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Power sales to DRC trigger CEC profit to over K270 million

COPPERBELT Energy Corporation (CEC) Plc has registered a profit of about 18 percent profit due to increased power sales to the Democratic Republic of Congo (DRC), earning over K270 million.

In its summary of unaudited results for six months ended June 30, 2016, the company has continued to influence the electricity market through its network on behalf of Zesco Limited on the Copperbelt, and to operate an interconnector with the DRC.

“The Zambian businesses on consolidated basis posted a profit of K275 million (US$25.9 million) compared to K225 million for the previous.
“Revenue at half year increased by 40 percent from K2.252 million to K3.776 million. This is mainly on account of increased power sales to the DRC mines. Net loss of K1.669 million compared to a net loss of K571 million the previous period,” the report reads.

The company attributes net loss mainly to an exchange loss of K1.140 million (US$107 million) arising from the devaluation of the naira on dollar borrowing and bad debt provision of K516 million (US$52 million).

On performance update, the report says the macroeconomic environment in Nigeria has continued to pose some challenges to the group’s operations as well as low commodity prices which had a negative impact on customers’ liquidity and ability to meet their financial obligations.
Other challenges relating to low commodity prices on the global market have led to some of the customers scaling back on their operations with the effect on the company’s power sales dropping by about 16 percent in Zambia.

The company expects higher demand to return mid to end of 2017 when most of the customers begin to draw power to implement their projects.
“Operationally on the Zambian end, the business continued to operate under the partial force majeure under the bulk supply agreement with our main power supplier and the respective power supply agreements with our mine customers.

“This entails that we can only access 70 percent of our power requirements from Zambian sources while the rest of our requirements have to be sourced outside of the country. It is expected that this regime will continue until year end,” it says.

Source: Daily Mail

Investee Company News

CEC posts 275 million in profits despite challenging business environment

The Copperbelt Energy Corporation has posted a profit of K275 million in the first six months of 2016, up from K225 million record for the previous period.

The increase in profits is mainly attributed to increased power sales to the DRC mines and increased sales at its telecoms unit.

Revenue at half year increased by 40% from K2.252 million to K3.776 million.

This is mainly on account of increased power sales to the DRC mines.

This is according to the company’s half year financial results released yesterday.

CEC however recorded a net loss of K1.669 million compared to a net loss of k571 million the previous period.

“Net loss is mainly attributed to an exchange loss of ZMW1.140 million arising from the devaluation of the Naira on USD borrowing and bad debt provision of K516 million,” it said.

In March 2016, the Company paid a total of K163 million in dividends.

“The macroeconomic environment in Nigeria continued to pose some challenges to the Group’s operations as well as low commodity prices which impact on our customers’ liquidity and ability to meet their financial obligations. The depreciating Naira resulted in increased foreign exchange risk, translating into a loss of K1.140 million,” it said.

“Operationally on the Zambian end, the business continued to operate under the partial force majeure under the Bulk Supply Agreement with our main power supplier and the respective Power Supply Agreements with our mine customers. This entails that we can only access 70% of our power requirements from Zambian sources while the rest of our requirements have to be sourced outside of the country.”

The company said it is expected that this regime will continue until year end.

“The challenges relating to low commodity prices on the global market have led to some of our customers scaling back on their operations with the effect.

Source: Lusaka Times

Investee Company News

CEC records K1.1 Million loss

COPPERBELT Energy Corporation (CEC) has said the macro-economic environment in Nigeria and the depreciating Naira has increased foreign exchange risks resulting in the loss of K1.140 million.

This is according to CEC’s summary consolidated unaudited results for the period ended June 30, 2016 made available to the Times yesterday.

The company said the macro-economic environment in Nigeria continued posing some challenges to the group’s operations as well as commodity prices which impacted on its customers’ liquidity and ability to meet financial obligations.

“The depreciating Naira resulted in increased foreign exchange risks translating into a loss of K1.140 million,” it stated.

Operationally on the Zambian end, the statement said the business in the stated period continued to operate on partial force majeure under the bulk supply agreement with its main power supplier and power supply agreements with mine customers.

“This entails that we can only access 70 per cent of our power requirements from Zambian sources while the rest of our requirements had to be sourced outside the country.

The challenges relating to low commodity prices on the global market have led to some of its customers scaling back on their operations resulting in power sales dropping by 16 per cent.

The company expected high demand to return by mid to end of 2017 when the projects that a number of its customers have been implementing begin to use power.

Source: All Africa

Investee Company News

Nava Bharat Ventures Company Profile – Chart Analysis

Nava Bharat Ventures Limited is an India-based company, which is engaged in the business of power generation, mining, ferro alloys and agri-business. The Company’s segments include Ferro Alloys, Power and Sugar. The Company operates in geographies regions across India, South-East Asia and Africa. The Company’s domestic operations include power, ferro alloys and sugar. The Company’s power plants in Andhra Pradesh, Telangana and Odisha have a total installed capacity of approximately 440 megawatt.

The Company manufactures Manganese Alloys and Chromium Alloys with a production capacity of approximately 200,000 tons per annum. The Company’s sugar plant, distillery, ethanol plant and co-gen plant is located in Samalkot, Andhra Pradesh. The Company’s international operations include power, mining and agri-business. In Zambia, the Company is engaged in the commercial production of coal and has around two units of 150 megawatt power plant under construction.

Nava Bharat Ventures reported a 32% drop in net profit to Rs. 29.2 Cr in Q1, as against Rs. 43 Cr in the same period last year. The Income from Operations went down by 9.3% to Rs. 313.7 Cr, from Rs. 346 Cr previously. Shares tanked by 6% during the day’s trade.

Balance all updates about the stock will be given under this post in the comments form. So, do remember to read the comments below.

Source: Indian Share Tips
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Chibuluma Mines allocates $4.4m to rehab programme

CHIBULUMA Mines Plc says the company has allocated US$ 4.4 million under the rehabilitation programme aimed at restoring the landscape to its original state after the projected closure of the mines in 2022.

Although, the mines accounts for less than two percent (13, 300 tonnes of copper in 2015 out of the country’s output of 711, 000 tonnes of annual Copper production), Chibuluma Mine, is one of Zambia’s most successful mines in safety, productivity and profitability.

The company has had only one fatality in eight years, and it has paid corporate tax every year since 2007, with a total of US$ 112 million paid to date, according to the latest Mining for Zambia report.

Chibuluma Mines head of finance Eustus Munsaka said the biggest challenge is that the current mineral deposit will be mined out within the next few years.

“Unless our ongoing exploration finds a new copper deposit worth exploiting soon, Chibuluma will probably close sometime between 2020 and 2022. All mines have a natural lifespan, and we are about to reach the end of ours,” he said.

He said the company has a multi-million rehabilitation programme that is under way to restore the landscape to its original state.
“Some 33, 000 trees have been planted, carpet grass has been laid, and firebreaks have been built.

“Once the mine stops operating, various structures and buildings will be demolished, roads will be scraped, more land will be replanted with vegetation, and any contaminated land will be neutralised with lime. The entrance to the mine will be sealed to reduce the risk of acid mine drainage,” he said.

After closure, the shareholder Metorex and its parent company Jinchuan will shift their focus to the larger copper-mining investments in the neighbouring Democratic Republic of the Congo.

He said even though closure is still a few years off, Chibuluma has developed a good track record in its contribution to Zambia since it was privatised in 1998.

“The mine has paid taxes to Government, uplifted the community through its corporate social responsibility programme, and stimulated the local economy and job creation through the spending power of its employees,” Mr Munsaka said.

And Chibuluma Mine chief geologist Narendra Shekhawat said small quantities of silver are recovered as a by-product during the copper smelting process and it amounts to about US$16,000 a month.

Source: Daily Mail
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Maamba Collieries says it can generate 600MW if tarrifs are increased

MAAMBA Collieries Limited is ready to double its thermal-generated power at the newly-commissioned plant to 600 megawatts (MW) once tariffs are increased to reflect actual cost of producing electricity.

Currently, the Maamba coal-fired power plant has an installed capacity of 300MW but only 150MW was commissioned last week and connected to the national grid through Zesco Limited, which signed a memorandum of understanding with the company to start supplying electricity to the latter.

Zambian electricity tarrifs are said to be the lowest in the region and cost below US$0.6 cents per kilowatt hour for domestic consumers while the regional average is between US$10 and 20 cents.

Maamba Collieries Limited chairman Ashok Devineni said the company is ready to increase the generation capacity of the thermal power plant from the current 300MW to 600MW if tariffs are increased to reflect actual cost of electricity.

The coal-fired power plant was commissioned last week with 150MW connected to the national grid while the other 150MW will be connected this month-end and it is expected to help reduce the power cuts, which have affected the country recently.

Mr Devineni said the planned increase in electricity generation has to happen to keep pace with the growing demand in the country.

“Maamba can contribute by expanding the capacity of the power plant by an additional 300MW to ensure a total of 600MW if Zesco can guarantee the off-take. Our expansion will be time, cost and resource efficient. It can be set up in 24 months.

“We must, however, acknowledge the fact that creating new generation capacity will be an uphill task unless and until the electricity tariffs are revised to reflect the true cost of procurement for Zesco. Actually, sustaining the present 300MW generation will itself be difficult, given the present miss-match of tariff and cost of supply,” he said.

The plant, whose investment is US$738 million, will help diversify the power generation sources in the country, which is heavily dependent on hydro power, thereby insulating Zambia from energy shortage during the years of low rainfall.

And Zesco Limited managing director Victor Mundende said there is need to migrate and start charging cost-reflective tariffs.

“Once we have cost-reflective tariffs in place, Maamba or any other independent power producer can sell anywhere while Zesco can help by providing its transmission network,” he said.

Source: Lusaka Times
Investee Company News

Maamba Collieries plans to increase power

MAAMBA Collieries Limited is ready to double its thermal-generated power at the newly-commissioned plant to 600 megawatts (MW) once tariffs are increased to reflect actual cost of producing electricity.

Currently, the Maamba coal-fired power plant has an installed capacity of 300MW but only 150MW was commissioned last week and connected to the national grid through Zesco Limited, which signed a memorandum of understanding with the company to start supplying electricity to the latter.

Zambian electricity tarrifs are said to be the lowest in the region and cost below US$0.6 cents per kilowatt hour for domestic consumers while the regional average is between US$10 and 20 cents.

Maamba Collieries Limited chairman Ashok Devineni said the company is ready to increase the generation capacity of the thermal power plant from the current 300MW to 600MW if tariffs are increased to reflect actual cost of electricity.

The coal-fired power plant was commissioned last week with 150MW connected to the national grid while the other 150MW will be connected this month-end and it is expected to help reduce the power cuts, which have affected the country recently.

Mr Devineni said the planned increase in electricity generation has to happen to keep pace with the growing demand in the country.
“Maamba can contribute by expanding the capacity of the power plant by an additional 300MW to ensure a total of 600MW if Zesco can guarantee the off-take. Our expansion will be time, cost and resource efficient. It can be set up in 24 months.

“We must, however, acknowledge the fact that creating new generation capacity will be an uphill task unless and until the electricity tariffs are revised to reflect the true cost of procurement for Zesco. Actually, sustaining the present 300MW generation will itself be difficult, given the present miss-match of tariff and cost of supply,” he said.

The plant, whose investment is US$738 million, will help diversify the power generation sources in the country, which is heavily dependent on hydro power, thereby insulating Zambia from energy shortage during the years of low rainfall.

And Zesco Limited managing director Victor Mundende said there is need to migrate and start charging cost-reflective tariffs.

“Once we have cost-reflective tariffs in place, Maamba or any other independent power producer can sell anywhere while Zesco can help by providing its transmission network,” he said.

Source: Daily Mail

Investee Company News

Maamba commissioning to end load shedding

THE commissioning of 150 megawatts of the 300MW coal-fired power plant at Maamba Collieries Limited is a milestone in the country’s diversification of energy production.

Like President Lungu said during the commissioning of the 150 megawatts yesterday, Zambia is on course to becoming a net exporter of electricity and energy-related products.

We are delighted that commissioning of the plant in Sinazongwe district represents the diversification of the country’s mix which now includes solar, wind, thermal, coal and many others.

Zambia had for a long time depended heavily on hydro energy but the dry spell in the last few years, especially during the 2014- 2015 rainy season, has taught the country lessons in electricity diversification.

The dry spell had a devastating impact on hydro power. The reduction on water levels in our reservoir translated into reduced energy use because power plants operate for fewer hours.

That is why President Lungu said yesterday that the country’s dependence on hydro-power has consequences when we experience low rains, which has justified the diversification towards other forms of energy.

However, diversification should be attractive to the private sector to make their business profitable.

President Lungu hinted yesterday at Government considering cost-effective tariffs in the power sector.

Zambia has the lowest tariffs in the Southern African Development Community and should the status quo continue, the country will continue experiencing power deficits as power developers will continue to shun the country.

So far, Zambia is on course towards power diversification going by the various efforts being made by the government which has provided a conducive environment, as well as its partners and the private sector.

The Industrial Development Corporation (IDC) is in the process of developing at least 600 MW of solar power to help mitigate the country’s electricity shortage.

This is part of Government’s determination to finding a lasting solution to the power crisis.

The International Finance Corporation (IFC) of the World Bank and IDC Zambia have signed a memorandum of understanding to explore the development of two independent 50MW solar power projects in Zambia through the scaling solar programme.

Zambia Sugar Plc, on the other hand, is pondering expanding thermal power generation capacity from the current 30MW to 50MW.

This is in response to the current power reduction on the national electricity grid caused by low water levels in major hydro stations in Zambia.

The sugar company currently produces 30MW of electricity from sugar factory residues.

Through interventions such as Maamba Collieries, the IDC and Ndola Energy Company Limited, which intends to expand its power generation capacity to over 100MW, Zambia is indeed on course to reducing its dependence on hydro energy.

Credit should go to the Patriotic Front government and President Lungu in particular for ensuring that the country diversifies its sources of power.

Power drives the main economic sectors and it is gratifying that the mining, agricultural and manufacturing sectors will now be supplied with the power they need.

That will undoubtedly increase production, which will in turn improve the country’s forex earning and ultimately spur economic development.

The rationing of power has now been effectively ended.

Source: Zambia Daily Mail

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Glencore lifts suspension of output at Zambia copper mine- trade union

Lusaka – Glencore’s Zambian Mopani Copper Mines unit has lifted its suspension of production at an underground mine that followed the death of three miners in an accident, a labour union official said on Saturday.

“The suspension of output across all Mopani Copper Mines operations was lifted at midnight after all employees involved in production were briefed on the importance of following safety rules,” the official from the Mine Workers’ Union of Zambia told Reuters. He declined to be named.

– Reuters

Source: News 24 Zambia

Investee Company News

KCM supports growth for manufacturers of leather products

KONKOLA Copper Mines (KCM) has announced the signing of a Memorandum of Understanding (MoU) with the Copperbelt Leather Industry Cluster to establish the Leather Sector Cottage Industry Clustering and Incubation Project.

The company says the objective of the assistance to the leather association is to facilitate the creation and development of viable cottage industries in the Leather Sector. About 200 Small and Medium Scale Enterprises (SMEs) will also receive training for making leather products like safety shoes and gloves for the mining industry when they build necessary capacity in the future.

The project will target shoe cobblers, shoe makers and the youth who will primarily be identified from the communities where KCM operates.

Commenting on the project, KCM Manager Community Relations Brian Siatubi said: “the signing of the MoU is a significant step in KCM’s plans to help improve the lives of Zambians through economic diversification. The project will contribute to employment generation which is critical to support sustainable livelihoods in the communities.”

Mr Siatubi said KCM would provide the initial capital requirement of one hundred and twenty one thousand kwacha (K121, 000.00) to procure leather-making equipment and machinery required by the Copperbelt Leather Industry Cluster project.

“Our long-term goal is to support the growth of the leather industry so that SMEs can be supplying leather products like safety boots and gloves to the mining sector in the next few years. The support and growth of local industry fits into KCM and Vedanta Resources’ long-term vision to continue mining in Zambia for the next 50 years,” Mr Siatubi said.

Copperbelt Leather Industry Cluster Coordinator Preston Viswamo hailed KCM’s assistance as ‘a major milestone’ in pursuit of the growth of his association.

Commenting on the signing of the MoU, Mr Viswamo said: “it is a milestone because this partnership with KCM will strengthen us in terms of delivering services to the SMEs in the leather sector. The relationship with KCM is going to advance our operations and enable us to grow, especially our members in Chingola. It will allow us to create market linkages for the Chingola cluster with the main one in Kitwe.”

Source: Mwebantu