Annual Report Summaries

Annual Report Summaries, Investee Companies

Lubambe Copper Mine Limited Extract from 2021 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenue of ZMW2.92 billion (US$148.60 million),[2020: ZMW2.15 billion (US$115.15 million)]. Over the same period, the Company recorded a loss of ZMW1.8 billion (US$91.38 million), [(2020: loss of ZMW1.58 billion (US$84.81 million)]. 

Lubambe’s road to recovery was a challenging one during the year as problems of poor ground conditions and high ore dilution persisted. Management was continually pursuing various remedial and corrective actions to address these challenges and has since engaged SRK consulting to undertake a review of the resource and devise favourable mining methods that will enhance recoveries from the ore body. 

During the year, Lubambe was carrying out additional work on the concept of the extension project by reviewing the initial work done and updating the mining method as well as reviewing the possibility of mining under the Lubengele tailings dam in preference to relocating and possibly processing the tailings. 

EMR capital, Lubambe’s majority shareholders begun a process to raise up to US$100 million in fresh capital during the year to improve liquidity and fund preliminary works on the extension project. 
Annual Report Summaries, Investee Companies

Konkola Copper Mines Plc Extract from 2021 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 relying on third-party copper concentrates to feed its Smelter and therefore low production volumes. 

ZCCM-IH was successfully granted a court order to appoint a provisional Liquidator to have full control over the operations of the mine. A key mandate of the Provisional Liquidator was to source working Capital for sustenance of operations for KCM. The liquidator on behalf of KCM engaged ZCCM- IH as a shareholder to help find and source working capital for sustenance of operations, out of which KCM signed a metal Prepayment Agreement with Trafigura, one of the largest copper traders in the world, where Trafigura was to pay KCM US$100 million upfront, which would be repaid by way of copper deliveries to Trafigura. The transaction was guaranteed by ZCCM-IH. 

KCM’s revenue for the year ended 31 December 2021 was ZMW27.32 billion (US$1.388 billion), [2020: ZMW19.21 billion) (US$1.031 billion)] compared to budget of ZMW18.67 billion (US$948.5 million). The Company recorded a loss of ZMW9.83 billion (US$499.33 million, [2020: ZMW3.595 billion net loss (US$193 million)]. 

There were no dividends declared during the year under review (2020: Nil). 
Annual Report Summaries, Investee Companies

Investrust Bank PLC Extract from 2021 Annual Report 

Over the twelve-month period ended 31 December 2021, the Bank’s financial performance indicated an improvement as compared to the prior period, with year-to-date operational profits of ZMW15.07 million (December 2020: Loss of ZMW57.58 million) The improvement is attributed to the Bank successfully implementing the principal initiatives in its turnaround plan and the ZMW286 million capital injection from ZCCM-IH. 

ZCCM-IH, alongside other key stakeholders in Investrust, have continued to make efforts to fully recapitalise the Bank in order to make it competitive and enable it to play its rightful role in the Zambian financial sector. 

The Bank’s share price on the Lusaka Securities Exchange closed the period under review at ZMW15 (2020: ZMW12). 

There were no dividends declared during the period under review (December 2020: Nil). 
Annual Report Summaries, Investee Companies

Copperbelt Energy Corporation Plc (CEC) Extract from 2021 Annual Report

During the year ended 31 December 2021, CEC reported total revenue of ZMW6.7 billion 

(US$342.52 million), [2020: ZMW6.9 billion (US$370.93 million)] and profit after tax of ZMW1.01 

billion (US$51.25 million), [2020: ZMW104.50 million (US$5.61 million)]. 

The Bulk Supply Agreement between CEC and ZESCO that expired on 31 March 2020 was 

renewed after the year end on 7 April 2022. This delay negatively impacted the business’ margins 

and performance. Nonetheless, CEC proved to be a resilient business and continued to thrive 

and diversify its operations in spite of the challenges faced. 

Further, CEC successfully contested Statutory Instrument (SI) No.57 of 2020 that declared its 

transmission and distribution lines common carrier. This declaration was quashed by the High 

Court but was later replaced by SI No. 24 of 2021. The court did not pronounce itself on the said 

SI, as the new government took the decision to repeal the SI number 24 of 2021, this action has 

fully restored CEC property and commercial rights over its power infrastructure. 

For the year under review, the CEC share price opened at ZMW1.10 per share and closed 

at ZMW1.95. The Company declared and paid a dividend of US$37.375 million with ZCCM-IH 

receiving US$9 million (2020: US$8.2 million). 
Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MCL) Extract from 2020 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW4,392.69 million (US$ 235,781million) for the period under review [2019: ZMW2,140.07 million (US$160.97 million)] and had profit after tax of ZMW1,466.08 million (US$78.69 million), [(2019: ZMW601.06 million (US$45.12 million)].  

During the period under review, MCL continued to experience liquidity challenges because of late receipts of payments from ZESCO. Due to liquidity constraints, the company was negatively impacted on its ability to undertake repairs and proactive maintenance of the Thermal Power Plant. Consequently, the company shut-down one of its two plants temporary during the period under review. Power production was thus negatively impacted due to lower plant availability. However, MCL recorded higher profits during the year under review because MCL recorded a net tax credit of US$2.31 million compared to net tax expenses of US$45.00 million in 2019.  

However, it is expected that the company will have a positive outlook in the medium to long-term once the issue 

of non-receipt of payments from ZESCO is resolved.  

There were no dividends declared during the year under review (31 Dec 2019: Nil).  
Annual Report Summaries, Investee Companies

Mushe Milling Company Limited Extract from 2020 Annual Report

In September 2019, ZCCM-IH Plc and Multi Invectec Solutions (“Multi Invectec”) executed a Share Purchase Agreement (“SPA”) which saw ZCCM-IH acquire 100% shareholding in Mushe Milling Limited. Mushe Milling Limited (MML) earned a total of ZMW 107.46 million in revenue for the year ended 31st December 2020 (31 December 2019: ZMW36.69 million). MMCL recorded a net loss of ZMW36.58 million (31 December 2019: ZMW12.63 million loss).  
Annual Report Summaries, Investee Companies

Chibuluma Mines Plc Extract from 2020 Annual Report

Following the sale of Chibuluma South Crown Pillar Mine, Chibuluma Mines could not sustain operations with ore from Chifupu Underground Mine alone. Therefore, the Chibuluma Mines Plc Board, Metorex Executive Committee and Jinchuan Group Limited, jointly resolved to place the operations of Chibuluma Mine Plc under care and maintenance with effect from 1 July 2020. All Chibuluma Mine employees were consequently declared redundant with only a few re-employed on short-term contracts for the care and maintenance period.  

In September 2020, in order to assess the viability of re-opening Chifupu Mine, Chibuluma Mines engaged Integrated Geological Solutions of South Africa (IGS) to conduct an evaluation of the Chifupu Mine resources and reserves.  

This indicated that the current resources amount to 3,118,000 tonnes of Copper Ore, with an average Grade of 2%, containing 65,478 tonnes of Copper metal. And recoverable reserves of 1.346 million tonnes of Copper Ore, with an average grade of 1.83%, containing 24,592 tonnes of Copper metal. Subsequently, Chibuluma Mines in conjunction with Metorex (Pty) Limited engaged the services of Ernest and Young (EY) to conduct a valuation of Chibuluma Mines Plc including the reserves at Chifupu Mine and the assets at the processing plant.  

The EY valuation report indicated that based on current mining costs and current (forecast) Copper prices, re-opening Chifupu Mine operations would result in an overall loss of USD 28 million over the 5-year period to 2025.  

No dividends were paid for the financial year ended 31st December 2020 (December 2019: nil).  
Annual Report Summaries, Investee Companies

Lubambe Copper Mine Limited Extract from 2020 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenue of ZMW2,145.18 million (US$115.15 million) for the year ended 31 December 2020 [December 2019: ZMW997.12 million (US$ 74.85 million)]. The loss for the year was at ZMW1,580.03 million (US$84.81 million) US$28.34 million [2019: ZMW871.68 million (US$65.44 million)]  

During the year under review, ZCCM-IH continued to engage with Morgan Stanley regarding EMR’s intention to offer some equity to new partners. The ZCCM-IH Board approved Lubambe’s additional US$25 million loan from Trafigura, bringing Lubambe’s total indebtedness to $75 million.  

Dividends declared and paid during the year amounted to nil (December 2019: nil).
Annual Report Summaries, Investee Companies

Kariba Minerals Limited (KLM) Extract from 2020 Annual Report

For the period under review, Kariba Minerals Limited (Kariba) reported total revenues of ZMW12.44 million (2019: ZMW4.18 million) with a net loss of ZMW11.19 million (2019: ZMW48.64 million profit).  

During the period under review, ZCCM-IH provided an extension on the USD550,000 cash cover for Kariba’s USD500,000 working capital facility with Investrust Bank Plc. The facility was set to expire during the period under review, and KML requested for the extension of the facility for an additional 12 months. This was requested due to challenges the business faced during the financial year caused by the adverse effects of the Covid-19 pandemic and the suspension of exports for a prolonged period.  

There were no dividends declared during the year under review (December 2019: Nil).