Annual Report Summaries

Annual Report Summaries, Investee Companies

Kansanshi Mining Plc (Kansanshi Extract from 2023 Annual Report

The principal activities of the mine includes mining, prospecting for minerals and processing of ore in Solwezi area of North Western Province. The key notable occurrences in 2023 were:  

 The successful conversion of ZCCM-IH’s dividend right in KMP to a 3.10% Life of Mine Royalty Right. This will ensure that ZCCM-IH’s cashflows are more stable and predictable going forward.  

 KMP implementation of the S3 Expansion project commenced. The S3 Expansion is a significant $1.5 billion investment by First Quantum Minerals aimed at extending the mine’s life into the 2040s, enhancing its production capacity, and generating employment opportunities. It includes expanding the mining pit, upgrading the fleet, and enlarging the processing plant and smelter. This expansion is pivotal for adding value within Zambia and contributes to the nation’s goal of increasing mineral processing locally and aiming to maximize the mine’s output and efficiency, thereby contributing to local economic development and job creation. Completion is anticipated by mid-2025.  

For the year ended 31 December 2023, Kansanshi recorded revenue of ZMW32.30 billion (US$1.57 billion) (2022: ZMW25.98 billion US$1.52 billion). Net profit over the period reduced to ZMW343.83 million (US$16.75 million) from ZMW 2.62 billion (US$153.93 million) in 2022. The geological and hydrological challenges at Kansanshi continued to affect average grades which were at 0.6% in 2023, significantly affecting the amount of copper and gold recovered.  

Royalties received in 2023 were ZMW1,200.19 million (US$56.13 million) and dividends received were ZMW170.74 million (US$9.05 million). 
Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MEL) Extract from 2023 Annual Report

In 2023, significant developments were observed at Maamba Collieries Ltd (MCL), particularly around the Maamba Power Station and its coal mining operations. MCL operates a modern Coal Handling and Processing Plant (CHPP) that facilitates the production of different coal products with consistent quality. Since its privatization in 2010, MCL has made significant improvements in managing coal dumps to mitigate air pollution caused by spontaneous combustion in the overburden dumps. These efforts in environmental management have been recognized through awards from the Zambia Environmental Management Agency (ZEMA) .  

Maamba Collieries Limited (MCL) reported total revenue of ZMW5.00 billion (US$243.69 million) for the year ended 31 December 2023 (2022: ZMW4.75 billion (US$278.68 million)) and had a profit after tax of ZMW2.57 billion (US$125.04 million) (2022: profit of ZMW1.53 billion (US$89.95 million).  

In 2022, ZESCO, Zambia’s state power utility, reached a settlement in international arbitration with Maamba Collieries Ltd to pay $518 million by August 2024 to settle outstanding arrears for power supplied. This settlement follows arbitration in London where both parties agreed on the terms for resolving the debt. According to the agreement, ZESCO will discharge the arrears in tranches by August 2023, after adjusting for a cash discount of $60 million extended by Maamba. The settlement was reached amicably to address overdue power purchase bills while ensuring that monthly payments for power sales from May 2022 are fully paid to Maamba. As at the year ended 31 December 2023 the outstanding debt from ZESCO to Maamba was USD323.18 million (2022:US$539.93 million).  

The Maamba Power Station, fuelled by low-grade coal from MCL’s Maamba mine, plays a crucial role in Zambia’s energy sector. Currently, the station has two operating units, each with a capacity of 150 MW, commissioned in 2016. There is potential for expansion, with plans to add two more units, each also with a capacity of 150 MW, to meet the growing electricity demand in the country. This expansion, projected to cost around US$400 million, would potentially double the station’s output to 600 MW.  

Maamba Collieries has also explored the possibility of increasing the power station’s capacity to 600 MW to support Zambia’s ambition to become an electricity hub in the region. A technical feasibility study for the expansion was completed, and MCL is seeking third party funding for the project. These developments indicate MCL’s commitment to enhancing energy production capabilities in Zambia, contributing significantly to the national grid and supporting sustainable energy security in the region.  

During the year, Maamba undertook semi-annual maintenance on unit 1 of the 150 MW thermal power units between 4th August 2023 to 17th August 2023. Unit 2 underwent semi-annual maintenance between 25th March 2023 and 7th April 2023 as well as forced shut  
Annual Report Summaries, Investee Companies

Mopani Copper Mines Plc Extract from 2023 Annual Report

For the year ended 31st December 2023, Mopani Copper Mines (MCM) recorded cumulative net revenue of ZMW11.55 billion (US$562.87 million), (2022: ZMW11.85 billion (US$695.25 million)). The net loss for the year under review was ZMW8.96 billion (US$435.29 million) (2022: ZMW5.05 billion (US$292.55 million)).  

During the year under review, MCM produced a total of 65,602 tonnes of finished copper (2022: 72,694 tonnes). The lower production during the year under review was mainly due to low equipment availability, and limited ore sources to mine due to delayed development. In addition, there were multiple outages of the fixed plants across all shafts.  

After the year ended 31 December 2023, ZCCM-IH achieved a significant development on Mopani involving a new partnership and an investment that marks a transformative chapter for Zambia’s mining sector and its economy at large. Zambia selected the United Arab Emirates’ International Resources Holdings (IRH), a unit linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC), as the new strategic equity partner for Mopani Copper Mines. This partnership is aimed at investing funds into Mopani to help with short-term working capital and finance the completion of the mine development to unlock its long-term potential. Additionally, this move is expected to restructure the Mopani’s balance sheet and increase copper production to at least 200,000 metric tons per annum in future.  

In 2024, ZCCM-IH has a 49% equity stake in Mopani Copper Mine, with IRH through its subsidiary Delta Mining Limited (Delta) holding a 51% equity stake after an initial investment of US$1.1 billion was made. This agreement included financing MCM’s Project Development Plan (PDP) by providing working capital and restructuring certain existing Glencore liabilities. A new Board of Directors reflecting the revised shareholding structure has been established, and further capital has been made available as shareholder loans based on future working capital requirements.  

There were no dividends declared during the period under review (December 2022: Nil)
Annual Report Summaries, Investee Companies

Copperbelt Energy Corporation Plc (CEC) Extract from 2023 Annual Report

Copperbelt Energy Corporation PLC (the “Company”) is incorporated in Zambia under the Zambia Companies Act as a public limited Company and listed on the LuSE. The Company and its subsidiaries (together “the Group”) is involved in power generation, transmission, distribution, supply, and professional football through its Club subsidiary.  

Key milestones noted during the year:  

 CEC commissioned the 34 MW Solar PV plant at our Riverside location in Kitwe and commenced with the evacuation of power into the grid. In addition, CEC commenced the implementation of the 60MW Solar PV plant located at Itimpi in Kitwe. All this is in line with the green growth agenda and comes alongside technological improvements to the transmission network. The combined capital investment made for the Riverside and Itimpi Solar plants was US$75 million.  

 Copperbelt Energy Corporation (CEC) has also initiated Zambia’s first green bond program to raise $200 million on the LuSE for further investment in solar and other renewable energy generation projects. Through the Green Bond, CEC’s subsidiary, CEC Renewables raised US$454 million in the oversubscribed first tranche of the bond program, and this expected to anchor CEC’s green energy generation ambitions.  

For the year under review, CEC reported total revenue of ZMW7.85 billion (US$382.27million), (2022: ZMW6.38 billion (US$374.449 million)) and profit after tax of ZMW2.83 billion (US$137.65 million), (2022: ZMW866.41 billion (US$50.82 million)). Further, the CEC share price opened at ZMW3.78 per share and closed at ZMW7.09.  

The Company declared a dividend of US$ 55.25 million with ZCCM-IH receiving US$14.59 million (2022:US$10.3 million).
Annual Report Summaries, Investee Companies

Konkola Copper Mines Plc (KCM) Extract from 2023 Annual Report

KCM’s challenges continued during the year as the fundamental problems surrounding the underdevelopment of the Konkola Deep Mining Project (KDMP) remained unresolved, resulting in the Company reporting low production from own sources and therefore having to rely on third-party copper concentrates to feed its Smelter. As a result, finished copper production was also negatively impacted.  

The Provisional Liquidator continued to have full control over the operations at KCM and the Company continues to face financial challenges and is currently unable to produce sufficient output to support its operations. On 5th September 2023, the Government of the Republic of Zambia announced that it had reached an agreement with Vedanta Resources Limited to resolve all outstanding disputes and Vedanta committed to investing US$1.27 billion towards working capital and mine development at KCM.  

Following the announcement made by GRZ, ZCCM-IH and Vedanta have entered into various agreements which are intended to pave way for the settlement of outstanding creditors, vacation of the Provisional Liquidator and finally the reinstatement of the Board of Directors at KCM.  

There were no dividends declared during the year (2022: Nil). 
Annual Report Summaries, Investee Companies

Kabundi Resources Limited Extract from 2023 Annual Report

Kabundi Resources Ltd, established in May 2019 by ZCCM-IH, operates in the Central Province of Zambia focusing on manganese mining. Since beginning operations in May 2020, it has aimed for a production expansion, currently running two wash plants with capacities of 1,200 tonnes per day (8-hour shift) and 150 tonnes per hour. The ore grade averages about 45% manganese. A total of 2,325 tonnes of manganese was produced during the year ended 31st December 2023.  

Future plan includes establishing a manganese plant with a capacity of 60,000 tonnes per annum over three phases and developments in the Company’s manganese mining activities.  

For the year ended 31 December 2023, Kabundi Resources Limited reported total revenues of ZMW1.1 million (2022: ZMW 13.64 million) with a net profit of ZMW3.85 million (2022: net profit of ZMW 5.5 million).  

There were no dividends declared during the year (2022: Nil). 
Annual Report Summaries, Investee Companies

Mushe Milling Company Limited Extract from 2023 Annual Report  

Mushe Milling Ltd, initially acquired by ZCCM-IH in 2019, is undergoing liquidation as it is deemed not to be of strategic fit following a refocus to invest in mining and energy related investment in ZCCM-IH’s revised 2020-2026 strategic plan. The liquidation proceedings of Mushe Milling Limited (MML) began in July 2023 following the appointment of the office of the Official Receiver as liquidator.  

The liquidation of MML was still underway as at the end of the year. 
Annual Report Summaries, Investee Companies

Investrust Bank PLC Extract from 2023 Annual Report

Investrust Bank Plc is a financial institution in Zambia, and operations span across Zambia with a comprehensive network of branches.  

Investrust recorded an income of ZMW 202.8 million (2022: ZMW164.25 million). Investrust reported a net loss of ZMW758.18 million (2022: Loss of ZMW2.6 million).  

On the Lusaka Securities Exchange, the Bank’s share price closed at ZMW 25, maintaining the same level as in 2022.  

On April 2, 2024, the Bank of Zambia (“BoZ”) took possession of Investrust Bank Plc (“Investrust”). The possession of Investrust by BoZ was necessitated by its insolvency. On 24 April 2024, the Bank of Zambia cancelled the shareholding of ZCCM-IH in Investrust.  

There were no dividends declared during the period under review (December 2022: Nil).  
Annual Report Summaries, Investee Companies

Zambia Gold Company Limited (ZGC) Extract from 2023 Annual Report

The Zambia Gold Company Limited (ZGCL) has a significant role in the Zambian gold sub-sector, with a mandate that spans across the country to foster the formalisation and growth of this sector. ZGCL engages in various stages of the gold value chain, encompassing activities such as gold exploration, production, mine development, processing, and the marketing of gold both within Zambia and internationally. This comprehensive involvement is aimed at enhancing the gold sub-sector’s contribution to the Zambian economy and ensuring sustainable development and growth within this industry.  

Zambia Gold Company is in its start phase, and for the year under review, it did not produce any gold due to the continued suspension of mining activities at Kasenseli by the Mines Safety Department which is the main source of gold production. The sale of gold in the period under review was from stock held since 2021 and was used to finance operations of the company. ZGC continues to engage key stakeholders to reopen the mine in 2024. ZGC shall continue conducting exploration activities on its other licences and partnership with third party licence holders. Zambia Gold Company Limited (ZGC) reported revenue of ZMW 38.52 million (2022: ZMW 0.03 million) for the year ended 31 December 2023. During the period under review, the company sold 33.9 Kg of gold from Kasenseli production and trades conducted at ZGC headquarters compared to no sales in 2022. Net loss recorded for the year was ZMW 23.35 million (2022: ZMW 51.57 million loss).  

There were no dividends declared during the year under review (December 2022: Nil). 
Annual Report Summaries, Investee Companies

Chibuluma Mines Plc Extract from 2023 Annual Report

Chibuluma remains on lease to LC & Y with no operations of its own as the life of mine has been depleted. The company received a total of US$ 0.26 million in royalty revenue against a budget of US$ 0.23 Million. The company is currently exploring potential areas that would be deemed viable for renewed mining and has engaged Kobold Metals of the USA to apply their advanced Artificial Intelligence technology to enhance chances of discovery.  

There were no dividends paid during the year under review (2022: Nil).