Investee Companies

Investee Companies, Investee Company News

KARIBA MINERALS LTD EXCEEDS EXCEED OUTPUT TARGET

Easing of COVID restrictions sees firm producing 1, 600 tonnes of amethyst

Kariba Minerals Limited (KML) produced 1, 600 tonnes of amethyst last year against a target of 1,200 tonnes following relaxation of coronavirus restrictions in China and India.

The company, which is a subsidiary of ZCCM- Investments Holdings (ZCCM-IH) has been operating for over 60 years, producing over 90% of amethyst in Mapatizya and Sinazongwe in Southern Province.

ZCCM-IH corporate affairs manager, Loisa Mbatha said in a statement of Friday that COVID-19 affected the company’s sales, which fell by 50% in 2020.

“However, by 2021, markets in Asia, in particular China and India, started opening up and the company started exporting in the fourth quarter of 2021 resulting in an increase of production last year,” Ms Mbatha said.

KML recently expanded its value-addition projects to include gemstone cutting and polishing such as cabochon, facets, carvings, beads and gemstone trading.

Ms Mbatha said plans are in the pipeline to open a jewellery retail store and firm has secured an outlet at Kenneth Kaunda International Airport in Lusaka.

KML is also manufacturing amethyst stone tops such as kitchen tops, tabletops, tiles, and tombstones, among others.

It has commenced local sales for low-grade amethyst which has created over 150 jobs.

Ms Mbatha said KML is also creating opportunities by partnering with local mine licence owners to increase production and supply to international markets.

 

 

 

 
Investee Companies, Investee Company News

BOZ BUYS GOLD WORTH K345M FROM KANSANSHI COPPER MINES

THE Bank of Zambia (BoZ) has procured 282.79 kilogrammes (kg) of gold at a cost of K345.6 million from December 2020. Gold weighing 195.95 kg was bought from Kansanshi Copper Mines at the cost of K241.8 million, while 86.84 kg was purchased from Zambia Gold Company, a subsidiary of ZCCM-IH at the cost of K103.8 million.
This is according to the Ministry of Finance and National Planning in its response to online questions on gold purchasing released recently.
Investee Companies, Investee Company News

ZCCM-IH SHAREHOLDERS ENDORSE 90% ACQUISITION IN ZAMBIA’S MOPANI

LUSAKA (Reuters) – Shareholders in Zambia’s ZCCM-IH have overwhelmingly supported its acquisition of a 90% stake in Mopani Copper Mines (MCM), the state-owned mining investment firm said on Wednesday.

Glencore agreed the sale of its majority stake in Mopani to ZCCM-IH in a $1.5 billion deal, the miner and trader said in January.

The extraordinary general meeting vote on the resolution was the last condition towards the completion of the transaction and ZCCM-IH now holds 100% ownership of Mopani, ZCCM-IH said in a statement.

The deal is funded by borrowings from Carlisa Investments Corp – a British Virgin Islands-based company through which Glencore holds its stake – and other members of the Glencore group.

With increased ownership, ZCCM-IH would now be an active participant in the global industry as copper becomes a critical metal, ZCCM-IH Chief Executive Mabvuto Chipata said.

“Mopani will repay the remaining debt of $1.5 billion from its own cashflows and the repayment is expected to happen well within the remaining life of mine,” Chipata said.

Glencore said in a separate statement it would continue to retain offtake rights in respect of Mopani’s production.

ZCCM-IH has said it expects to find a new investor for Mopani by the end of the year as it looks to boost copper output from a little more than 34,000 tonnes to 150,000 tonnes.

 

Source: https://www.reuters.com/article/uk-mopani-copper-m-a-zccm-ih-idUSKBN2BN1UZ
Investee Companies, Investee Company News

CEC BACK TO BEING PROFITABLE

THE Copperbelt Energy Corporation Plc says it remains hopeful its 2021 net profits could almost double that achieved in the half-year period ending June 30 on account of a continued strong financial performance.

Since announcing its half-year results in September this year, where the utility earned a huge profit of around US $25.5 million in the period ending June 30, 2021, coming from a loss of $32.5 million in the prior period, CEC’s share price jumped from K1.40 per share in early September to K1.80 in trading sessions on the Lusaka Securities Exchange (LuSE) by the end of that same month.

Analysis from data made available on the company’s share chart shows that its share price peaked to an all-time high of K2.65 per share this month since going public on the local bourse back in
January, 2008, opening at K0.45 per share.

Market data availed by the LuSE revealed that the power utility’s share price has soared to K2.65 per share as at December 28, 2021, compared to just K0.96 per share 12 months ago. Commenting
on the strong share price performance posted by the utility this year, CEC chief financial officer Mutale Mukuka expressed confidence that the company’s performance on the local bourse would
continue in view of major developments that have occurred this year, such as the shift in segmentation of its biggest customer Konkola Copper Mines Plc, triggering significantly reduced
receivable impairment losses.

“I think that the share price or investors are essentially looking at the value that the business has posted to date. Secondly, they are also valuing the business and looking at the outlook. We are
coming from a situation where the business was posting impairment losses as a result of the KCM non-payment and to a larger extent, that was then tied to the SI Common Carrier status that the
business was given,” Mukuka said in an interview. “Now, with a change in segmentation from supplying power to transmission, use of system provision to that mine, that meant that we are not
taking the full credit risk for KCM and from a numbers point of view, it significantly reduced the level of impairment. So, with those levels of impairment coming off and reducing significantly to numbers below US $10 million, it meant that the business was back to being profitable just from an earnings perspective. So, moving from a loss position to being profitable once again. We hope that as we are getting to year-end, we could get to a number that probably is very close to double what we had at half-year. If you look at it from that perspective, then you are essentially looking at a very profitable business.”

He added that CEC’s consistent rewarding of dividends to its shareholders positively impacted investor sentiment in the company.

CEC declared a dividend to its shareholders amounting to 2.1 US cents per share for the 2020 financial year following an improved performance during the second-half of last year.

This was followed-up with an interim dividend of 2.3 US cents per ordinary share this year, which translated to K0.3727 per share following its half-year profits.

“The second issue is that the business itself is a dollar business. Most of the businesses that we see around have a kwacha exposure. If you look at it from a dollar perspective, their income is not
dollar-based. Now, in this instance, the income itself is dollar-based, which means that when you are valuing this business, it’s a business that is valued in dollars, then you apply the exchange rate.
So, to some extent, the valuation that investors are applying also have some assumptions around the effects; what sort of exchange rate are they applying?” Mukuka said. “The third issue when you
look at it from a performance perspective is the fact that this is a business that has consistently rewarded its shareholders with a return in form of dividend. And if you look at the dividend payments over the years, it’s something that has been growing over the years, and the growth has been reasonably okay if you compare to what other investment options that investors are looking at. So, just based on that, I think these are the sort of drivers that have impacted on the share price.”

And Mukuka explained that Zambia’s mining sector, which now has a positive policy direction and outlook, also influenced the company’s share price performance.

“…The business is largely linked to mining in Zambia. If you look at the policy direction of the mines that the government has put up, it is an ambitious plan to get to three million tonnes (of copper) in the next decade. If that is growing, it means that most of the suppliers to the mines, CEC included, they have to grow with that ambitious plan. So, if you are looking from outside, you are essentially looking at all these factors: the current things that have happened and then, going forward, what are the things that will happen that will impact positively on the business,” he said. “I think for most of the businesses, not just CEC alone, the environment is right, and the policy direction is that we need to push and grow the economy. Now, as the economy is growing, which sectors are contributing to the growth? My expectation is that if mining is growing, then all the suppliers are growing, CEC will grow. So there is quite a lot of optimism in that area.”

Meanwhile, Mukuka welcomed the recent appointment of renowned energy expert and proprietor of Petrotech Oil Corporation Limited, Reynolds Bowa, as the Energy Regulation Board (ERB) board chairperson.

Bowa, up until last year, was a non-executive director on the board of Copperbelt Energy Corporation Plc, representing ZCCM-IH.

“Mr Bowa was our vice-chair. He has a lot of expertise in the energy sector having been part of the Oil Marketing Companies (OMCs). Subsequently, he owned his own. And his expertise where he worked with CEC and others, I have no doubt that he’s got what it takes to be part of the team that regulates this sector. So, we can only wish him well and look forward to them pushing the sector forward. Overall, it’s a very good competent team, which we look forward to working with,” said Mukuka.
Investee Companies, Investee Company News

VEDANTA STILL NOT IN CHARGE OF KCM ASSET; SHACHINDA SETS RECORD STRAIGHT

Konkola Copper Mines Plc remains under the management of the Provisional Liquidator, according to an official statement from the mining company.

“Konkola Copper Mines Plc (“KCM”) remains under the management and control of the provisional liquidator, pursuant to the Court Order dated 21st May 2019”, read a statement issued by General Manager Corporate Affairs Shapi Shachinda on 10th December 2021. “We note a Vedanta Resources Holdings (“Vedanta”) statement dated 7th December 2021 which seeks to give the impression that they have regained management control of the KCM asset”.

According to a media release attributed to Vedanta, Dr Moses Banda was announced as the Spokesperson of Vedanta in Zambia. “Vedanta Resources Holdings Limited and its parent, Vedanta Resources Limited is pleased to announce that Dr Moses Banda, Vedanta’s Country Director as the official spokesperson in Zambia”.

“Dr Banda is a prominent voice Vedanta is extremely pleased to have Dr Banda’s experince on board to focus on rebuilding KCM, protecting 12,000 jobs in KCM and looks forward to engaging with the Zambian communities”, further read the statement.

However, “Members of the public are advised to disregard this deliberate attempt to mislead the nation”, in a rebuttal to the aforementioned statement by Shachinda. “Vedanta remains uninvolved in the running of operations at KCM”.

Sensing that the Vedanta statement may cause concern amongst key stakeholders, Shachinda further stated that “they appealed to all KCM employees, labour unions representing KCM employees, KCM Creditors, Contractors and Suppliers as well as the Company’s business partners and other key stakeholders to remain calm”.

Further Cautionary Announcement from ZCCM IH as at 28th July 2021

The following is an extract of the SENS announcement published in July this year regarding the matter from ZCCM IH’s Company Secretary Chabby Chabala on behalf of the Board of ZCCM IH regarding the Arbitration matter.

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019 concerning the following:

  • ZCCM-IH filing a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”) and the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”);
  • The legal proceedings commenced by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”) against ZCCM-IH on 2 July 2019 in the High Court of South Africa;
  • Vedanta’s applications to the High Court of Zambia to stay the liquidation proceedings and refer the matter to arbitration.

The South African proceedings were pursuant to the Arbitration proceedings which were yet to be commenced and were eventually commenced by Vedanta against ZCCM-IH on 31 July 2019. The Arbitration proceedings (which are confidential as between the parties) are underway and yet to be finally resolved. Shareholders, are however, advised that on 7 July 2021 the Sole Arbitrator made a Partial Final Award (“the Award”). The Award was in some parts in favour of ZCCM-IH and in some parts in favour of Vedanta. The Award has no effect on ZCCM-IH’s application for leave to appeal against the decision of the Court of Appeal announced in ZCCM-IH’s further cautionary announcement of 23 June 2021. Further, the Award has no effect on the position of the Provisional Liquidator, who remains in office.

ZCCM-IH will provide details on this matter in due course.

In the meantime, Shareholders of ZCCM-IH are advised to exercise caution when dealing in securities of the Company until further information is published. 

By Order of the Board

Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 28 July 2021

 

Source: https://fizambia.com/vedanta-still-not-in-charge-of-kcm-asset-shachinda-sets-record-straight/
Investee Companies, Investee Company News

MINISTER OF MINES EYES ‘SOUND SOCIAL CONTRACT’ BETWEEN KASENSELI GOLD MINE AND COMMUNITY

Zambia’s Mines and Mineral Development Minister has advised key stakeholders that progress on the reopening on Kasenseli Gold Mine in Northwestern Province was progressing well with one of the key issues that was being addressed being having in place a ‘sound social contract’ with the community around the mine.

Paul Kabuswe was quote in the Times of Zambia, 13th December 20221 edition, saying that “he was meeting Chief Chikwika in the third week of December 2021 as well as other key stakeholders to structure a workable mining plan for the mine”.

In October this year, the Minister suspended operations at the mine following a number of security and safety issues that had arisen since the mine’s commencement of exploration activities following their move on site in April 2020.

Furthermore, according to the same issue of the Times of Zambia, Chief Chibwika was cited as requesting for the mine to be shutdown.

This shutdown has derailed the Central Bank’s purchases of gold. According to the Zambia Business Times, “The Bank of Zambia has been purchasing dore gold from Kasenseli Mine since December 2020, through the Zambia Gold Company and refined gold from Kansanshi Mine from January, 2021. The Bank has so far purchased 20,600 ounces of refined gold valued at US $37 million” in a statement from the Public Relations Department at Bank of Zambia.

The social contract alluded to requires a concerted effort on all key stakeholders as there will be expectation management that will need to be implemented. It has been noted that the community does feel that they need to ensure that they rip the benefits of having gold deposits in their area. However, ZCCM IH has been mandated to over see the structuring of progressive agreements that will ensure that there is a pathway to structured mining deals in Zambia that have the potential of scaling up to world class entities.

 

Source: https://fizambia.com/minister-of-mines-eyes-sound-social-contract-between-kasenseli-gold-mine-and-community/
Investee Company News

CONTINUED SUSPENSION OF KASENSELI GOLD MINE PUTS CENTRAL BANK’S GOLD RESERVE BUILD-UP IN JEOPARDY

The new Mines Minister Paul Kabuswe’s continued suspension of the Kasenseli gold mine operating license, and thus mining activities, from late October 2021 put the central bank’s gold reserve build-up target for 2021 in jeopardy.

Since the gold-buying program began in January this year, the Bank of Zambia (BoZ) has spent approximately US$37 million on refined gold from First Quantum’s Kansanshi mine.

Kasenseli Gold Mine’s operations in Mwinilunga, North-Western Province, were halted after a Ministerial directive from the Minister of Mines and Minerals Development to do so to address concerns about the mine’s license conditions and safety regulations.

The ministry of mines did not give timelines for sorting out what was referred to as “concerns relating to Kasenseli Mine’s license conditions and safety regulations”. This continued suspension without timelines for re-opening will drag down the gold annual production for the country.

And the central bank – BoZ has confirmed that they will resume gold purchases from Kasenseli Gold Mine once its suspension is lifted. BoZ had purchased 283 kilograms of gold at a total cost of over K345 million from Kansanshi Mine and the Zambia Gold Company by the end of the first quarter of this year.

BoZ plans to purchase around 25,200 ounces of London Good Delivery gold from Kansanshi and 21,000 ounces of dore gold with a minimum of 88 per cent purity from Zambia Gold Company in 2021.

Responding to a ZBT inquiry, BoZ Assistant Director, Communications Besnat Mwanza confirmed that the central bank’s refined gold purchases from Kansanshi, an FQM subsidiary, had so far climbed to about US$37 million or K646 million compared to K345 million by the end of the first quarter.

“The Bank of Zambia has been purchasing more gold from Kasenseli Mine since December 2020, through the Zambia Gold Company and refined gold from Kansanshi Mine from January 2021. The Bank has so far purchased 20,600 ounces of refined gold valued at the US $37 million,” Mwanza said.

And she revealed that the central bank would continue to augment its reserves through gold purchases from Kasenseli Mine once the suspension is lifted. Kasenseli Mine is operated by Zambia Gold Company Ltd, a subsidiary of ZCCM-IH, a state-owned entity.

The concerns raised by the Ministry of Mines when suspending operations chiefly related to safety and security concerns, among others, was effective October 22, 2021, and has remained in force. No timelines have been given as to the issues that should be resolved as the minister of mines only indicated that until all issues highlighted in the Ministerial directive are closed out.

BOZ told ZBT that “In April 2021, the projection was to accumulate 21,000 ounces for 2021, but forecasts are dependent on levels of production. Because of this, this projection was later revised downwards as production levels declined later in the year. Targets are, therefore, based on the gold mined and if this declines or stops, gold purchases are impacted directly,” explained Mwanza.

When asked when BOZ would start buying from Zambia Gold Company, the Central bank stated that “Kasenseli Mine is under the regulatory supervision of the Ministry of Mines and details of its resumption would be best provided by the Ministry and ZCCM-IH. The Bank [BoZ] will continue to augment its reserves through gold purchases from Kasenseli Mine once the suspension is lifted. The Bank continues to buy gold from Kansanshi Mine and a total of 25,200 ounces is projected to be bought in 2021.”

BoZ added the build-up of gold reserves to shore up the country’s ability to safeguard its currency the Kwacha. Apart from holding US dollar reserves that can be drawn upon to fund emergency imports as well as support the local currency – gold reserves can also provide an alternative reserve buffer.

 

Source: https://copperbeltkatangamining.com/continued-suspension-of-kasenseli-gold-mine-puts-central-banks-gold-reserve-build-up-in-jeopardy/?utm_source=rss&utm_medium=rss&utm_campaign=continued-suspension-of-kasenseli-gold-mine-puts-central-banks-gold-reserve-build-up-in-jeopardy
Investee Company News

ZAMBIA: CEC SHARE PRICE RALLIES TO K2.65

THE Copperbelt Energy Corporation Plc has registered a sharp rise in its share price, now trading at K2.65 per share, an all-time high, driven by a significantly improved financial performance year-on-year.

Market data availed by the Lusaka Securities Exchange (LuSE) revealed that the power utility’s share price has soared to K2.65 per share as at December 3, 2021, compared to K0.96 per share exactly 12 months ago.

In the wake of the now-lapsed Bulk Supply Agreement (BSA) with Zesco Limited, CEC’s share price on the LuSE slumped to K0.80 per share by end of trading on June 25, 2020, compared to K1.21 by March 31, 2020 when the Agreement lapsed.

The BSA lapsed on March 31, and since then CEC’s transmission and distribution infrastructure had been declared Common Carrier through Statutory Instrument (SI) Number 57 of 2020. Former energy minister Mathew Nkhuwa in the former PF regime issued Statutory Instrument Number 24 of 2021, which replaced SI No. 57 of 2020, declaring CEC infrastructure as common carrier, following the High Court’s quashing of his decision to declare CEC’s transmission and distribution lines as a common carrier in a ruling issued on February 26, this year.

But the Kitwe-based power utility’s share price has rallied since posting an improved financial performance during its first-half year period ending June 30, 2021.

Since announcing its half-year results in September this year, where the utility earned a huge profit of around US $25.5 million in the period ending June 30, 2021, coming from a loss of US $32.5 million in the prior period, its share price jumped from K1.40 per share in early September to K1.80 in trading sessions on the LuSE by the end of that same month.

Analysis from data made available on the company’s share chart shows that its share price peaked to an all-time high of K2.65 per share this month since going public on the local bourse back in January, 2008, opening at K0.45 per share.

Aside from the BSA uncertainty, key factors explaining CEC’s share price fall to around K0.93 per share 12 months ago were its reduced profitability of $5.6 million last year, mainly triggered by huge impairment losses stemming from Konkola Copper Mines’ unpaid electricity bill, and the downgrading of Zambia’s sovereign credit rating having dampened foreign appetite for CEC, among other entities.

However, by the half-year period this year, CEC’s profit of $25.5 million was mainly boosted by significantly reduced receivable impairment losses from KCM, triggered by the segment shift of the KCM demand.

And a change of government in August, 2021 further strengthened optimism on the chances a settlement on the CEC-Zesco commercial dispute being amicably reached following energy minister Peter Kapala’s assurance in Parliament, last October, that government intended to renegotiate the BSA with CEC after the resolution of court cases by the end of this year.

With the Zambian government’s landmark announcement of its Stall Level Agreement with the International Monetary Fund (IMF) on a much-needed Extended Credit Facility (ECF) for Balance of Payments (BoP) support, investor confidence in the economy is likely to improve.

Foreign appetite to increase investment in government securities and shares on the local bourse is equally anticipated in the short-to-medium term.

 

Source: https://www.african-markets.com/en/stock-markets/luse/zambia-cec-share-price-rallies-to-k2-65
Annual Report Summaries, Investee Companies

NFC Africa Mining Plc (NFCA) Extract from 2021 Annual Report

For the year ended 31 December 2021, NFCA reported revenue of ZMW 12.13 billion (US$ 620.78 million), [(December 2020: ZMW4,839.00 million (US$259.74 million)] and profit after tax of ZMW 2.35 billion (US$ 120.94 million, [(December 2020: ZMW1,131.22 million (US$60.72 million).

There were no dividends paid during the year ended 31 December 2021 (2020: Nil).
Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MCL) Extract from 2021 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW3.96 billion (US$201.71 million) for the year ended 31 December 2021 [(2020: ZMW4.39 billion (US$235.78 million)) and had a profit after tax of ZMW222.03 million (US$11.28 million) [(2021: ZMW11.47 billion (2021: US$78.69 million)]. 

Subsequent to year end, MCL continued to experience liquidity challenges because of delayed payments from ZESCO which stood at ZMW 10.97billion (US$ 606.79 million) as 31st December 2022. 

The Company undertook semi-annual maintenance shut down and forced shut down of unit 1 of the 150 MW thermal power units between 25 May 2022 and 7 June 2022. Nevertheless, plant availability was more than 85% for each of the first nine months of FY2022-2023.The Company has a positive outlook in the medium to long term after the Arbitral Tribunal issued the Consent Award to MCL on 13 December 2022, which will see ZESCO pay US$447 million to MCL by 31 August 2023. 

Arbitration Proceedings against ZESCO. 

The Arbitral Tribunal issued the Consent Award on 13th December 2022. Through the settlement, MCL and ZESCO have agreed to irrevocably withdraw all their respective claims brought in the arbitration. The settlement has been recorded in the form of an enforceable final consent award signed and issued by the Arbitral Tribunal on 14th December 2022. The issuance of the final consent award ended the arbitration. The Consent Arbitral Award has since been registered in the High Court of Zambia for any further course of action that the claimants could pursue The Consent Award provides that from the total unpaid arrears under the PPA and TA as at 31st October 2022 of US$578.06 million, ZESCO will pay to MCL the Agreed Settlement Amount of US$447.56 million after MCL agreed to give ZESCO a discount of US$60 million on the interest portion of the arrears and ZESCO agreed to take on the responsibility of the VAT due on the total arrears amounting to US$70.5 million. 

Details of the Settlement as per Arbitration 

(i) As part of the Settlement ZESCO will pay 50 percent of the Agreed Settlement Amount being US$ 223.78 million as follows: 

a. US$10 million to be paid no later than 29th December, 2022; 

b. US$20 million to be paid by 31st March, 2023; and 

c. the remainder by 30th April, 2023. 

(ii) ZESCO shall pay the remaining balance of the Agreed Settlement Amount no later than 31st August 2023. 

(iii) In addition, ZESCO shall continue to pay an additional US$ 750,000 every month towards liquidating the Agreed Settlement Amount. 

(iv) Should ZESCO default on any of these payment terms, the entire amount outstanding at the time of default will become payable to MCL immediately. 

(v) ZESCO will indemnify MCL on demand for any liability on the VAT and any penalties and interest that may be paid by MCL in respect of the VAT. 

ZESCO has, in the meantime, discharged a few payments as per the terms of the Award, leaving a balance amount of US$414.56 Million to be paid under the Award, as of 31 March 2023. 

There were no dividends declared during the year under review (2021: Nil).