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Zambia Declared Most Peaceful Country In Africa

The concept of peace is difficult to define – and even more difficult to measure. However, since 2006 the Global Peace Index has defined peace as the “absence of violence” and has sought to determine what cultural attributes and institutions are associated with states of peace. The most recent ranking has Zambia as the most peaceful African country. Somalia is considered the least peaceful country followed by South Africa and Sudan.

The Global Peace Index (GPI) defines a nation at “peace” as being one “not involved in violent conflicts with neighboring states or suffering internal wars” – which is sometimes called “negative peace” (i.e., absence of war). This is more measurable and can be used as a starting point to identify the attributes of “positive peace” (structures and institutions that create and maintain peace).

Top 5 peaceful countries in Africa are as follows:

  1. Zambia
  2. Island of Mauritius
  3. Botswana
  4. Chad
  5. Burundi
Investee Company News

GEMFIELS sets another record at Lusaka Emerald auction

At least $14.5 million has been realized at the seventh Kagem local auction of precious stones held in Lusaka last month, Gemfields, has announced.

Chief Executive Officer Mr. Ian Harebottle said the stones auctioned were of lower quality rough emerald and Beryl from Kagem mine in Ndola rural.

“”We’ve set another record for realized per carat prices at an auction of lower quality emerald and beryl, and have now completed seven successful auctions in Zambia, all during the last 22 months.

It is pleasing to see a total of 88% of the total value of the lots placed on offer being bought and Zambian emeralds continuing to enjoy such firm demand.

Gemfields is increasingly becoming the supplier of choice for many of the world’s leading polishing and jewellery-manufacturing houses.

We look forward to our auction of lower quality Montepuez ruby in Jaipur later this month where we believe the market is as excited as we are to be a part of this first ever offering of such a considerable volume of non-domestic ruby rough in India.” Said Harebottle.

A total of 21 companies bid in what was the third Gemfields auction of Kagem emeralds during the current financial year (ending 30 June 2015). The auction was the seventh to be held in Lusaka, a practice which commenced in April 2013.

The auction saw 10.1 million carats of lower quality emerald and beryl extracted from Kagem placed on offer, with 19 of the 26 lots offered being sold, generating auction revenues of USD 14.5 million.

Kariba Minerals also participated for the first time in the Lusaka auction. The firm place an amethyst bid. Gemfields has 50 percent interest in Kariba Minerals.

This auction of rough amethyst from Kariba Minerals Limited (in which Gemfields has a 50% interest) was the first to be held within Zambia. Gemfields has hosted only one prior rough amethyst auction which took place in Jaipur in March 2011 and was used to test demand for amethyst in that market.

The amethyst auction saw 27.7 million carats of higher quality amethyst extracted from Kariba placed on offer, with 13 of the 14 lots offered being sold, generating auction revenues of USD 0.45 million. The amethyst auction realized an overall average value of 1.77 US cents per carat.

Investee Company News

‘KCM’s indebtedness Chocking’

The fate of Konkola Copper Mine, a unit of London listed copper miner, Vedanta Resources Plc, remains uncertain in Zambia as the company is still indebted with other organisations, the latest being a staggering US$59 million owes to Zambia’ Consolidated Copper Mines Investment Holdings (ZCCM IH).

Last year, KCM, Zambia’s leading producer of copper and cobalt was embroiled in a contractual obligation with a power supplier to the mines on the Copperbelt.

The Copperbelt Energy Corp. which provides an average 530 megwatts of power to teh mines on the copperbelet daily, is owed by KCM in excess of US$44 million in commercial debt of which partial payment has been made and the full amount is yet to be settled, a move which caused production interruptions at some of its critical operations at its Chingola and Konkola mines.

There was no immediate comment from CEC’s spokeswoman Chama Kalima or KCM spokesperson Shapi Shachinda how much has been paid towards offsetting the US$44 million. However sources close to the miner say, the miner is struggling to offset the debt, although not yet paid in full.

This is because of various other obligations it needs to undertake, especially that it is also seeking to secure a refund in excess of US$200 million from Government through Zambia Revevenue Authority, owed in unrefunded Value Added Tax (VAT), like many other multinationals based in Zambia that are exporters.

A report by the Auditor General reveals that KCM is yet to resolve the US$59 million it owes the country’s holding company under a Settlement Agreement signed in February 2013.

The report on Accounts of Parastatal Bodies and other Statutory Institutions for the 2013 financial year states further that the mining company did not honour a Settlement Agreement signed between the two entities and has an outstanding balance due to ZCCM-IH amounting to US$59,684,655.

A Settlement Agreement had been signed on February 11, 2013, as a full and final settlement of all claims due under or pursuant to the Price Participation Agreement, which KCM had failed to honour previously, the report adds.

“KCM Plc agreed to pay ZCCM-IH amounts totalling US $119,744,655 over a period of four years in line with the payment schedule as follows: US$46,324,655 to be paid on or before August 31, 2013; US$73,420,000 to be paid on or before September 30, 2016 in accordance with the payment schedule,” part of the report reveals adding.

As of September 2014, KCM Plc had not honoured the Settlement Agreement and had only paid a total amount of US$16,500,000 out of US$76,184,655, which was due as of September 30, 2014, leaving a balance of US $59,684,655.

The report further indicates that although KCM failed to honour the Settlement Agreement, ZCCM-IH, on the other hand, also failed to trigger an enforcement clause stipulated in the Agreement.
The agreement stipulated that in case KCM failed to pay a deferred amount at the next instalment date, ZCCM-IH was permitted to take legal action for monies owed through the English courts or by arbitration in respect of the deferred amount and any interest that would have accrued pursuant to clause 5.

Contrary to clause 5 of the Agreement, as of November 2014, there was no evidence to show that ZCCM-IH had taken any legal action for monies owed.

ZCCM-IH has had “poor performing loans” with Ndola Lime Company Ltd, with the latter having failed to pay the former over US$7 million in an installment due last June. “On 29 July, 2011, ZCCM-IH signed a loan agreement with Ndola Lime Limited an amount of US $26,000,000., adds the report.

A review of the agreement repayment schedule and accounting records revealed that Ndola Lime Limited should have repaid a total of US$7,356,990 as at June 30, 2014. However, Ndola Lime Limited had not made any payments to ZCCM-IH as of August 2014 and ZCCM-IH had not enforced the default clause of the contract,”

Last year, the mining company, with a labour force of over 10,000 workers was embroiled in various debt obligations which also attracted bailiffs to seize property belonging to the company to recover what was due to them in various obligations.

Amid a US$44 million commercial debt with Copperbelt Energy Corporation, KCM was faced with another commercial obligation with Mitchell Drilling International of Australia which through their bailiffs pounced on the property it has in Acacia House in Lusaka demanding to be paid what was due to them.

According to the report by the Post newspaper, the bailiffs acting on behalf of their client besieged Acacia House to try and recover US$5 million owed to the drilling company for the supply of goods and services and demanded 10 percent interest.

This operation follows KCM’s failure to pay for the drilling services Mitchell Drilling rendered after the two parties entered into a contract signed on June 27, 2008. According to the agreement, the paper added, the contract ran between June 2008 and November 2011 during which Mitchell Drilling did surface drilling and reverse circulation at Konkola and Nchanga mines.

Mitchell drilling sued KCM in the Lusaka High Court for breach of contract and failure to settle the outstanding amount of 731, 546.31 Euros that had accumulated. On March 14, 2013, the Lusaka High Court entered judgment in favour of Mitchell Drilling International limited and Mitchell Drilling Zambia limited who were the plaintiffs in the matter ordering KCM to pay the said monies.

order for a lasting solution to the impasse between the miner and power provider, Copperbelt Energy Corporation which had earlier demanded to be paid US$$44 million in commercial obligations for power supplied to the mine.

Nonetheless, the Post reported, KCM had earlier contested the High Court decision by applying for an order for stay of execution pending hearing and determination of the appeal in the Supreme Court.
On June 23, 2013, the High Court granted KCM the said order subject to the mining company paying the judgment sum of K5, 830, 424 into an Escrow bank account within 30 days from the said date, the paper stated.

However, KCM appealed against this ruling arguing mining operations would be affected should they pay the colossal sum as ordered. On September 18, High Court judge Flavia Chishimba dismissed KCM’s conditional stay of execution and ruled that the mining company pays Mitchell Drilling the said outstanding amount with 10 per cent per annum interest., the Post added in its report.

As the KCM indebtedness continues to unfold, Zesco, the sole generator of power in Zambia claims the miner owes the utility in excess of IS$110 million in power supplied to the company, according to former Managing Director Cyprian Chitundu in a report to President Edgar Lungu recently.
Investee Company News, ZCCM-IH News

KCM still owes ZCCM-IH over US$59m – report

KONKOLA Copper Mines still owes ZCCM-IH over US$59 million under a Settlement Agreement that was signed in February 2013, according to the latest Auditor General’s report. The Auditor General’s Report on Accounts of Parastatal Bodies and other Statutory Institutions for the 2013 financial year stated that the mining company did not honour a Settlement Agreement signed between the two entities and has an outstanding balance due to ZCCM-IH amounting to US$59,684,655. According to the report, a Settlement Agreement had been signed on February 11, 2013, as a full and final settlement of all claims due under or pursuant to the Price Participation Agreement, which KCM had failed to honour previously.

“KCM Plc agreed to pay ZCCM-IH amounts totalling US $119,744,655 over a period of four years in line with the payment schedule as follows: US$46,324,655 to be paid on or before August 31, 2013; US$73,420,000 to be paid on or before September 30, 2016 in accordance with the payment schedule,” read part of the report. “However, as of September 2014, KCM Plc had not honoured the Settlement Agreement and had only paid a total amount of US$16,500,000 out of US$76,184,655, which was due as of September 30, 2014, leaving a balance of US $59,684,655.” The report stated that although KCM failed to honour the Settlement Agreement, ZCCM-IH, on the other hand, also failed to trigger an enforcement clause stipulated in the Agreement. “The agreement stipulated that in case KCM failed to pay a deferred amount at the next instalment date, ZCCM-IH was permitted to take legal action for monies owed through the English courts or by arbitration in respect of the deferred amount and any interest that would have accrued pursuant to clause 5. Contrary to clause 5 of the Agreement, as of November 2014, there was no evidence to show that ZCCM-IH had taken any legal action for monies owed,” it stated.

The report also revealed that ZCCM-IH has had “poor performing loans” with Ndola Lime Company Ltd, with the latter having failed to pay the former over US$7 million in an instalment due last June. “On 29 July, 2011, ZCCM-IH signed a loan agreement with Ndola Lime Limited an amount of US $26,000,000. A review of the agreement repayment schedule and accounting records revealed that Ndola Lime Limited should have repaid a total of US$7,356,990 as at June 30, 2014. However, Ndola Lime Limited had not made any payments to ZCCM-IH as of August 2014 and ZCCM-IH had not enforced the default clause of the contract,” stated the report.
Corporate Announcements

ZCCM-IH | Trading Statement – Dec 2014

In accordance with the Lusaka Stock Exchange Limited (“LuSE”) Listings Requirements, the Board of Directors advises the Shareholders of ZCCM Investment Holdings PLC (“the Company”) that for the interim period ended 30 September 2014, the basic earnings per share is expected to be 119% lower, and the headline earnings per share is expected to be 119% lower, than those for the interim period ended 30 September 2013.

The decrease in profitability was largely due to lower turnover on account of lower performance of the Company’s investments in the mining sector amidst continued reduction in copper prices on the International markets. The price of copper has reduced by 7.6% from US$7300 per tonne in September 2013 to US$6748 per tonne at 30 September 2014.

Shareholders are advised that the information contained in this trading statement has not been reviewed or reported on by the external auditors of the Company.

The Company expects its results for the interim period ended 30 September 2014 to be released via the LuSE SENS and published in the local press on or about 23 December 2014. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until publication of the results.

Lusaka, Zambia ‑ 22 December 2014

LUSAKA STOCK EXCHANGE SPONSORING BROKER

STOCKBROKERS ZAMBIA LIMITED
MEMBER OF THE LuSE and REGULATED BY THE SECURITIES AND EXCHANGE COMMISSION OF ZAMBIA

T: +260‑211‑232456
W: www.sbz.com.zm
Industry News

Economy stable, says Stockbrokers Zambia

STOCKBROKERS Zambia Limited says there has been no radical economic shift as the capital market remains stable in the transition period.

Meanwhile, Lusaka Stock Exchange (LuSE) last week recorded a 15.27 percent gain with the turnover standing at K9.2 million.

Stockbrokers Zambia Limited chief executive officer Chanda Mutoni said the outcome of the January 20 election is unlikely to pose radical economic shifts resulting in continued stability in the capital market.

“We are confident that economic fundamentals will remain strong, policy-wise, we do not expect any radical shifts regardless of the outcome of the election. We expect a stable and smooth transition.

“We ushered in a new Government in 2011 but essentially, there was no radical shift policy-wise and we expect it to be the case this time around,” Mr Mutoni said in an interview on Monday.

Giving an overview of the capital market in 2014, he said the sector has performed well citing Lafarge Cement and ZCCM-Investment Holding (IH) as major contributors to the market recording historic transactions.

“We recorded large transactions this year with Lafarge Cement being the largest at US$60 million, the Lafarge transaction alone equalled the turnover of 2013.The ZCCM- IH debt restructuring of over US$400 million largest debt restructuring at the time out of which about US$50 to 60 million was new money raised,” he said.

The market also witnessed a new entrant, Madison Financial Services Plc, raking in about US$12 million while Zambia Sugar began its free-float compliance, which represents the portion of shares of a corporation that are in the hands of public investors as opposed to locked-in stock held by promoters, company officers, controlling-interest investors, or Government. The company raised about US$20 million.

In a separate interview, Stockbrokers Zambia Limited financial analyst Tapiwa Msusa said the market last week recorded about 15.5 percent growth, beating countries like Ghana, which recorded about 8.3 percent.

A total of 2.6 million shares were traded with a turnover of K9.2 million.

The major players included Bata Zambia at 163 percent; ZCCM-IH was at 134 percent and Zambia Breweries at 65.08 percent.

Trades were also recorded in Lafarge at 43.90 percent, Real Estate Zambia at 25 percent and British American Tobacco at 21.05 percent.

Others were Airtel at 19.64 while National Breweries and Madison Financial Services were 18.23 and 12.90 percent, respectively.

However, the commercial banks generally underperformed with Zanaco Bank shares declining by 6.67 percent, Standard Chartered Bank by 0.52 percentage point while Investrust Bank did not record any trading.

Source: Daily Mail
Investee Company News

Murray & Roberts makes progress on synclinorium shaft sinking project

Murray & Roberts Cementation Zambia has reported the completion of the sinking of the Synclinorium Shaft project in Kitwe, Zambia for its client Mopani Copper Mines (MCM).

“The last blast of the Main shaft took place on 30 September 2014 with the shaft at a final depth of 1 280.85 m below the shaft collar,” Murray & Roberts Cementation Zambia Project Manager Neil Mackay, says.

The scope of work comprised a blind sink of a 7m diameter downcast lined shaft with a bulk air cooler level, two electrical cubbies and two stations. The equipping and commissioning of the shaft commenced at the end of October with the erection of a new headgear, winder and roping up the shaft scheduled for 2015.

The Murray & Roberts Synclinorium shaft team has worked closely with the Mopani Copper Mine Synclinorium Project team towards the common goal of helping the project reach the safe stage where it is today.

Noteworthy achievements at the Synclinorium Shaft project to date include a record 96 m of sinking and lining achieved for the month of August 2013 and a Lost Time Injury Free figure of 290 days to date.

A challenge to date has been the pumping of up to 24 000 litres of ground water daily from the shaft. This groundwater is pumped to the surface from where it is diverted into a settlement pond for treatment.

“We intersected a 28 m dyke, from 1 040 m from 1 068 m, and sank through it without incident, a notable achievement given that the rock is very hard and susceptible to scaling. This has necessitated support to within 1 m of the shaft bottom in order to increase worker safety,” Senior Project Manager Wyllie Pearson, says.

Equipment deployed on the project by Murray & Roberts Cementation Zambia includes stage and kibble winders, a five boom jumbo shaft drill rig, a five deck working stage with a cactus grab, two mini excavators and an automated batch plant.

All equipment is serviced in a comprehensive on site workshop by a well trained team to ensure operational excellence and adherence to strengent safety measures.

The current date for commissioning of the shaft is December 2015.

Murray & Roberts Cementation Zambia has also pioneered several health and safety innovations at the Syclinorium Shaft project. These include a new system to replace the old system of hand signals and pull bells to communicate from the shaft bottom to the working stage platform.

The new system consists of a radio installed in a worker’s hardhat, with a built in speaker and microphone to enable hands free operation. The shaft bottom signalling system allows the sinker at the shaft bottom to give the kibble winding engine driver signals from a hand held unit.

Electronic alcohol testing equipment has also been deployed to measure the blood alcohol levels of all workers entering and leaving the site. The system is linked to the entrance turnstile and will not allow a worker to enter if he is in violation of the zero parameter.

Another innovation has been the introduction of directional rope lights on the stage to indicate to all workers which direction the kibble is at any given time.

While the Synclinorium Shaft represents Murray & Roberts Cementation Zambia’s first project for MCM, subsequent similar projects managed from its Kitwe office have underlined the contractor’s excellent track record in the country.

The team is 1 084 strong, comprising accountants, human resources coordinators, training facilitators and raise bore, mining and engineering teams.

Of these 141 are expatriate workers, ranging from management to shaft sinking specialists. A full project management, shaft sinking, raise boring and development portfolio offering is provided by Murray & Roberts Cementation Zambia, in addition to training and technical support.

Source: Mining News Zambia
ZCCM-IH News

ZCCM IH appoints Kasolo as new CEO ahead of the AGM in Lusaka

The Zambia Consolidated Copper Mines Investment Holdings, the country’s forerunner to Zambia Consolidated Copper Mines (ZCCM) has Dr. Pius Chilufya Kasolo as the new Chief Executive Officer of ZCCM-IH, effective 1 October this year, taking over from Mukela Muyunda.

The appointment of Kasolo by the ZCCM IH board, a PhD holder in Economic Geology from the University of Southampton, United Kingdom as well as an MSc in Mineral Evaluation from Nancy Ecole de mine, France comes into effect from 1 October this year, the company says in a statement posted on its website.
Kasolo also holds a BSc in Geology from the University of Zambia. He holds various other business and technical qualifications. Kasolo has over 20 years experience in the mining sector as a consultant and at senior management level, during which he has worked in, and provided consultancy services to, organisations with major international mining interests.

He has undertaken various high level research studies, consultancy assignments and evaluations in the mining industry and other business sectors for the European Union, BHP, the University of Southampton and the Zambia Revenue Authority among others.

Kasolo has held various senior positions in the mining industry including that of Exploration Manager for JCI Limited of South Africa (then Part of the Anglo American Corporation) covering various countries namely Ivory Coast, Burkina Faso, Senegal, Ghana, Mali and Gabon.

Kasolo has served as Director on several companies in Africa including Firestone an Australian Listed company, according to a statement by Cosmas Mwananshiku, the ZCCM IH NON-Executive Director.

Before Kasolo’s appointment, the incumbent was the owner and Chairman of Zambezi Holdings, a diversified Investment company and Chief Executive Officer for Zambezi Mining Services (a concrete lining products firm based in South Africa).

The Board takes this opportunity to congratulate and welcome Dr. Kasolo and is confident that he will contribute greatly towards the achievement of ZCCM-IH’s vision to become Zambia’s leading investment company.

Dr. Kasolo takes over from Mukela Muyunda who was ZCCM-IH’s CEO until 7 August 2014. The Board commended Kasolo’s predecessor, Muyunda for his valuable contribution to the Company during his tenure of office and wished him success in his future endeavors.

Business Week reported that Kasolo had before his appointment by ZCCM IH served as senior exploration geologist for SAMAX Resources Ltd. He is also a geologist and consults to a professional group on project evaluation and labour planning, it adds on its website.

Kasolo has extensive experience in the evaluation and management of mining projects, the formulation of company strategy, resource optimisation and business process analysis.

He worked in London as a consultant geologist for BHP Minerals International Exploration Inc.

He served as senior exploration geological consultant to the European Union (EEC). He has worked for JCI in South Africa and West Africa, as well as for Anglo American as consultant geologist. He serves a Director of Mmakau Mining (pty) Ltd.

Kasolo served as a Non-Executive Director at Firestone Energy Ltd. since January 28, 2011. He has also published various papers on geology.

Source: Zambia Informer
Industry News

Finance Minister announces changes to the mining tax system

In the recent 2015 budget speech last Friday, Finance Minister Alexander Chikwanda announced said ,that the Government would increase underground mining royalties to 8% from 6% as part of an effort to revamp the industry’s tax system.

The new 30% corporate processing and smelting tax introduced aims to maximise revenue collection at several stages of the production stream of the mineral resources

An extra 30% tax will be applied to income earned from “tolling”, industry-speak for an agreement to process another producers raw materials.

In addition to that a 20 percent mineral royalty will now apply on all open pit mining operations in the country as a final tax.

The tax system in the Zambian mining industry has been in the limelight due to the unresolved VAT refund issue with the tax authorities after the mining companies failed to furnish import certificates from destination countries.

Zambia Revenue Authorities has been withholding $600-million in VAT refunds owed to mining firms after.

The Finance Minister however said that iyt would like to see his Government resolve with issue with the mining companies amicably.

Mopani Mines has since threatened to halt mining expansion projects due to this unresolved VAT spat.

Source: Mining News Zambia
Corporate Announcements

ZCCM-IH | Notice of declaration of dividend

At the Annual General Meeting held on 07 October 2014, the shareholders approved a Final Dividend of K1.56 per share for the period ended 31 March 2014.

In accordance with the requirements of the Securities Act (Act No. 38 of 1993) and the Listing Rules of the Lusaka Stock Exchange (“LuSE”), Notice is hereby given that the dividend shall be payable to shareholders in the Company’s books as at close of business on Friday, 07 November 2014 (“Record Date”).

Dividend payments will be effected from Monday, 10 November 2014. Shareholders are advised to take note of the following dates applicable to the Stock Exchange on which their shares are listed and traded..

Shareholders on the LuSE and London Stock Exchange
The transfer books and register will be closed from Wednesday, 05 November to Friday, 07 November 2014 both days inclusive.

Shareholders on the Paris Marché Libre
The transfer books and register will be closed from Thursday, 06 November to Friday, 07 November 2014 both days inclusive.

By Order of the Board

Chabby Chabala
Company Secretary

08 October 2014