Investee Companies

Investee Company News, ZCCM-IH News

First Quantum Faces $1.4 Billion Claim From Zambian Firm

ZCCM Investments Holdings, the state-controlled Zambian company that holds minority stakes in most of the country’s copper mines, plans to claim as much $1.4 billion from First Quantum Minerals Ltd. after accusing the Vancouver-based company of fraud. The Canadian company’s stock fell.

The claim includes $228 million in interest on $2.3 billion of loans that ZCCM-IH said First Quantum wrongly borrowed from the Kansanshi copper mine, as well as 20 percent of the principal amount, or $570 million, according to an internal company presentation, dated Nov. 4, obtained by Bloomberg.

The company is also seeking $260 million as part of a tax liability the Zambia Revenue Authority said Kansanshi owed it, as well as the cost of the mine borrowing money commercially that ZCCM-IH said could have been avoided.

ZCCM-IH, in which the Zambian government has a 77 percent stake, said in papers filed in the Lusaka High Court on Oct. 28 that First Quantum used the money as cheap financing for its other operations. ZCCM-IH also last month filed a notice of arbitration against Kansanshi in London over the same matter. ZCCM-IH owns 20 percent of Kansanshi. No figure was mentioned in the court filings.

First Quantum says the claims are “inflammatory, vexatious and untrue,” and that the loans were at fair market rate. First Quantum is in talks with Zambian government representatives to resolve the matter, it said in a Nov. 11 statement. It declined to comment on Monday.

The company’s shares fell 4.6 percent to C$13.57 by Tuesday’s close in Toronto.

FQM, as the company is known, is disregarding the rights of minority owners in ZCCM-IH in dealing directly with government, Philippe Bibard, a spokesman for a minority shareholder group based in France, said by phone Nov. 11.

Source: Bloomberg

Investee Company News

CEC proposes demerger of CEC Africa from the CEC Group

INTRODUCTION

In compliance with the Listings Requirements of the Lusaka Securities Exchange (“LuSE”), shareholders are advised that on 28 October 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC Plc” or the “CEC Group”) has proposed, subject to shareholder approval and lender consent the restructuring of the CEC Group by means of a distribution, via a dividend in specie, of ordinary shares in CEC Africa Investments Limited (“CEC Africa”) to shareholders of CEC Plc in the ratio of one (1) ordinary share in CEC Africa for every CEC Plc share held on the “Proposed Demerger”), being the record date of the Proposed Demerger (“Proposed Demerger Record Date”).

BACKGROUND AND RATIONALE FOR THE PROPOSED DEMERGER

In 2013, CEC Plc established CEC Africa as an investment platform through which it could channel its investments in the power sector across Sub-Saharan Africa. CEC Africa was capitalized with USD100 million, being seed capital for its operations, and received a further injection of circa USD50 million through shareholder loans. The original strategy for CEC Africa was for it to be an investment platform through which investors could access power infrastructure assets that were well diversified by region and technology.

In 2016, various factors have adversely affected the value of CEC Africa, including but not
limited to:

  • Low power generation in Nigeria compared to Multi Year Tariff Order forecast;
  • Liquidity challenges facing the Nigerian energy sector;
  • The effect of the depreciation of the Naira on CEC Africa’s USD debt obligations; and
  • Limited enforcement of the Nigerian power sector regulatory regime due to various factors.

These and other general matters have significantly impacted the fair value of CEC Plc’s investment in CEC Africa…

 

Download the full announcement below.
Investee Company News

Load shedding to reduce once Maamba switches on mid-November-ZESCO

Power utility ZESCO says the national grid will be boosted by the injection of about 270 MW of power from Maamba coal fired power plant starting mid-November 2016.

ZESCO Senior Manager Marketing and Public Relations Bessie Banda said this will result in a remarkable reduction in the national power deficit and subsequently in the extended load shedding that has been experienced in the last few weeks in some parts of the country.

Ms. Banda said Maamba Collieries Limited has constructed a 300 MW mine mouth coal fired power plant in Sinazongwe District of Southern Province.

She said two generators of 150 MW output have been installed at the power station. When fully commissioned, the power plant will produce 300 MW out of which 270 MW will be injected into the Zambian electricity grid.

Ms. Banda said the other 30 MW will be utilised at the Maamba plant adding that the first generator at Maamba was commissioned on 24 July 2016 while the second generator is ready and being prepared for synchronization to the national grid.

“Since commissioning, the first generator at Maamba has produced and dispatched about 65,346MWh into the Zambian power grid and ZESCO has been buying this power. However, on 9 October, the Southern part of the Zambian grid that is connected to Maamba power station was separated from the rest of the national grid to enable completion of the transmission line upgrade works between Muzuma and Kafue Town,” Ms Banda said.

“Consequently, power from Maamba became unavailable to the national grid thereby temporarily aggravating the power deficit the country is facing. Maamba is currently only supplying parts of Southern and Western Provinces.”

Ms. Banda said the line upgrade works have been undertaken in order to increase the transmission capacity from Muzuma in readiness for evacuation of the 270 MW from Maamba as well as the additional power to be generated under Maamba Phase II.

“The transmission line upgrade works between Muzuma and Kafue Town will be completed by 11 November, 2016 when the line will be restored to service. It is expected that the current load shedding will be reduced once these works are completed.”

Source: Lusaka Times

Investee Company News

VIT varsity inks MoU with Zambian firm

Chennai: VIT University has entered into an MoU with Konkola Copper Mines (KCM), Zambia, to enable students get hands-on training.

A press note said following the successful education imparted by VIT to 15 students sponsored by KCM in 2011 and 15 students in 2014, the Zamibian company has again sponsored 14 students this year.

This would enable develop skilled technical manpower. The MoU was signed by Steven Din, chief executive officer, KCM and Dr G Viswanathan, Chancellor, VIT University, recently.

The release said they will undergo studies on various disciplines of engineering at VIT University. Steven Din later took a tour of the campus and its facilities including the library, laboratories and hostels.

He met all the sponsored students over an interactive lunch. Konkola Copper Mines plc (KCM), one of Africa’s largest integrated copper producers, is a subsidiary of London-listed Vedanta Resources Plc, one of the world’s largest diversified natural resources companies.

VIT Vice-Chancellor Dr Anand A Samuel, Pro Vice-Chancellors V Raju and S Narayanan were among those present.

(Caption: VIT Chancellor Dr G Viswanathan and KCM chief executive officer Steven Din after signing the MoU.)

Source: News Today
Investee Company News, ZCCM-IH News

UNZA students win mining awards

UNIVERSITY of Zambia fourth year student Absalom Tembo has scooped the 2015/2016 Konkola Copper Mines Plc prize for the overall final year student in the School of Mines. During the School of Mines Student award-giving ceremony held on Friday at UNZA veterinary lecture theatre, James Chulombo won the Konkola Copper Mines Plc prize for the best graduating student in Geology while Katongo Kangwa came out as the best graduating student in Mining Engineering.

Absalom Tembo again got the award for the best graduating student in Metallurgy and Mineral Processing and Parson Banda won the Mopani Copper Mines prize for the best final year project in Geology.

The best final year project in Mining Engineering award sponsored by Mopani Copper Mines went to Brighton Samatemba while Kennedy Chansa was awarded the best project final year project in Metallurgy and Mineral Processing.

Source: Daily Mail

Investee Company News

Sandvik to unlock Zambian copper ore body

Sandvik Mining and Rock Technology has entered into a long-term agreement with NFC Africa Mining Plc (NFCA) to supply the necessary equipment and skills to effectively mine the lucrative South East Ore Body (SEOB) of the Chambishi copper mine in Zambia.

With the assistance of Sandvik Zambia, the mine will enter into a four-year agreement to supply a comprehensive solution that will include automation of the mine, equipment, services, training and the company’s unique Trans4Mine optimization program.

Sandvik will begin to supply NFCA with a complete suite of mining equipment to successfully mine the SEOB, beginning in March 2017 and running through 2020.

“We believe this is just the start of a bright partnership with NFCA and its mother-company China Nonferrous Metal Mining Co. Ltd. ” says Daniel Banister, Sales Area Manager for Central Africa at Sandvik Mining and Rock Technology. “Our investment in increasing the competence of our personnel is clearly paying dividends as we have the right people and products to support even the largest operations in the Central African region. It certainly paves the way for future similar successful partnerships with other mines in the region.”

During the signing ceremony held at the mine recently, NFCA Senior Deputy Chief Executive Officer, Mr Donghong Zhang affirmed the good working relationship that exists between the companies, adding that since the project started in 2012 Sandvik has shown tremendous support and commitment.

He also commended the company on its ability to leverage its local and international expertise to find solutions for the Chambishi mine.

“A project of this nature underscores Sandvik Zambia’s ability as a full-fledged solution provider, rather than just being a product driven company,” Zhang says. “This is just the kind of company that NFCA needs to be doing business with in the future.”

Source: Mining.com

Investee Company News

CEC to commercialise biodiesel plant

THE Copperbelt Energy Corporation (CEC) is to commercialise its biodiesel plant after approval from Zambia Bureau of Standards (ZABS).

ZABS has issued CEC with a product and process certification which demands a number of documentation such as standard operating procedures, quality manuals, and policies, among others.

According to a statement availed to the Daily Mail on Friday by the CEC renewables department, the move by the corporation is a major step in product quality assurance to all customers as it will increase market share.

On January 15, the CEC renewables unit made an official application for ZABS product and process certification to the local and international standard of biodiesel defined as mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats for use in diesel engines. Biodiesel refers to the pure fuel before blending with diesel fuel.

“In its efforts to commercialise, the biodiesel plant sought to get product and process certification from the ZABS.

“Conformance to the local and international standards has many benefits such as winning consumer confidence in the certified products resulting into increased market share and consumers’ ability to identify the products that conform to quality standards thus making quick decisions in favour of quality products,” the statement reads.

It says once certified by the bureau, the biodiesel product is presented with a better image in both national and international markets resulting into mutual recognition schemes where countries recognise each other’s products thus easing entry into regional and foreign markets.

Other advantages include: easy acceptance and promotion of new products in the markets and safeguarding the image and reputation of the manufacturer.

The certification scheme provides a technical audit of product quality and process control procedures, and that the manufacturer gets technical advisory services and information at little or no cost that will otherwise be obtained at very high cost.

On March 2, ZABS officials went for their first audit of the renewables unit to begin the certification process.

Source: Daily Mail

Investee Company News

Demand for electricity in Africa increasing – CEC

THE Copperbelt Energy Corporation (CEC) is exploring new markets for power sources across Africa following increased demand of the commodity in the region, says company managing director for operations Owen Silavwe.

Mr Silavwe explained that Zambia and DR Congo were the main markets for power from the corporation.

Responding to questions during the investor conference call over company interim results for the year ended 31st May, Mr Silavwe said CEC was looking for new sources in aligning with its strategy.

“Maybe just to start with the expansion, what I was basically saying is that in terms of the markets where we are selling power today it is mostly Zambia and DR Congo.

“However, from a power sourcing perspective, we are always looking around for new sources of power to ensure we align that with our strategy to have multiple sources,” she said.

Mr Silavwe said the company was interested whenever there was availability of power sources within the market region.

“If as part of that process we need to take a stake, be it in the power source itself or in ensuring that transmission capacity to enable the movement of power within the region is created, then obviously we need to take a strategic view on that.

“So we will obviously review those opportunities as they rise and then try and determine how aligned they are to the strategy that we are pursuing at the moment,” he said.

He also said CEC would continue to pursue the demand for power in the mining sector for the DRC as the country’s market was still growing.

Mr Silavwe said the power shortages in DRC just like other African countries opened up markets for CEC.

“Obviously we need to have a strategy as to how we address the potential growth in that market. And that is something that we will continue to work on,” he said.

Source: Daily Nation
Investee Company News

Kansanshi Mining Plc renews drill fleet

Amidst lacklustre global commodity prices Zambia’s largest copper mine, Kansanshi, has opted to renew its fleet of blast hole drill rigs with more efficient and reliable Sandvik D25KS and DP1500i drill rigs.

In the face of tough times in the Zambian copper mining industry, Rob McMaster, key account manager for First Quantum Minerals Sandvik Zambia says, mining contractor, First Quantum Mining & Operations (FQMO), have taken a progressive step to ensure improved efficiency and reliable production by renewing their DR500 fleet with Sandvik D25KS and DP1500i drills that are easier to maintain and operate on site.

He adds that Sandvik has entered into a buy-back agreement with FQMO to trade in the company’s 11 Sandvik DR500 series fleet that are used for blast hole and pre-split drilling in preference for the 9 new Sandvik D25KS rigs and 4 new Sandvik DP1500i rigs. The bundled deal makes the transaction more affordable and is in-line with FQMO’s overall objectives.

Efficient production

“We work closely with our customers to ensure operations are run optimally at all times. When circumstances change and a mine’s requirements are altered along with it, then we do our utmost to restructure equipment and fleets in such a way that the customer’s new needs are met. This is precisely what we have done at Kansanshi where we are proud to deliver a solution that is tailored to Kansanshi’s current and changing future requirements. The new Sandvik D25KS and DP1500i drill rigs are machines that will require less maintenance and specialised care than the predecessors.”

“They are also hardworking and well-suited to the current conditions in the mine, so are expected to deliver many years of reliable service with the highest levels of availability throughout as have the previously supplied D45KS, D25KS and DP1500i drills. FQMO has a fleet of 30 drills and the new Sandvik D25KS & DP1500i drills are required to assist with the high production requirements.

“They will be joining a number of other Sandvik D25KS drill rigs, as well as the larger Sandvik D45KS and Sandvik DP1500i top hammer drills. The standardisation will in many ways simplify maintenance, stock holdings of spares, rock tools and parts to make the operation easier to manage,” McMaster says.

FQMO’s manager optimisation drill & blast James Bravery was the direct link for the deal and through numerous discussions and negotiations we came to an agreed solution which is the result of this buy back agreement, McMaster says.

About the D25KS rig

Thanks to its compact size, proven design and durable power groups, the Sandvik D25KS blast hole drill is a very stable and highly manoeuvrable surface drill for surface mining and large-scale quarrying.

It’s a down-the-hole (DTH) hammer drill with a high pressure air compressor, air-line lubricator and fine feed control. It is commonly used in large mining operations globally with a choice of hole sizes from 127 mm to 172 mm (5” to 6 ¾”). It is also the drill of choice among many contractors due to its efficiency and extreme reliability on difficult grades.

One of the biggest selling points is its speed and fast set-up with effective pipe handling of 9.14m length pipes with pipe sizes in diameters ranging from 89 -140 mm. Pipe loading is controlled from the operator’s cab with the effective handling of drill pipe contributing to shorter cycle times and getting more holes drilled.

About the DP1500i rig

The Sandvik DP1500i is an intelligent, self-propelled, self-contained, crawler based surface drilling rig equipped with a cabin, movable boom and a rod changer. It is perfect for production drilling in large quarries or open pit mines and construction work sites. It is also well suited for wall control (pre-split drilling) and development works. The rig can be customised to meet special customer requirements.

Investing for the future

The Sandvik D25KS and DP1500i machines will be required to work up 5000 hours per year and in the well-maintained environment of Kansanshi the rigs will see service for many years. “This deal underscores our willingness to work with mines to ensure that they have appropriate equipment at all times that are able to deal with their changing requirements. While a number of underground mines in Zambia have shut down or gone into managed care the surface mines in the North West copper-belt are faring better. Moves such as the drill rig fleet renewal at Kansanshi to more efficient varieties are a positive step and an investment in the future of the mines,” McMaster concludes.

Source: MQWorld

Investee Company News

Power affects FQM copper production in Zambia

Insufficient power at First Quantum Minerals (FQM) mine in the North-Western Province of Zambia, a mineral-rich Southern African country has resulted in reduced copper production, according to sources Thursday.

Dependent upon diesel-driven power plants which supply almost 200MW of electricity to the FQM mining operation at Kalumbila, almost 120 kilometers west of Solwezi the provincial capital needs an extra 30 percent for it to operate at full capacity.

The mine needs to tap power from the national grid of the state-run Zambia Electricity Supply Corporation (ZESCO) after FQM built a 600 kilometer power line from Southern Province through Central Province of that country. It is not yet known when the public utility firm will connect the mine.

At the moment from the time operations at the mine started in September 2015 copper production has been pegged at 150,000 metric tons per year and this is expected to reach 300,000 mt/y as from 2017. Both plated copper and concentrates production is expected to increase further once electricity from the national grid is accessed.

Kalumbila mine as it is known took FQM five years to put together as part of its US$2.1 billion Sentinel investment to that country’s mining sector. The mining company has since installed high cost machinery using one of the most sophisticated technologies in the world for the extraction of low grade concentrates with a 0.5% copper content.

However Sentinel’s contribution to overall copper production in that mineral-rich rural province is quite significant. At 500,000 mt/y North-Western Province is currently the largest copper producer accounting for 70% of the 711,000 mt/y produced in the entire country. Zambia stands as the second largest copper producer in the world.

Source: Mining.com