CEC Africa Extract from 2017 Annual Report

The Company incurred a net loss for the year ended 31 December 2016 of K2, 656.58 million (US$269.21 million)(2015: K6.15 million (US$0.945 million)) and, at that date the Company’s total liabilities exceeded total assets byK1, 630.08 million (US$158.85 million (2015: total assets exceeded total liabilities by K805.73 million (US$106.36million)) and the current liabilities exceeded its current assets by K1, 808.36 million (US$176.22 million) (2015:K284.41 million (US$37.54 million)).

The Company’s net loss was mainly due to the recognition of impairments on the trade and other receivables& inter company loans with its subsidiary, KANN, of K2,548.53 million (US$258.26 million) and an impairment of its investment in associate, North South Power Limited of K140.61 million (US$14.25 million). The devaluation of the Naira against the US Dollar has also resulted in significant exchange losses recognised in the financial statements of KANN. Also CEC Africa has guaranteed the loan between KANN and the UBA. A notice of default has been issued by UBA which has resulted in the recognition of a liability in the Company’s financial statements.

CEC Africa is refocusing efforts on consolidating and stabilizing the Nigerian operating assets in the immediate to medium term, and position for growth in the longer term. These efforts include:

  • Immediate sale of CECA’s stake in Sierra Leone to a reputable institutional investor/developer.
  • Divestment of some early stage developments given the bank ability challenges and limited resources available.

No dividends were declared and paid by the Company during the year (2015: Nil).

CNMC Luanshya Copper Mines Extract from 2017 Annual Report

CNMC Luanshya Copper Mines plc (CNMC) recorded a turnover of K1, 700.75 million (US$172.35 million)
(unaudited) for the year ended 31st December 2016 (2015: K1, 311.94 million (US$201.7 million). The loss after tax was K306.40 million (US$31.05 million) (2015: K831.07 million (US$127.77 million) loss).

There were no dividends declared during the year under review (2016: Nil).

Vedanta Resources to invest US$1 billion in Konkola Copper Mines

LSE-listed Vedanta Resources has outlined its 50-year vision for mining in the Copperbelt and plans to invest US$1 billion for its next phase of growth.

This investment by Vedanta Resources is expected to create 7 000 jobs.

“I want Konkola Copper Mines (KCM) to be the largest integrated copper producer in Africa, the pride of Zambia and Vedanta Resource’s hub for copper and cobalt production in Africa,” sates Vedanta Resources chairman, Anil Agrawal.

“The ramp up of KCM is the centerpiece of my 50-year vision. It’s technically very challenging, because of the massive amount of water we have to pump out of the mine, but I’m determined to find technical solutions,” explains Agarwal.KCM is one of Zambia’s largest integrated copper producers.

Agrawal has committed to further help diversify the economy of the Copperbelt by supporting initiatives in agriculture and technology. KCM currently supports 2 700 families and small scale farmers through its Sustainable Livelihoods programme.

Agrawal made his ambitions for KCM knows after recently meeting with His Excellency President Edgar Chagwa Lungu. The meeting took place at State House in Lusaka. Lungu and the chairman discussed the outlook for the global mining industry and Vedanta’s investment in KCM.

KCM is one of Zambia’s largest copper producers, with mining operations in Chingola, Chililabombwe, Kitwe and Nampundwe. It is a subsidiary of Vedanta Resources, a London-listed diversified global natural resources company. The group produces aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland and Australia.

Feature image credit: Vedanta Resources (photograph of Vedanta Resources chairman, Anil Agrawal)


Source: Mining review

ZCCM-IH | Agreement with Konkola Copper Mines PLC (“KCM”)

Following the Market Update issued on 20 December 2016 confirming that ZCCM-IH was successful in its application for default judgment against KCM, ZCCM-IH wishes to provide further details on the matter.

Pursuant to the judgment of the English Court, KCM was ordered to pay ZCCM-IH, by 13 January 2017:

  1. the sum of approximately US$103 million in respect of outstanding sums owed to ZCCMIH under a Settlement Agreement (the “Judgment Sum”); and
  2. the sum of GBP 180,000 in respect of the costs incurred by ZCCM-IH in pursuing its application before the English court.

Further, ZCCM-IH hereby advises that:

  1. KCM paid the sum of GBP 180,000 on 13 January 2017 in accordance with the Court’s Judgment; and
  2. ZCCM-IH and KCM have agreed to amend the dates by which KCM will make payments in respect of the Judgment Sum (which sum remains outstanding as ordered by the English Court).

The agreement to amend the dates by which KCM will make payments in respect of the outstanding sums owed to ZCCM-IH will be recorded in a Consent Order of the English Court.

Pursuant to the terms of the Consent Order, KCM will pay ZCCM-IH:

  1. US$ 20 million on 31 January 2017;
  2. US$ 22 million on 28 February 2017; and
  3. US$ 2,550,000 at the end of every month (commencing on 31 March 2017) until such time as the Judgment Sum has been paid in full.

The English court’s further directions to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement remain unchanged. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM. A further announcement will be made at that time.

Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 17 January 2017

Lusaka Securities Exchange Sponsoring Broker
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Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 17 January 2017

CEC Extract from 2016 Annual Report

The group’s revenue increased from K4, 339.9 million (US$667.2 million) for the year ended 31 March 2015 to K6, 392.5 million (US$647.1 million) for the year ended 31 March 2016. The increase in revenue was driven by the improvement in the average billing efficiency at Abuja Electricity Distribution Plc (AED). The group posted a net loss of K2, 236.3 million (US$226.4 million) (2015: K1, 283.1 million (US$197.3 million). The net losses were driven by provisions for bad debt totalling US$94.5 million and impairment charges on property, plant and equipment of US$86.1 million at AED.

Copperbelt Energy Corporation Plc’s (CEC) revenue decreased insignificantly to K2, 875.7 million (US$291.1 million) (2014: K1, 898.6 million (US$291.9 million). Total energy sales to the mines was 2.8% lower at 4,092GWh (2014: 4,208GWh) due to the national energy deficit and the falling prices of copper on the world market, which negatively impacted operations at
the mines.

The net profit for the year was K390.2 million (US$39.5 million) (2014: K218.5 million (US$33.6 million) due to increase in power trading at K236.1 million (US$23.9 million) (2014: K68.3 million (US$10.5 million) through the Southern African Power Pool (SAPP) Day Ahead Market. SAPP is the regional organisation of power utilities within the Southern African Development Community (SADC) formed in 1995 and whose aim is to create a competitive regional electricity market for all SADC Member States. Power trading revenue was recorded as part of other income and was not yet classified as a core business activity in the normal course of business.

The CEC share price on the LuSE moved from K 0.63 as at end of March 2015 to K 0.72 at end of March 2016, representing capital gains of 14.29% year-on-year.

For the period under review, CEC paid out a total of K184.5 million (US$16.4 million) (2015: K90 million (US$14 million) in dividend payments. ZCCM-IH’s share was K36.9 million (US$3.28 million) (2015:K18 million).

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Press Statements by ZCCM-IH and KCM during a Joint press briefing over the Default Judgment against the latter

ZCCM-IH Offices, Lusaka – Konkola Copper Mines (KCM) is one of Zambia’s largest copper producers and one of the largest private sector employers in the country, with operations in four locations, namely Chingola, Chililabombwe, Kitwe and Nampundwe.

The majority shareholder of KCM is London-listed Vedanta Resources, which holds a 79.4% stake, while ZCCM-IH has a 20.6% shareholding in KCM.

KCM and ZCCM-IH have been engaged in discussions with regards to the price participation settlement agreement, which was entered into by both parties in December 2012.

On Friday 16th December, the High Court in London requested KCM to settle this amount with ZCCM-IH and resolve this matter within 28 days.

I am standing here today as part of a joint press briefing with the CEO of ZCCM-IH, Dr Pius Kasolo, to assure all of our stakeholders that we are working together to resolve this matter amicably and to reassure everyone that there is no risk to the KCM business.

We remain fully committed to fulfilling our financial obligations.

Vedanta remains committed to the Group’s operations in Zambia, which is reflected by the significant investment of over $3 billion in KCM since 2004.

Vedanta and KCM have a 50 year vision to continue mining copper in Zambia and we look forward to further strengthening our relations with all stakeholders, including ZCCM-IH.

Mr Steven Din
Chief Executive Officer

Press Statements by ZCCM-IH and KCM during a Joint press briefing over the Default Judgment against the latter

ZCCM-IH Office, Lusaka – As you may be aware, ZCCM Investments Holdings Plc (ZCCM-IH) obtained a Judgment against Konkola Copper Mines Plc (KCM) in the sum of about $ 103 Million to be paid within 30 days, as a result of unpaid sums due to ZCCM-IH dating back to 2012.

I must mention and emphasize that ZCCM-IH is not in the business of litigating, but in the business of enhancing value for its shareholders.

In the quest to achieve this, there are instances where misunderstandings between parties have to be resolved by an independent body, which in this instance was the courts of law.

This should not be taken as a deliberate attack on our partners or indeed a quest to injure them. The action was undertaken because we are also answerable to our shareholders and various stakeholders which include the Zambian people.

ZCCM-IH remains committed to ensuring that the KCM operations continue in the country, and to provide the necessary support to them, to ensure that we enhance the value of our stake in the Company.

Following the judgment and this joint briefing, we wish to state that the business relationship between ZCCM-IH and KCM will continue, but also to remind our partners that we will do what is necessary to protect our interests.

Going forward, both ZCCM-IH and KCM have committed to manage the business, in a manner that is mutually beneficial to all the parties involved.

Dr. Pius C. Kasolo
Chief Executive Officer

ZCCM-IH | Announcement default judgement against KCM

We refer to the Market Update where the market was advised that ZCCM-IH had filed a Claim Form with the English High Court to recover outstanding sums in excess of US$100 million due to it from Konkola Copper Mines Plc (KCM) pursuant to the terms of the Settlement Agreement entered into in 2013.

We now advise that ZCCM-IH has been successful in its application for default judgment. KCM has been ordered (on 16 December 2016) to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days. The total amount to be paid by KCM amounts to approximately US$103 million. KCM has also been ordered to reimburse ZCCM-IH 80% of the costs it has incurred in pursuing its claim.

Further directions have been given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM.

By Order of the Board
C Chabala
Company Secretary


Issued in Lusaka, Zambia on 20 December 2016

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
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Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 19 December 2016

Vedanta Unit Told to Pay Zambian State Company $103 Million

Vedanta Resources Plc’s Zambian unit must pay the southern African country’s majority state-owned mining investment company about $103 million after a London ruling related to a copper-price agreement.

ZCCM Investments Holdings obtained a default judgment in the U.K.’s High Court of Justice against Konkola Copper Mines on Dec. 16, it said in an e-mailed statement Monday. KCM said in an e-mailed statement on Tuesday that it’s consulting with ZCCM-IH and “other relevant stakeholders to resolve all outstanding issues within 30 days, in accordance with the court’s ruling.”

KCM hadn’t paid the money owed under the copper-price participation deal because of “operational and financial challenges,” ZCCM-IH, which has a 20.6 percent shareholding in Konkola, said in its 2015 annual report. The Vedanta unit was in talks with ZCCM-IH and the government to pay the claim, which needed to be settled from available cash flows, KCM Chief Executive Officer Steven Din said Nov. 10. The company was at that point hoping to resolve the matter out of court, after ZCCM-IH filed the case in June, he told investors on a call.

“We are working together to resolve this matter amicably,” Din told reporters at a joint press briefing with ZCCM-IH in Lusaka, Zambia’s capital, on Tuesday.

The court ruled that ZCCM-IH is entitled to recover more money from KCM if it’s found that the company transferred funds to Vedanta, which would have been in breach of the pricing agreement.

ZCCM-IH is also claiming damages from First Quantum Minerals’ Kansanshi unit in Zambia, in which it has a 20 percent shareholding, in the Lusaka High Court, and has started arbitration proceedings in London over the same matter related to a loan it said Kansanshi gave First Quantum that wasn’t at arm’s length terms. First Quantum denies any wrongdoing.


Source: Bloomberg

Mine boosts rural town in Zambia

The mining town of Solwezi, 633 Kilometres North West of Zambia’s capital Lusaka, has been transformed into an active centre of business eyeing markets beyond borders.

Host to three mining giant outlets, Kansanshi, Lumwana Kalumbila, the provincial capital is attracting trade from neighbouring Angola in the west and Democratic Republic of the Congo (DRC) in the North.

Until recently Kalumbila mine was part of Solwezi but the government has hived it off from there creating a new district all together.

“But even then Solwezi still has a foothold in there (Kalumbila) in that every little thing that residents of Kalumbila need they have to travel here,” said a local trader Amon Bwembya Kikupa.

Within a few years, three shopping malls have sprung up along a litany of development structures from hotels, lodges, and filling stations to new restaurants.

A new civic centre building has been constructed while many government blocks have been rehabilitated if not replaced by modern ones.

A number of banks have set up camp there while those who moved earlier have opened up new buildings.

A recently constructed $2million City mall just on the edge of the town towards Kasempa and Mwinilunga roads has not only added impetus to the status of the district but has given a complete new outlook of the former low level rural town.

Like many parts of Zambia Solwezi has witnessed a housing construction boom that has wiped out huge areas of idle land including some shanty townships and replaced them with new modern housing units.

As mining thrives in the area other businesses are proportionally sprouting locally and spilling activities into neighbouring Angola and the DRC.

Since the Angolan civil war ended followed by a long period of tranquil Angola has embarked a countrywide reconstruction programme which has benefitted even some Zambians who have gone to work there.

On their part Zambians have stepped up trade in foodstuffs such as eggs, Tomatoes and other vegetables in need in the former Portuguese colony.

To enhance trade deals and cement cultural relations between the two countries the office for the Angolan Consular general has been opened in Solwezi.

The office has played a critical role in helping refugees wishing to return home.

On the other side, the 160 Kilometre stretch from Solwezi to Kipushi, the Congolese border town is a hive of activity as cross border trade thrives people of Kolwezi in the DRC and Solwezi in Zambia.

The North western province as a whole has in recent years seen an increase in maize production and residents of Kipushi and other border areas are beneficiaries of the grain sold to communities through informal and formal deals.

Beans and sorghum are common delicacies from Solwezi and the rest of the province found among consumers in the DRC.

A North Western Province Chamber of Commerce official said an interview recently the organization was working with the Zambia Development Agency (ZDA) to enhance business liaison between Angola. Zambia and the DRC, through trade missions.

Beyond that the DRC enjoys the largest swathe of copper-rich land called the Lufilian Arc which borders with Zambia.

The arch extends from Copperbelt and North Western province into DRC’s Katanga province . Solwezi lies within this arch while on the other side there is Kolwezi, thus the mining activities in the arch have therefore strengthened relationships between peoples of the two countries.

It is common to find trucks ferrying huge mining equipment from South Africa using the Solwezi –Kipushi route into the DRC.

Similarly a lot of mineral exports are funneled from the DRC through Solwezi to the Copperbelt onward to further South.

A recent visit to Solwezi however, revealed that a lot more is needed to make more accessible the north western province, dubbed the new Copperbelt,

Within the district civic leaders under the now adopted decentralization policy, have serious challenges to improve roads.

Resources have to be mobilized from mining companies there and other operators to achieve the task.

Except for the main highway that runs in the middle of the city centre, and about a 10 Kilometre stretch from the main road to Kansanshi mine most of the roads are not tarred, thus glazing the positive development the town has seen in recent years.


Source: Herald Express