ZCCM IH provides a further update on the Mopani discussions

ZCCM IH has indicated that discussions around the future of Mopani are currently still under discussion, according to a statement released by the company.

Further to the cautionary announcement date 4th September 2020, ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company”) wishes to advise Shareholders and the market that the Company’s discussions with Glencore Finance (Bermuda) Ltd regarding the future of Mopani Copper Mines Plc (“Mopani”) are still in progress which, if successfully concluded may have a material impact on the price of the Company’s securities”, read a statement issued by order of the Board through Company Secretary Chabby Chabala in Lusaka on 21 December 2020.

ZCCM-IH is in discussions with Glencore Finance (Bermuda) Ltd regarding the future of Mopani Copper Mines Plc (“Mopani”) for some time now. Glencore Finance is the major shareholder of Carlisa Investments Corporation which in turn is the majority shareholder of Mopani.

In August 2020, Mining-journal.com report that Mines minister Richard Musukwa told Reuters ZCCM-IH was seeking a larger stake “with a view to holding a controlling stake in Mopani”. Although the SENS announcements from ZCCM have not indicated that ZCCM IH are seeking a larger stake, this is the reason why they have advised Shareholders to exercise caution when dealing in the Company’s securities until a full announcement is made.

Discussions with the mining company and the investment group were prompted when Glencore CEO Ivan Glasenberg confirmed Mopani was operating under care and maintenance.

Source: http://fizambia.com/?p=9355

Illegal Miners Invade Kasenseli Gold Mine

A group of illegal miners in Mwinilunga District have brought down a parameter fence covering Kasenseli Gold Mine.

And the group has allegedly stolen undisclosed quantities of alluvial gold after invading the mining premises.

Mwinilunga District Commissioner Anolt Mapulanga who confirmed the incident has expressed disappointment with the recent developments.

Mr. Mapulanga said those behind the behaviour need to realise that the infrastructure they are destroying belongs to Zambians and their act is irresponsible.

He stated that the Zambia Police has been directed to step up its security to ensure installations are not tempered with.

Mr. Mapulanga added that his office will not watch criminal elements disregard the law with impunity and engage in retrogressive activities.

“Government will sit down and allow criminality, the installation by ZCCM Gold is being done on behalf of all Zambians and it is it sad to see the same zambians vandalising the infrastructure.

Source: https://zambiareports.com/2020/12/03/illegal-miners-invade-kasenseli-gold-mine/

ZCCM-IH to appeal court decision asking it to enter arbitration with Vedanta

ZAMBIAN mines minister, Richard Musukwa, said the country’s government remained steadfast in its desire to find a buyer for control of Konkola Copper Mines (KCM), currently owned by Vedanta Resources.

“It is still the government’s wish to find a new equity investor with technical and financial capacity to recapitalise the mine and operate it effectively,” Musukwa said after the state mining arm ZCCM-IH signalled its intention to appeal a court ruling in favour of Vedanta.

Earlier this month, a Court of Appeal ruled that ZCCM-IH should go into arbitration with Vedanta regarding disputes related to KCM. Vedanta owns 80% of KCM with ZCCM-IH owning the balance. Musukwa, however, said the country wanted KCM to be put into liquidation proceedings.

In 2019, Zambia accused Vedanta of failing to live up to its investment and dividend promises and barred the Indian company from accessing KCM assets. Vedanta argued that any dispute between shareholders should be negotiated in terms of their agreement.

“ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Musukwa told Zambia’s parliament on Thursday.

Potential buyers of KCM were awaiting a resolution to the dispute, Musukwa said, adding that steps taken by the government should not be “considered as nationalism”.

Vedanta was not immediately available for comment, said Reuters.

Source: miningmx

UPDATE 1-Zambia to appeal court ruling backing Vedanta in KCM mine dispute

LUSAKA, Nov 26 (Reuters) – Zambia’s state mining arm ZCCM-IH plans to appeal a court ruling in favour of Vedanta , which has sought arbitration in a dispute over its jointly owned copper mine that is facing liquidation, the mining minister said.

India-based Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when Lusaka appointed a liquidator for the mine.

 

“ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Mining Minister Richard Musukwa told parliament on Thursday.

Last week, a Zambian court ordered a halt to liquidation proceedings for Konkola Copper Mines (KCM) to allow Vedanta and ZCCM-IH, which owns 20% of the operation, to proceed to arbitration.

Potential buyers of KCM were awaiting a resolution to the dispute, Musukwa said, adding that steps taken by the government should not be “considered as nationalism”.

“It is still the government’s wish to find a new equity investor with technical and financial capacity to recapitalise the mine and operate it effectively,” he said.

Vedanta was not immediately available for comment. (Reporting by Chris Mfula; Writing by Zandi Shabalala; Editing by Edmund Blair)

Source: Reuters 

Zambia Sees Deal With Glencore Over Mopani Within a Month

(Bloomberg) — Zambia expects to conclude talks over buying Glencore Plc’s stake in Mopani Copper Mines Plc within a month, according to Barnaby Mulenga, permanent secretary in the Ministry of Mines.

Mulenga declined to disclose the size of the stake that state-owned ZCCM Investments Holdings is trying to acquire. ZCCM-IH currently has 10% of Mopani, with Glencore holding 73.1% and Vancouver-based First Quantum Minerals Ltd. 16.9%.

Zambia wants to raise its holding after clashing with Glencore earlier this year over the company’s plan to mothball Mopani’s operations. But it’s unclear how the cash-strapped government, which last week defaulted on a Eurobond interest payment, would finance a deal. While impairments of $1.14 billion at Mopani contributed to Glencore posting a first-half loss, the Switzerland-based commodity giant still assigned a value of $704 million to the operations.

Mulenga expects a deal to be announced in the coming weeks by Mines Minister Richard Musukwa, who said in September that both companies were prepared to sell their entire holding in Mopani. Zambia won’t have trouble raising finance for the deal, according to Mulenga, even though no money will come from the Treasury.

Zambia Says Glencore, First Quantum Willing to Sell Mopani

“The resource attracts money, so the issue of financing is the least of the worries for the Zambian government,” Mulenga said in an interview on Thursday, referring to Mopani’s copper-mining operations. He didn’t give further details.

A spokesman for Glencore declined to comment. First Quantum spokesman John Gladston also declined to comment.

Mining Disputes

Glencore shelved its plans to place the operations under care and maintenance for 90 days, after Zambia threatened to revoke its mining license in April. The government strategy is driven by a need to safeguard jobs at Mopani, rather than any desire to raise its shareholding, said Mulenga.

Zambia’s increasingly tense relations with investors in the key copper-mining industry may partly reflect maneuvering by President Edgar Lungu ahead of next year’s elections. The government is also in arbitration over mining assets it seized last year from billionaire Anil Agarwal’s Vedanta Resources Ltd.

Other copper miners have halted $2 billion of planned investments because of a dispute over a royalty tax. A mining conference later this year will seek to address that issue, Mulenga said.

Zambia, Africa’s No. 2 copper producer, relies on the metal for about 70% of its export earnings. The impact of the coronavirus pandemic is forecast to cut output this year to about 764,188 tons, far short of the nation’s target of 1 million tons, according to Zambia Chamber of Mines.

“Hopefully we will come to some consensus to what should this tax regime look like,” Mulenga said.

(Updates with copper output in penultimate paragraph)

©2020 Bloomberg L.P.

Source: Swissinfo.ch

KCM dispute to go to arbitration

Zambia’s Court of Appeal has ruled that Vedanta can proceed to arbitration with state mining firm ZCCM, in a dispute over the Indian mining major’s copper assets in the central south African nation.

Vedanta’s 79.4% owned Konkola Copper Mines (KCM) in Zambia were seized and ordered to be liqudated in May 2019 over alleged mismanagement.
The assets at the heart of dispute are KCM’s Nchanga copper smelter, the largest in Zambia, and the Konkola and Nchanga mines.

The Indian mining giant has invested more than $3 billion in the asset since acquiring it from Anglo American in 2004, according to Vedanta’s website. The remaining stake is held by ZCCM.
KCM’s provisional liquidator, Zambian lawyer Milingo Lungo, said the latest court ruling, in Ndola on November 20, will let the parties proceed to arbitration to settle the dispute.
During the arbitration process, Lungo will remain in control of KCM operations as mandated by the Zambian High Court in May 2019.

In November 2019, Lungo told Fastmarkets that the best option was to increase the value of the disputed KCM assets and ready them for a new owner.
But the latest ruling comes at a time when Covid-19 uncertanties are making it more difficult for major miners and smelters around the world to attract investors to buy assets or to help with developmental and operational costs.

The Zambian government previously approached different parties, including China Non-Ferrous Metal Mining Group (CNMC) over sale of KCM’s operations. However, legal risks, existing debts and operational issues have made KCM sale difficult.

When the Zambian government originally filed the liquidation order in May 2019, it sent shockwaves through the Zambian copper industry.

Liquidator Lungu said Vedanta’s deferral of a service fee payment to contractors and staff had led to output disruptions and that had prompted the government to step in at Nchanga and Konkola.
Since the liquidation order, Vedanta has been actively defending its rights under international law to proceed into arbitration with the Zambian state mining firm.

Zambia is the second-largest copper producing country in Africa and its copper exports are a major source of foreign income. One of its biggest export category is intermediate copper products – blister copper and anodes.

Fastmarkets’ spot refining charge (RC) for 98-99% blister copper on a cif China basis, stood ta $150-160 per tonne at the end of last month.
Julian Luk

Source: Zambia Watchdog

Why ZCCM IH cautionary notice on KCM is timely

ZCCM IH recently informed the market on the outcome of the tribunal proceedings which sought to determine whether the Provisional Liquidator at KCM would continue in office or not following Vedanta Resource Limited and Vedanta Resources Holdings Limited pursuing the matter. The ruling was in favor of ZCCM IH by way of the arbitrator dismissing the application by the Vedanta Group.

In compliance with the requirements of the Securities Act No. 41 of 2016, shareholders are informed that on 23 March 2020, the tribunal appointed in arbitration proceedings commenced by Vedanta against ZCCM-IH dismissed an application by Vedanta for an interim measure requiring ZCCM-IH to withdraw the Petition and procure the removal of the Provisional Liquidator from office”, read a statement issued by ZCCM IH’s Company Secretary Chabby Chabala on 10th November 2020 in Lusaka.

Under the section relating to consideration of applications for proposed take-overs and mergers in the Securities Act of 2016, section 134(4)(b), which states that the disclosure of timely and adequate information to enable shareholders to make an informed decision as to the merits of an offer, ZCCM IH was compelled to provide this timely update to investors.

The market has been waiting patiently for the announcement of this particular outcome. Part of the composition of the market is potential investors who, among other things, consider all matters of concern such as environmental and internal factors.

With knowledge on the outcome of know environmental factors, the investment decision is influenced. In the case of KCM, the proceedings with the arbitrator placed a pebble in the timeline for an investor decision to be made. Hence, clarity in the matter now paves the way for an astute investment decision to be made going forward.

However, matters outside the control of either party involved in this particular case is Country Risk. At the moment, many investors have been following with intent the issue of the Ministry of Finance’s deliberations with Euro Bondholders and Chinese Lenders. The outcome of these discussions has never been more important in the investment journey of Zambia.

Fitch, Moodys, and S&P credit rating agencies all place Zambia’s credit rating as a country with substantial risks. Some of these risks include the risk of default. Until recently, the Ministry of Finance has been in discourse with Bondholders and Chinese lenders for a possible moratorium of facilities following the Covid 19 pandemic. Zambia is not the only country to engage its lenders in such a manner. Argentina and Mozambique also engaged the services of Lazard, a world-leading financial advisory and asset management firm, to aid in restructuring conversations that would also involve difficult discussions with lenders.

With a myriad of environmental factors, mostly weighted towards those that are not within the investment entity’s control, investors will be watching very closely with sand in their hour glasses before investment decisions can be made.

Source: Financial Insights 

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).  

APPLICATIONS FOR APPOINTMENT AS ZCCM-IH’S REPRESENTATIVE DIRECTORS ON BOARDS OF INVESTEE COMPANIES

 ZCCM Investments Holdings Plc.

ZCCM Investments Holdings plc (ZCCM-IH or the Company) is an investments holdings company with a primary listing on the Lusaka Securities Exchange and secondary listings on the London and Euronext (Paris) Stock Exchanges. The Company has the majority of its investments held in the copper mining sector of Zambia. ZCCM-IH’s shareholders are the Industrial Development Corporation (IDC) holding 60.3% of the shares, Government of the Republic of Zambia (GRZ) with 17.3%, National Pension Scheme Authority (NAPSA) holding 15% and private investors holding the remaining 7.4%.

ZCCM-IH holds equity investments ranging from 10% to 100% in 22 companies in Zambia. The Company is entitled to appoint persons to the Boards of the companies in which it holds shares (Investee Companies) as indicated below:

Count Investee Company Shareholding percentage No. of Board seats for ZCCM-IH
1. Chambishi Metals Plc 10.0 1
2. Mopani Copper Mines Plc 10.0 1
3. NFCA Africa Mining Plc 15.0 1
4. Chibuluma Mines Plc 15.0 1
5. Copper Tree Minerals Limited 15.6 1
6. CNMC Luanshya Copper Mines Plc 20.0 2
7. Kansanshi Mining Plc 20.0 2
8. Lubambe Copper Mine Plc 20.0 1
9. Konkola Copper Mines Plc 20.6 2
10. Copperbelt Energy Corporation Plc 24.1 2
11. Maamba Collieries Limited 35 2
12. Consolidated Gold Company Ltd 45.0 2
13. Central African Cement Ltd 49.0 2
14. Rembrandt Properties Ltd 49.0 2
15. Zambia Gold Company Ltd 51.0 2
16. Investrust Bank Plc 71.4 6
17. Limestone Resources Ltd 100.0 4
18. Misenge Environmental and Technical Services Ltd 100.0 4
19. Kariba Minerals Ltd 100.0 4
20. Kabundi Resources Ltd 100.0 3
21. Mushe Milling Ltd 100.0 3

ZCCM-IH has, available for immediate occupation, non-executive Board seats in majority of its Investee Companies. The Company invites applications from suitably qualified and experienced professionals and business practitioners to be considered for appointment as non-executive Representative Directors of ZCCM-IH on Investee Companies.
Summary of Duties and Obligations of Representative Directors

  1. The Representative Directors will be expected to exercise their business judgement to act in what they reasonably believe to be in the best interest of the Investee Company and ZCCM-IH and specifically to ensure ZCCM-IH’s investment value is enhanced and protected.
  2. In discharging this duty and obligation, the Representative Directors will be expected to rely on the honesty and integrity of the Company’s senior executives, its outside advisors, auditors and also on their own experience and analysis of core business.
  3. Representative Directors will be expected to attend Board and Committee meetings and to spend the necessary time needed to discharge their responsibilities. The Representative Directors will be expected to cause the receipt of the Board Packs in due time before the date of the meetings to facilitate adequate preparation.
  4. The Representative Directors will submit reports of the meetings and events attended pertaining to the Investee Company, highlighting the critical issues, outcomes, resolutions and any proposals deemed necessary.

Qualifications, Experience and General Competences of Representative Directors

The requirements for one to be considered for appointment as a Representative Director include the following:

  1. At least an undergraduate degree or equivalent from a respected university/qualifications body. A post graduate qualification will be an added advantage.
  2. These educational criteria will not exclude exceptional candidates who do not meet them but have other demonstrated capabilities such as setting up and running successful companies of their own or other visible accomplishments which will add great value to ZCCM-IH;
  3. Over seven years extensive business management experience at a senior level such as Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or such other senior levels.
  4. Exposure in an international environment will be an added advantage;
  5. Ability to read, understand and offer suggestions and comments on financial statements;
  6. Demonstrate competences in strategic planning and business leadership;
  7. Self-starter with visible leadership skills and the ability to be persuasive and persevering under, sometimes, trying circumstances;
  8. Knowledge of the mining sector will be an added advantage;
  9. Have no material relationship and or conflict of interest with the Company or any of its Investee Companies;
  10. Sufficient applicable experience to understand fully the legal and other responsibilities of an independent director of a company based in Zambia.

Suitably qualified women candidates are urged to apply as due consideration will be given to them in an effort to improve representation of women on the Boards.

Duration of appointment and remuneration
The appointment will be for a period of three years. Continued representation will purely be based on results of the annual assessments of performance of the Representative Director against goals and objectives agreed with ZCCM-IH.
The Representative Director will be remunerated according to the fee structure existing at the Investee Company on whose Board he/she is appointed.

Submission of applications
Interested professionals and business practitioners should submit signed applications with detailed curriculum vitae indicating contact telephone number or e-mail address, together with names and contact address of three traceable referees and copies of educational and professional qualifications to the underlisted on or before 25/11/2020.
The Company Secretary

ZCCM Investments Holdings Plc
ZCCM-IH Office Park
Stand No. 16806, Alick Nkhata Road – Mass Media
P.O BOX 30048
Lusaka

Phone:3888000
Email:corporate@zccmnew.wpenginepowered.com
Website: www.zccmnew.wpenginepowered.com

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