copper cathodes in June, IRH officials have said they’re targeting rapid expansion to reach annual output of 300,000 tons in 2029.

Those volumes would transform Mopani into one of the biggest sources of copper on the planet, at a time when the outlook for global mine supply is constrained and demand is forecast to surge.

Glencore controlled Mopani until 2021 when ZCCM-IH acquired the long-unprofitable assets for $1 upfront. The Swiss commodity giant received more than $400 million from the company when IRH completed its takeover.

Muyangwa has asked Delta to “attend a consultation meeting,” while reserving all its available rights including to claim damages for losses and to commence arbitration proceedings, according to the letter.

IRH continues to address any issues with ZCCM-IH “constructively” through the “normal course of engagement between shareholders,” the company spokesperson said. Spokespeople for ZCCM-IH and Mopani didn’t respond to requests for comment.