Statement from ZCCM IH CEO on the new strategic direction of the investment company

We have developed the ZCCM Investments Holdings Plc (ZCCM-IH) new Strategic Plan 2020-2026 to pursue a mining focused investment strategy that is premised on growth and innovation, with a clear intent to drive the company to investment optimisation and financial excellence. This new strategic plan (the”2020-2026 Strategic Plan” or the “Strategic Plan”) has been motivated by the need for ZCCM-IH to re-focus its investments in mining and the mining value chain.

We have refined the previous sixteen Strategic Goals into four Goals that underpin the company’s strategic impetus, which are to:

1. Extract, and where possible, to add value to our current portfolio;
2. Investment in greenfield and brownfield mining, and mining related ventures across a diverse range of minerals:
i. Commodity diversification to include cobalt, gold, manganese and other base metals, gemstones, limestone, phosphate and rare earth minerals;
ii. Value addition downstream and exploration upstream: and
iii. Energy – to support sustainability of mining operations.

3. Achieve operational and financial excellence; and

4. Generate greater shareholder value by ensuring price discovery on our stock exchange listings.

CEO ZCCM IH Mabvuto Chipata flanked by his team who will be critical in executing the new strategy

In pursuit of our ultimate goal to create a world class investment holding company in Zambia and beyond, I urge all ZCCM-IH staff to play their role in fully implementing this strategic plan.

Sincerely,

Mr Mabvuto T. Chipata
Chief Executive Officer

Zambia’s External stands at $ 12.74 billion, and not $ 27 billion-Ministry of Finance

The government has said that Zambia’s external debt remains at 12.74 billion dollars, contrary to claims that the debt was 27 billion dollars as of 2019.

The Ministry of Finance said that the 12.7 billion dollars was as of end of December 2020.

A statement availed to to the media by the Ministry in Lusaka today said that some media reports made the 27 billion dollars debt claim, following a misrepresentation by the World Bank’s International Debt Statistics published in October 2020.

The statement noted that the 27-billion dollars debt refers to all external debt including debt held by the private sector such as mining companies, banks, and other corporates which government is not in charge.

The Ministry notes that government has no liability for debt held by the private sector, adding that the World Bank’s report makes it clear that government external debt was around 11-billion dollars in 2019 similar to what the government reported.

The Ministry further noted that Zambia engaged in positive and constructive virtual talks with the International Monetary Fund earlier this month, making clear progress towards an agreement on a policy package and path to fiscal and debt sustainability.

The statement further stated that the country hoped the current engagements with various multilateral stakeholders will contribute to its goal of restoring public debt sustainability.

Meanwhile. ZCCM-IH Chief Investments Officer Brian Musonda has said that Mopani Copper Mine (MCM) will significantly contribute to Zambia’s economic revenue, now that the mine is in the hands of Zambians, adding that the mine will have something to show to the nation as positive things will be actualized.

Speaking during Radio Icengelo programme in Kitwe yesterday, Mr. Musonda said that ZCCM-IH working with Mopani management have worked on a strategy to turnaround the mine and make it profitable and that ZCCM-IH financials show that under Glencore the mine has been recording losses since privatisation.

Mr Musonda said that Zambians who have been operating the mine since April last year are upbeat about growing the company and will ensure it is run professionally.

Mr Musonda said that ZCCM-IH management is optimistic that things will be handled well by the Zambians.

“We are very sure that something positive will come out from Mopani because Zambians will ensure that the mine contributes something to the country,” Mr. Musonda said.

“Mopani will continue to produce results and we will give them support as shareholders, the performance of Mopani has improved and the financial status of the mine is encouraging,” he said

The acquisition will result in ZCCM-IH taking full ownership of Mopani. The transaction is scheduled to be fully consummated by 31 March 2021 after the ZCCM-IH Extraordinary general meeting on 30 March 2021 in which ZCCM-IH shareholders will vote on the transaction.

 

Source : https://www.zambianobserver.com/zambias-external-stands-at-12-74-billion-and-not-27-billion-ministry-of-finance/

Vertical drop system a game-changer for emulsion explosives

In a recent expansion project of its Chambishi mine in Zambia, Non-Ferrous China Africa (NFCA) opted to install AECI Mining Explosives’ emulsion vertical delivery system (EVDS) as part of its aim to develop a cost-effective mining operation. Delivering both the emulsion and sensitizer at depths of up to 980m.

NFC Africa Mining PLC (NFCA), is one of the largest underground mines in Zambia’s Copperbelt province. The Mine was initially called Chambishi Copper Mines under the management of the Zambia Consolidated Copper Mines currently called ZCCM-IH. China Nonferrous Metal Company (CNMC) took over later in the year 1998 while it was under care and maintenance.

NFCA has three main mining areas, namely: Main Orebody (MOB), West Orebody (WOB) and the new South East Orebody (SEOB). The SEOB is a massive project which has attracted capital investment of about $830 million (USD).

NFCA and Sandvik Mining and Construction entered into a partnership to develop a highly automated and digitalized Mine in Africa. At the SEOB, we are using intelligent Sandvik latest equipment with new technology. This investment is for equipment, infrastructure and other costs involving mining.

They recently introduced a new shaft at its Zambian-based Chambishi Mine, which included a number of leading edge technologies, such as AutoMine@Lite, AutoMine@fleet, OptiMine and Fuel vertical drop aimed at developing the most cost-effective mining operation.

Having previously engaged AECI Mining Explosives on this system in 2012, NFCA was already aware of the benefits of the EVDS. This integrated system delivers the base emulsion, and sensitizer required directly to a storage facility underground.

These storage facilities are designed to be in close proximity to the underground production areas. This is achieved through a piping system installed in a borehole that connects the underground storage facility to the surface infrastructure.

The company was already using AECI Mining Explosives’ emulsion product underground – the UG200S (sticky) product ideal for up hole charging – and wished to continue reaping the benefits of this emulsion. The Mine requested that both emulsion and sensitizer products be delivered to its 680 m and 980 m mining levels.

Project scope and timelines

AECI Mining Explosives analysed the space available, product demand, and blasting schedule of the client in order to provide an optimal surface and underground storage capacity, as well as a tailor-made delivery system. Various installation options were considered to meet the Mine’s requirements and to ensure that the system could be operated safely and sustainably.

Michael Woolridge, explains that the agreed scope was a joint venture in which AECI Mining Explosives supplied all fabricated plant and equipment, as well as engineering and project management expertise to manage the installation and commissioning of the Project. NFCA was responsible for all installation work on site.

The process design and product testing were managed by a team of AECI Mining Explosives specialists and ELB Engineering, the technology partner for the EVDS. The local AECI Zambia team paved the way for a successful installation and was instrumental in the outcome of the Project.

“A contract was signed with NFCA at the end of July 2018 and work commenced on January 1, 2019,” explains Woolridge.

“The installation was finalised at the end of January 2020, on time and within budget. The project scope included the supply and delivery of all plant and equipment, the preparation of the site, drilling of the borehole, blasting of the underground cavities, as well as installation and commissioning.”

On February 5, 2020, the first emulsion was dropped to the 680 mining level, followed by a drop to the 980 level the following day. The system was immediately available at full capacity and continues to operate as such.

Key benefits

Before the EVDS was installed, the Mine utilised 4-tonne emulsion cassettes that were reloaded on the surface and transported via the cage network to each level.

This methodology was costly, compromised the quality of the product and time consuming, says Woolridge, while delays caused by double handling, cage times and spillages at decanting points were commonplace.

Thus, the critical consideration for the Mine in opting for AECI Mining Explosive’ EVDS was to free up cage time to enable the Mine to increase hoisting capacity, which is the usual bottleneck on most mines, given that you can only mine what you can hoist. The solution would also provide seamless inventory control of emulsion from delivery to the mining face.

“A dedicated vertical delivery system and associated storage capacity allow the client to always have emulsion available ‘on tap’ at both the 680 and 980 mining levels, while at the same time freeing up cage time for other activities.

“The client expected full availability of these benefits on completion of the Project, something AECI Mining Explosive’ has managed to deliver from the first day of commissioning,” says Woolridge.

In a nutshell, the key benefits the client has realised, include improved safety; seamless inventory control; reduced interface with explosives; optimised ordering, delivery and charging units refilling; reduced maintenance, fuel and asset wear as well as reduced risk of theft. Other gains include reduced time and labour resources.

New depths

Explaining how this feat was achieved, Woolridge says underground emulsion explosives used in up-hole applications have two major characteristics to consider.

The first is that such products are shear sensitive and will deteriorate when exposed to shear. Pumping of emulsion explosives over long distances will introduce such shear. Shear can reduce the usability of the product and may lead to pipe blockages.

“The second characteristic is the minimum burning pressure of the product. Unsensitised explosives are relatively insensitive to sources of heat, but above a certain pressure threshold, the emulsion becomes sensitive to the source of energy.

“Should a blockage occur in a vertical line for whatever unforeseen reason, hydrostatic pressure will build up in the vertical line that may exceed this minimum burning pressure,” he explains.

These two characteristics, says Woolridge, have previously restrained the depth of emulsion vertical delivery systems. AECI Mining Explosive’ R&D department has conducted work to develop an emulsion product that can be delivered under specific conditions to minimise the effect of shear. Rheology models have been developed to predict flow characteristics of the product under various conditions.

Getting the better of challenges

Although successfully delivered, the Project was not without its challenges. It was also the first time that AECI Mining Explosives and NFCA worked together on joint design, supply and construction project of this size and nature.

The key to any ground-breaking project is for both parties to acknowledge the unique nature of the Project and the risks and challenges that can be encountered along the way.  Furthermore, the role each party has to play to ensure a successful outcome is of critical importance.

The Project had significance for both parties – it allowed NFCA to optimise its operation further and provided AECI Mining Explosives with the opportunity to demonstrate that it had the capability of delivering its emulsion product via this innovative technology to depths in excess of 900 m.

The risk of misinterpretation of highly technical information due to the language barriers was identified early on in the Project, and efforts were made by all parties to verify any misunderstanding of information.

“The project teams evaluated the requirements of each phase of the installation and agreed on the provision of on-site expertise as required. “We are excited about the prospects this ground-breaking installation holds for our global mining customer base.

It again confirms that we are leading the industry when providing the mining industry with technology leading innovations and solutions,” says Edwin Ludick, Managing Director for AECI Mining.

 

Source: https://www.miningreview.com/southern-africa/vertical-drop-system-a-game-changer-for-emulsion-explosives/

Is ZCCM IH’s new strategy aligned with Government’s Economic Recovery Plan?

When the President of Zambia announced the Economic Recovery Plan (ERP) for the period 2020 to 2023, many sectors were identified that would be key priority areas for the country’s turnaround. ZCCM IH’s key focus area in its new strategy was one of those areas.

ZCCM IH Board Chair, CEO flanked by Ministry of Mines Minister and Permanent Secretary
According to the ERP, available on the Ministry of Finance website, “the mining sector will continue to play a key role in the economy. To ensure predictability and in turn create sustained investment in the sector, Government will review the mining tax policy framework with a view to introducing a more stable mining tax regime. Government, working with the mining houses, will invest in systems to enhance transparency to seal loopholes and accurately quantify as well as value mineral content for tax purposes”.

The announcement of the ERP coincided with ZCCM-IH having an introspective of the journey it had embarked on its previous 2018-2023 Strategy which has been subsequently replaced with a new one. The purpose of the new strategic plan is to take stock of the progress made to date on the previous strategy and to identify and address any emerging opportunities in the mining sector.

On opportunities in the mining sector, the ERP presented an attractive case for the ZCCM IH strategy team.

A number of key measures were presented in the ERP that included:
A consultative mining tax regime review
A desire by GRZ to increase its stake in Konkola Copper Mines and bring on board equity partners
A desire to increase GRZ stake in Mopani Copper Mines
Increase investment in gold mining and processing that would facilitate the purchase of bullion standard gold by the Central Bank for reserves
A desire to improve mining regulation and the formalization of the sector
Creation of value chains for non-traditional minerals
All the above formed part of the foundation of thought process that guided the development of the new strategy. With clarity from fiscal on what the future would hold for the sector, CEO Mabvuto Chipata confidently stated in the new strategy that “they had developed the ZCCM Investments Holdings Plc (ZCCM-IH) new Strategic Plan 2020-2026 to pursue a mining focused investment strategy that is premised on growth and innovation, with a clear intent to drive the company to investment optimisation and financial excellence. This new strategic plan (the”2020-2026 Strategic Plan” or the “Strategic Plan”) has been motivated by the need for ZCCM-IH to re-focus its investments in mining and the mining value chain”.

 

Source : http://fizambia.com/?p=10139

Konkola Copper Mines Plc Extract from 2021 Annual Report

KCM’s challenges continued during the year as the fundamental problems surrounding the underdevelopment of the Konkola Deep Mining Project (KDMP) remained unresolved, resulting in the Company relying on third-party copper concentrates to feed its Smelter and therefore low production volumes. 

ZCCM-IH was successfully granted a court order to appoint a provisional Liquidator to have full control over the operations of the mine. A key mandate of the Provisional Liquidator was to source working Capital for sustenance of operations for KCM. The liquidator on behalf of KCM engaged ZCCM- IH as a shareholder to help find and source working capital for sustenance of operations, out of which KCM signed a metal Prepayment Agreement with Trafigura, one of the largest copper traders in the world, where Trafigura was to pay KCM US$100 million upfront, which would be repaid by way of copper deliveries to Trafigura. The transaction was guaranteed by ZCCM-IH. 

KCM’s revenue for the year ended 31 December 2021 was ZMW27.32 billion (US$1.388 billion), [2020: ZMW19.21 billion) (US$1.031 billion)] compared to budget of ZMW18.67 billion (US$948.5 million). The Company recorded a loss of ZMW9.83 billion (US$499.33 million, [2020: ZMW3.595 billion net loss (US$193 million)]. 

There were no dividends declared during the year under review (2020: Nil). 

ZCCM to garner shareholder approval for Mopani takeover on March 30

Zambia’s mining investment arm ZCCM Investment Holdings will hold an extraordinary general meeting on March 30 for shareholders to vote on the company’s intended acquisition of Mopani Copper Mines.

ZCCM in December announced it interest in acquiring 90% of Mopani’s issued shares from Carlisa Investment Corporation, as represented by its majority owner international miner Glencore.

Carlisa in 2020 wanted to place Mopani on care and maintenance, which led ZCCM, which then held a 10% interest in Mopani, to intervene.

Mopani is one of the longest running and largest copper and cobalt mining operations in Zambia.

Mopani has historically been funded by shareholder loans from Carlisa and other members of the Glencore group. Pursuant to this transaction, ZCCM and Carlisa have agreed that Mopani’s $1.5-billion debt bill will be taken over by ZCCM.

Should shareholders approve the transaction, Glencore and Mopani will enter into offtake agreements, whereby Glencore will acquire up to 100% of Mopani’s production of copper cathodes and copper anode slimes materials at market rates.

Some of this production will be allocated for sale to domestic Zambian value-adding customers.

ZCCM CEO Mabvuto Chipata notes that, as the global energy transition shifts away from hydrocarbons toward renewables, and development in electric vehicles drives copper demand and prices, ZCCM is in a good position as it prepares to officially assume ownership of this asset and mine this critical metal.

The mines owned and operated by Mopani – Nkana and Mufulira – are considered key Zambian assets.

A competent persons report completed by consultancy SRK in January confirmed a total resource of 255-million tonnes at a grade of 2.03% total copper for Nkana and 76.6-million tonnes at 2.2% total copper at Mufulira.

Further development has increased the mine life by 25 years through the integration of new infrastructure, as well as the implementation of an expansion programme over five targets, and three shaft sinking projects, in addition to building a new concentrator capable of a throughput of 4.2-million tonnes a year and recoveries of 94%.

The refinery’s design capacity is 225 000 t/y of copper cathode, placing it among the largest in Africa and one of four major smelters in Zambia.

 

Source : https://www.miningweekly.com/article/zccm-to-garner-shareholder-approval-for-mopani-takeover-on-march-30-2021-03-10

ZCCM-IH job creation excites Copperbelt PS

Mr Nundwe said the new plant which was scheduled to begin its operations in the next two months will employ over 1000 Zambians in the country of which 400 will hold permanent positions.

Speaking to the Daily Nation at the Provincial Offices in Ndola, Mr. Nundwe said government alone could not cater for every single youth in the country hence the reason why ZCCM-IH should be commended for the gesture.

“His Royal Highness Chief Chiwala is very excited about this investment, the Minister is happy and so is the entire administration.

“It is therefore important that all those who will be displaced have their homes built as soon as possible because it is vital that our people are happy and appreciate the investment instead of crying,” he said.

Mr. Nundwe however cautioned ZCCM-IH not to mistreat its local employees but should conduct quality business practices. And ZCCM-IH cement stirring committee Chairperson, Mwila Lumbwe said the Investment consisted of a robust settlement plant that included accommodating would be employees.

Mr. Lumbwe noted that over K141,000 had already been payed to the people in the project area to support their livelihoods.

He said many concerns had arisen concerning the displacement of the people hence a number of meetings were conducted with the Chief who was the leader of the area to find a sustainable solution to the matter.

He said Chief Chiwala had allocated land where ZCCM-IH could build houses for the displaced people with each unit costing approximately K108,000.

 

Source : https://dailynationzambia.com/2021/03/07/zccm-ih-job-creation-excites-copperbelt-ps/

ZCCM-IH Background and History

ZCCM-IH has a rich heritage in the Zambian mining sector which spans more than 100 years. Mining in the country was recorded to have begun with the discovery of copper at Kansanshi in 1899 and commenced commercial mining in 1908. This was followed by the lead and zinc discoveries in Kabwe in 1902 with commercial mining having started in 1906 and 1923 respectively.

The modern history of the Copperbelt began in 1923 when exclusive prospecting concessions were granted to the Anglo-American Corporation for the 3000 square kilometre Rhokana Concession, and to Roan Selection Trust (RST) for the 80 000 square kilometre Rhodesia Congo Border Concession. Anglo American Corporation which was later known as Nchanga Consolidated Copper Mines (NCCM) operated Nchanga, Nkana and Konkola copper mines, while RST which was later known as Roan Consolidated Copper Mines Limited (RCM) operated Roan Antelope, Mufulira and Chambishi copper mines. RST’s first production came from Roan Antelope Copper Mines Limited into Luanshya in 1931, and was followed by the Anglo-American Corporation group’s first production from Rhokana Corporation in Kitwe in 1932.

Following the Mulungushi Reforms of April 1968 and the subsequent proclamation in August 1969, the Zambian Government acquired 51% interests in the companies of the Anglo-American Corporation group on 26 June 1970 and that of RST on 16th August 1970.

The two companies were subsequently merged into one company, namely Zambia Consolidated Copper Mines Limited (ZCCM) on 25th March 1982. ZCCM operated underground and open pit mines, and had copper and its related metals’ plant and metallurgical installations.

All the operating divisions of ZCCM were privatized by 2000 with ZCCM-IH plc retaining
minority shares in the new mining companies as indicated below:

 Konkola Copper Mines Plc- took over Nchanga and Konkola Divisions;
 Mopani Copper Mines Plc took over Nkana and Mufulira Divisions;
 Binani took over Luanshya Division and is now owned by CNMC Luanshya Copper
Mines Plc;
 Chibuluma Mines Plc took over the Chibuluma mine;
 Kabwe Division was closed in 1994;
 NFC Africa Mining Plc took over Chambishi Copper Mine;
 Chambishi Metals Plc took over Chambishi Cobalt Smelting Plant;
 Copperbelt Energy Corporation Plc took over the Electricity Power Distribution
Division; and,
 Kansanshi Mine Plc took over Kansanshi Mine, which had several years of
intermittent dormancy and activity.

 

Source : http://fizambia.com/?p=10065