Zambia’s ZCCM-IH to appoint adviser to restructure Mopani Copper Mines

Zambia’s state mining investment firm ZCCM-IH is in the process of appointing a financial adviser to restructure Mopani Copper Mines and help find an investor for the copper mine, board chair Dolika Banda said on Friday.

The appointment is “imminent”, Banda said, adding that ZCCM should find a new equity partner within the next six months to a year.

Zambia’s President Hakainde Hichilema on Monday said the government is “very close” to finding an investor for Mopani.

Zambia took on $1.5 billion in debt to buy Mopani from Glencore in January 2021 and has been looking for a new investor for the mine since as it needs significant investment to increase output.

“To own this mine requires billions of dollars and we can’t continue to be asking the Zambian treasury to be financing exploration, productivity and technology upgrades,” Banda told Reuters in an interview in Lusaka.

ZCCM-IH will continue helping the company service its loans and working capital, paying salaries and buying inputs, while it works on “long-term solutions”, Banda said.

 

Source: https://www.mining.com/web/zambias-zccm-ih-to-appoint-adviser-to-restructure-mopani-copper-mines/

Mopani Copper Mines Plc Extract from 2022 Annual Report

For the year ended 31st December 2022, Mopani Copper Mines (MCM) recorded cumulative net revenue of ZMW11.85 billion (US$695.26 million), (2021:ZMW14.16 billion (US$877.38 million)). The net loss for the year under review was ZMW5.05 billion (US$296.36 million), (2021:ZMW76.82 billion profit (US$3.90 billion)).  

During the year under review, MCM produced a total of 72,694 tonnes of finished copper (2021: 87,618 tonnes). The smelter underwent a 45-day shutdown from August 2022 to September 2022 for maintenance, refurbishment of critical components and replacement of refractory bricks. The maintenance works set up the smelter to operate for another two-year campaign.  

ZCCM-IH engaged Rothschild & Co, a globally renowned investment bank, in June 2022 to assist with the strategic review of Mopani for the purposes of sustainability, expansion and growth. Rothschild & Co undertaking the assessment in two phases. Under Phase 1, Rothschild & Co. will undertake the restructuring of Mopani in a phased approach with assistance from appropriate legal and technical advisors to maintain Mopani as a going concern and build resilience. Under Phase 2, Rothschild & Co will assist ZCCM-IH in finding a Strategic Equity Partner.  

During the year under review, ZCCM-IH continued to support MCM by providing Corporate Guarantee of up to US$45 million to various banks for the provision of Mopani’s working capital facilities from various banks.  

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

Zambia Gold Company Limited (ZGC) Extract from 2022 Annual Report

Zambia Gold Company Limited (ZGC) reported revenue of ZMW 0.03 million (2021: ZMW 68.29 million) for the year ended 31 December 2022. During the period under review, no Gold sales were made during the year (2021: 62.02 Kg) due to the suspension of mining activities at Kasenseli Gold Mine by the Mines Safety Department (MSD). Net loss recorded for the period was ZMW 51.57 million (2021: net loss of ZMW 0.59 million).  

For the year under review, ZGC did not produce any gold due to the suspension of mining activities at Kasenseli which is the main source of gold production against a budget of 339.3 kg. ZGC has formulated an action plan to address the issues raised by MSD which were conditions set for lifting the suspension. ZGC has also engaged key stakeholders to facilitate and accelerate the opening of the Mine. The action plan has since been completed and submitted to key stakeholders.  

ZGC shall continue conducting exploration activities on its other licences and partnership with third party licence holders. ZGC launched the value addition business model in line with its strategic mandate of developing the gold sub-sector.  

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

Rembrandt Properties Limited Extract from 2022 Annual Report

Rembrandt Properties Limited (Rembrandt) is a Special Purpose Vehicle between ZCCM-IH (49%), Urban Brands Asset Management (25.5%) and Sims Capital Ltd (25.5%). Rembrandt was specifically formed to develop the Leopards Square Hotel, a 74-key (room) hotel. In addition to ZCCM-IH equity contribution, the Company raised about US$2.2million in equity contribution from the other Shareholders and debt finance from ZANACO.  

The project faced several setbacks to completion among them, Covid-19 pandemic, delayed disbursement of loan proceeds and property redesign after the initial anchor tenant Food Lovers left the building. The building is about 95% complete; awaiting completion of the four (4) ground floor rooms, nine (9) upper deck rooms and a sky bar and circa US$200k to take the building to 100% completion. The project, nevertheless, went on soft opening to the general public on 1 June 2022 with conferences and the restaurant all kicking off at the same time as the hotel commenced operations. Since September 2022, the Tenant (Urban Hotel Lusaka) has been grossing an average of ZMW2.5 million per month from operating the property.  

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

Chibuluma Mines Plc Extract from 2022 Annual Report 

Chibuluma remains on lease to LC & Y with no operations of its own as the life of mine has been depleted. The company received a total of US$ 0.26 million in royalty revenue against a budget of US$ 0.23 Million. The company is currently exploring potential areas that would be deemed viable for renewed mining and has engaged Kobold Metals of the USA to apply their advanced Artificial Intelligence technology to enhance chances of discovery.  

PROCESS OF APPOINTING NEW KCM PROVISIONAL LIQUIDATOR UNDERWAY – KABUSWE

MINES and Minerals Development Minister Paul Kabuswe says the process of appointing a new Konkola Copper Mines provisional liquidator is underway, following Milingo Lungu’s resignation. In an interview, Kabuswe said the UPND government had the will, desire and drive to fund KCM and would go out of its way to ensure that the mine succeeds. “That is the route that we are taking, the process of another liquidator is already underway. Of course, those are now processes that should be done by the official receiver, so it is not the

Read more: https://diggers.news/business/2022/03/23/process-appointing-new-kcm-provisional-liquidator-underway-kabuswe/

Consolidated Gold Company of Zambia Limited (CGCZ) Extract from 2022 Annual Report

Consolidated Gold Company of Zambia Limited (CGCZ) is a joint venture partnership between ZCCM-IH (45%) and Karma Mining Services and Rural Development (55%). Incorporated in the year 2020, this Special Purpose Vehicle is focused on developing a gold processing and trading hub in Zambia.  

During the year ended 31 December 2022, the Company produced 50.7kg (2021: 46.6kg) of gold majority of which was sold to Zambia Gold Company. Income for the year ended 31 December 2022 was ZMW50.81 million (2021: loss of ZMW 44.97 million). CGCZ recorded a loss for the year of ZMW8.76 million (2021: -ZMW10.22 million).  

Due to persistent lack of profits as a result of the Company’s lack of control of the supply of gold feedstock, the ZCCM-IH Board approved a divestment from CGCZ. ZCCM-IH will still recover its initial investment of US$1.568 million over a period of three years.  

KANSANSHI DONATION TO CBU A MILESTONE

KANSANSHI Mine’s donation of mining survey equipment to the Copperbelt University (CBU) School of Mines could not have come at a better time than now. This is because survey equipment will not just serve as teaching aids but will help CBU to align its curriculum to industry needs. The modern equipment, one of the best on the market, will also improve teaching standards and practical aspects among students as they prepare to join the mining industry. For a long time, there seemed to be a mismatch between industry and the academic world. People who develop curriculum are usually not in sync with the demands of industry. Even when they are, they do not have appropriate equipment, so students graduate half-baked because they have no practical tools to work with.

As a result, graduates struggle and take long to settle in industry. This tends to make employers uncomfortable. At times, employers suspect that graduates may have forged the qualifications, when not. So, the gesture by Kansanshi is indeed commendable because the mining giant understands the need for learning institutions to have appropriate teaching aids. Rather than join the chorus of complaints about high learning institutions not aligning their curriculums to industry, the mining firm has chosen to walk the talk. Kansanshi has done well to make available state-of-the art equipment, which includes an electronic theodolite with a tripod and accessories critical for underground mine surveys. Assessments by institutions such as CBU are aligned with learning outcomes that help students reach the desired educational levels. The theory and practice reinforce what learners need to master and help them track their progress in the course and afterwards. Kansanshi Mine, as a potential employer, is being proactive by helping CBU shape the curriculum in line with the market demands CBU management will therefore take advantage of the equipment by revising the curriculum for students to have a clear understanding of what is expected of them in the field.

The CBU School of Mines will greatly improve teaching standards and practical aspects among students as they prepare to join the mining industry. The equipment from Kansanshi will aid CBU to review the current curriculum. This will see CBU graduating ready-for-work students. Research on curriculum alignment shows a strong correlation to student achievement. It also helps to modify courses and programmes to better target student post-tertiary success and make better use of human resources. Beyond this is the gesture by Optron Company, which supplied the equipment at a 10 percent discount after they learnt that the equipment was being bought for a learning institution.

The donation by Kansanshi to CBU is also timely as the new dawn administration embarks on economic diversification. Other companies should emulate Kansanshi by working closely with tertiary institutions. Donation may not necessarily be equipment but manpower, educational materials and internships. Apart from the equipment being used by the School of Mines, companies and individuals in need of such equipment should be able to lease it at a fee. Mining will continue to be part of the country’s economic mainstay, hence the need by CBU to continue aligning itself with the mining industry. In fact, the School of Mines should be doing a lot of consultation in the mining sector for the benefit of the lecturers, students and the school.

 

Read more: http://www.daily-mail.co.zm/kansanshi-donation-to-cbu-a-milestone/

Resources Limited (LRL)/ Ndola Lime Company Limited Extract from 2022 Annual Report

Limestone Resources Limited (LRL) was barely operational for the most part of the year as both primary kilns (VK1 and VK2) were not functional. The collapse of refractory bricks on VK1 in 2021 had not yet been resolved while the historical fuel system challenges on VK2 were only resolved in July 2022. These works included multiple modifications to have the kiln operate using coal as the fuel, a much cheaper commodity than Heavy Fuel Oil in the original design.  

ZCCM-IH provided working capital funding to ignite and commission the kiln in August 2022 and the Kiln was fired up in September 2022. Even though the kiln is operational, it takes several months to attain stability in quality and production as different operating parameters are monitored and observed, and adjustments made accordingly. Further, LRL was not adequately capitalised for a long time and therefore continued to experience underperformance of its operating plant and equipment.  

ZCCM-IH continued to support the Company for its turnaround strategies.  

As a result of only being productive for the last 3 months of the year, LRL’s performance was substantially impacted, recording revenue of only ZMW26.8 million (2021: ZMW 119 million). The loss for the year was ZMW90.78 million (2021: ZMW39.7 million).  

There were no dividends declared during the period under review (December 2021: Nil)

CNMC Luanshya Copper Mines Plc (CLM) Extract from 2022 Annual Report

For the year ended 31 December 2022, CLM recorded revenue of ZMW 7.95 billion (US$ 466.26 million), (2021: ZMW 10.17 billion (US$ 516.69 million)). The drop in year-on-year revenue was attributable to a slight reduction in copper prices and production. CLM produced a total of 55,597 tonnes of copper for the year under review compared to copper output of 57,786 tonnes produced in the 2021 financial year.  

For the year ended 31 December 2022, the Company recorded a profit of ZMW1.68 billion (US$ 99.71 million) (2021: ZMW2.83 billion (US$ 143.71 million)).  

Due to the positive equity position, the Company declared dividends of ZMW 1.63 million (US$ 80 million) with ZMW 0.31 million (US$16 million) paid to ZCCM-IH (2021: Nil).