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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
Annual Report Summaries, Investee Companies

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). 
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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
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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/
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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
Annual Report Summaries, Investee Companies

Investrust Bank PLC Extract from 2021 Annual Report 

Over the twelve-month period ended 31 December 2021, the Bank’s financial performance indicated an improvement as compared to the prior period, with year-to-date operational profits of ZMW15.07 million (December 2020: Loss of ZMW57.58 million) The improvement is attributed to the Bank successfully implementing the principal initiatives in its turnaround plan and the ZMW286 million capital injection from ZCCM-IH. 

ZCCM-IH, alongside other key stakeholders in Investrust, have continued to make efforts to fully recapitalise the Bank in order to make it competitive and enable it to play its rightful role in the Zambian financial sector. 

The Bank’s share price on the Lusaka Securities Exchange closed the period under review at ZMW15 (2020: ZMW12). 

There were no dividends declared during the period under review (December 2020: Nil). 
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Can ZCCM IH continue to pay a consistent Dividend under the new Strategy?

One of the ways that listed companies ensure that they have the continued support of key stakeholders such as investors in the company is by maintaining regular dividend payments. It is the desire of every investor to realize a return on investment over the investment horizon. This is why during its 78th meeting held on 29 March 2018, the ZCCM-IH Board amended the Company Dividend Policy.

“The ZCCM-IH Policy now states that the Company may pay a minimum of 35% of the unconsolidated Net Profit after Tax (NPAT) for any financial year in which a positive unconsolidated NPAT was recorded”, read a statement in their new 2020 to 2026 strategic document.

Over the past two years of implementing its 2018-2023 strategic plan, ZCCM IH made some notable achievements which included consistent dividend pay-outs to shareholders. Since the 2015 financial year, the group has paid approximately K537 million to shareholders as dividends. Except for 2016, investors were paid a dividend every year as shown in the table below.

Source: ZCCM IH Strategic Plan

Astute investors who have read the new strategic plan will notice that ZCCM IH has also included a strategy towards capital gains. They intend to generate greater shareholder value by ensuring price discovery on our stock exchange listings.

According to Investopedia, “Price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency. The process of price discovery looks at a number of tangible and intangible factors, including supply and demand, investor risk attitudes, and the overall economic and geopolitical environment.”

Market development being one of the key factors that influences price discovery, ZCCM IH will be turning to its listings on the London Stock Exchange and Euronext to achieve this. These are more mature stock exchanges compared to the developing Lusaka Stock Exchange. They will look intently at ZCCM IH’s projections to invest circa USD2.69 billion in the selected sectors in the Strategic Plan period. An investment hypothesis viewing the investment horizon through such as lens will note that it is highly probable for a consistent dividend to be maintained.

 

Source : http://fizambia.com/?p=10036
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Update on arbitration proceedings against ZCCM-IH and Kansanshi Mining Plc (“KMP”) by Kansanshi Holdings Limited (“KHL”)

Further to the cautionary announcement dated 25 November 2020, the Board of ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company” or “the Board”) hereby wishes to inform shareholders and the market that arbitration proceedings against ZCCM-IH and Kansanshi Mining Plc (“KMP”) by Kansanshi Holdings Limited (“KHL”) have progressed.

The arbitration tribunal has issued a Partial Final Award (dated 29 January 2021) in the arbitration, pursuant to which ZCCM-IH’s defence has been successful and various declarations have been granted in ZCCM-IH’s favour.

Certain matters remain outstanding and will be addressed by the tribunal in the Final Award.

Therefore, shareholders are advised that the matter is still on-going and may still have a material effect on the price of the Company’s securities. Shareholders will be updated as the case progresses.
Accordingly, shareholders of ZCCM-IH are advised to exercise caution when dealing in securities of the Company until further information is published.

By Order of the Board
Chabby Chabala
Company Secretary

Source : http://fizambia.com/?p=9978
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Job Advertisement: Investments Manager, Investments Analyst Positions.

ZAMBIA GOLD COMPANY LIMITED

Zambia Gold Company Limited (Zambia Gold) was incorporated on 10 January 2020. Zambia Gold (the ‘Company’) is co-owned by ZCCM Investments Holdings Plc with a 51% stake and the Ministry of Finance owning the remaining 49% stake. Zambia Gold is mandated to lead the development of the gold sector in Zambia by undertaking commercial activities for the benefit of all stakeholders. In order to achieve this objective, Zambia Gold Company will broadly undertake the following activities:

i) Acquire exploration licences and carry out mineral exploration with a focus on gold (either directly or in partnership with other entities)
ii) Develop and operate mines for gold and other precious minerals
iii) Refining, grading, producing, cutting and processing of gold and other precious minerals
iv) Buying and selling of gold and other minerals
v) Support artisanal mining operations and transforming these into commercially viable activities
vi) Pursue value addition opportunities in the precious metals sector

In order to achieve this mission, the Company invites applications from suitably qualified and experienced individuals who are innovative, energetic and performance driven to fill the following positions:

  1. Investments Manager X 1
    Location: Lusaka
    Department: Investments and Markets
    Report to: Head Investments and Markets

    Job Purpose
    To lead the business development team within ZGCL, as well as having overall responsibility for business growth, developing stakeholder’s awareness of ZGCL’s products and services and identifying new business partners.

    Main duties
    a. Grows new markets for ZGCL as well as continued expansion of the existing ones
    b. Executes expansion techniques and meets fiscal targets that will help ZGCL to grow and become successful in achieving its mandated objective.
    c. Acquires an extensive comprehension of present and anticipated market trends and developments, focusing on the key factors that impact the price of gold, other precious metals and base metals on the global market.
    d. Develops strategic ideas or proposals to make ZGCL successful and increase revenue and optimise overall commercial and social returns for the company’s stakeholders.
    e. Identifies resources required and opportunities to expand product usage and develops strategies for achieving accelerated growth in business.
    f. Networks with prospective investors to identify the relevant value propositions and potential areas of synergy consequential to onboarding the prospective investors or strategic partners.
    g. Actively monitors and evaluates the performance of the company’s product, active projects and asset portfolio (including, but not limited to, mining tenements, associates and subsidiaries) and recommends the relevant course action to be taken where applicable.
    h. Undertakes research studies that indicate both tailwinds and headwinds/challenges faced by the industry at present and in the future and illustrates knowledge of the operational attention to detail that will be required to succeed within the industry.
    i. Develops investment grade project proposals across the mineral value chain (from exploration to mining to processing to marketing and trading) in order to realise feasible and viable investment proposals.
    j. Makes the appropriate and cost-effective commercial and financial or investment banking deals.
    k. Drafts, negotiates and closes on all key commercial terms for all brokered deals.
    l. Develop strategies and structures to effectively optimise the participation of artisanal and small-scale miners (ASMs).
    m. Formulation and review of investment guidelines, policies and procedures for monitoring and evaluation of existing projects and investments as well as the identification and onboarding of new projects and investment opportunities.

    Qualifications and experience
    a) Professional Qualifications
    Full Grade 12 Certificate;
    Bachelor’s Degree (or its equivalent) in Investments, Finance, Banking, Mining Economics or related fields.
    A Masters Degree or Professional Qualification (e.g. CFA, CIMA, FRM, ACCA) is an added advantage
    b) Minimum Relevant Pre-Job Experience:
    8 years work experience in financial analysis, corporate finance, investment banking and related fields.

    c) Skill Specifications:
    Negotiation skills
    Communication skills
    Computer skills

    d) Other Attributes (Personality Traits)
    Persuasive and Pleasant
    e) Valid Driver’ s license

  2. Investments Analyst X 1

    Location: Lusaka
    Department: Investments and Markets
    Report to: Investments Manager

    Job Purpose
    To ensure the competitiveness of Zambia Gold Company Limited by devising strategies and investment plans and prevailing conditions in the gold mining and financial sector industry, to ensure that the Company remains a leader within its defined sector.

    Main duties
    a) Continuously collects and interprets data, such as company financial statements, price developments, currency adjustments, and yield fluctuations as it relates to gold mining
    b) Perform financial due diligence, analysis and other actions as outlined with the company’s investment policies, processes and procedures on prospective projects and recommend an investment decision to the Investments Manager.
    c) Actively participate in any feasibility study exercises in relation to developing a greenfield mining opportunity exercise or mineral processing infrastructure projects.
    d) Conducting market research on the gold mining and value chain industry and gather market intelligence to enhance management of various gold projects.
    e) Write research reports that will form a key input to business proposals.
    f) Creating financial and commercial structures that enhance return on investment of projects and financial planning.
    g) Analysing company accounts and financial projections and advise the company on how to best position its investments
    h) Maintain up-to-date information on the latest economic trend in the country, latest and any updates in the financial markets as it impacts on gold mining industry
    i) Provide updates on financial market activities to assess and correctly position the company in the local and the global market.
    j) Closely monitor performance of the company’s product existing and asset portfolio and assess any key (upside or downside) risks thereto.
    k) Provide advice to the Investments Manager on all investment compliance regulations
    l) Draft initial business proposals for presentation to the Investments Manager
    m) Monitor the financial news using specialist media sources
    n) Assist in implementing of company strategic plan to enhance Investment and Trade.
    o) Continuous liaison and interaction with artisanal and small-scale miners (ASMs) to identify key gaps and areas in which ZGC can provide technical assistance.
    p) Tracks all rights and obligations of existing business and financial relationships or agreements to which ZGC is party to ensure that there are no lapses at any given time that could negatively impact company value.

    Qualifications and experience
    a. Professional Qualifications
    Full Grade 12 Certificate
    Bachelor’s Degree Economics, Commerce, Finance, Business Administration or its equivalent. Master Degree and or Chartered Financial Analyst (CFA) level 1 in a relevant field will be an added advantage.

    b. Minimum Relevant Pre-Job Experience:
    4 years experience in a similar position.

    c. Skill Specifications:
    Negotiation skills
    Communication skills
    Computer skills

    d) Other Attributes (Personality Traits)
    Persuasive and Pleasant

    e) Valid Driver’ s license

Zambia Gold Company Limited provides equal employment opportunities to all Zambians on merit without discrimination on the basis of age, gender, colour, tribe, disability, or religion.

Interested, suitably qualified and experienced persons should send their application together with certified copies of Academic and Professional certificates; a detailed Curriculum Vitae with traceable references and copy of the NRC should reach the undersigned not later than Friday, 5th March, 2021.

Only shortlisted candidates will be responded to.

Head Human Resources and Administration
Zambia Gold Company Limited
Subdivision F/377a/30/B
Kudu Road, Kabulonga
LUSAKA

Email: jobs@zccmnew.wpenginepowered.com

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job advertisement for Investments Manager and Investments Analyst positions