During the year, the Provisional Liquidator announced plans to restructure the company by forming two subsidiaries, one responsible for the mining while the other would be responsible for processing.
There were no dividends declared during the year under review (31 Dec 2019: Nil).
ZCCM IH has conveyed a message of condolences to the family of its former Chairman and Chief Executive Francis Kaunda, according to a statement from the group.
“The Board, Management and Staff of ZCCM Investments Holdings Plc convey their heartfelt condolences to the Kaunda and Shipoka family on the passing on of Mr. Francis H. Kaunda”, read the statement issued by ZCCM IH Public Relations.
Francis Kaunda published “Selling the family silver” in which the former CEO chronicles his tenure as CEO of one of Africa’s biggest mining conglomerates at the time. At present, the group has shareholdings in a number of mines. Most recently, the group has been seeking a controlling stake in Glencore subsidiary Mopani Copper Mines, according to Zambia’s mines minister and reported by Reuters, after a disagreement over Glencore’s plan to halt production. Furthermore, the group’s ambitions in gold are nostalgic of a return the Francis Kaunda era when ZCCM dominated and consolidated all the mining efforts of Zambia.
Source: Financial Insight
REQUEST FOR EXPRESSIONS OF INTEREST (EOI) FOR A CONSULTANT TO CONDUCT A FEASIBILITY STUDY INTO SETTING UP A PRECIOUS METALS PLANT
1.0 BACKGROUND
ZCCM Investments Holdings Plc (ZCCM-IH) is an investments holding company which has a majority of its investments held in the copper mining sector of Zambia. ZCCM-IH’s majority shareholders are the Industrial Development Corporation (IDC) with 60.3%, Government of the Republic of Zambia (GRZ) with 17.3% shareholding, National Pensions Scheme Authority (NAPSA) with 15% and other shareholders with 7.4%.
The company has a primary listing on the Lusaka Stock Exchange and secondary listings on the New York Stock Exchange, Paris Euronext (Euronext) and London Stock Exchanges.
ZCCM-IH has been mandated by the GRZ to spearhead the development of the gold sector in Zambia. This will be achieved in four (4) ways:
2.0 PROJECT RATIONALE
The Feasibility Study (FS) that ZCCM-IH plans to undertake is one that focuses on the re-establishment of a local PMP, whose principal feed is Anode Slimes from the Electro-Refineries (ERs) in the country. The PMP should, however, also make a provision for processing of other sources of gold, which includes:
The Zambian copper mining industry produces anode slimes (slimes) from the refining of Smelter anodes. These slimes were previously processed within the country from 1977 to 2004 at the Ndola Copper Refinery – Precious Metals Plant (NCR – PMP).
Zambia Consolidated Copper Mines Ltd. (ZCCM Limited) operated the NCR – PMP from 1982 to 2000, when it was privatized and ownership passed to Minerva (Zambia) Limited, a subsidiary of the Binani group. Minerva operated the NCR – PMP from 2000 until 2004, when the plant was shut down.
Subsequent to that, the slimes and other semi-processed precious metals such as the Dore anode produced by KMP have been shipped offshore for processing into final products.
The NCR – PMP produced the following products:
ZCCM-IH now invites eligible firms to indicate their interest in providing the above services. Interested firms must provide information to demonstrate that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions etc.).
Interested firms may obtain further information at the address below during office hours between 08:00 – 13:00 hours and between 14:00 – 17:00 hours local time from Monday to Friday.
A firm will be selected using the Quality and Cost Based Selection (QCBS) method. Interested firms must submit one (01) original and three (03) hard copies of the Expression of Interest to the address below not later than Tuesday, 10th November 2020.
Procurement Manager
ZCCM Investments Holdings Plc
ZCCM-IH Office Park
Stand No. 16806, Alick Nkhata Road
Mass Media Complex Area
P.O. Box 30048
Lusaka.
Email: kabwek@zccmnew.wpenginepowered.com
Download full document here:
NANCY MWAPE, Lusaka
IN TODAY’s contemporary world, gold does not just imply affluence, material wealth and extravagance but it also gives an expression of style and elegance.
The price of the precious metal on the international market has since reached dizzying heights.
On the London Metal Exchange, gold is fetching around US$1,900 per ounce.
Realising that gold mining and export could play significant role in diversifying Zambia’s economy, job creation and economic development, Government has declared gold as a strategic mineral.
However, despite Zambia reporting an increase in gold occurrences, the sector is mainly dominated by artisanal and small-scale miners who in most instances, operate illegally.
The precious metal is smuggled out of the country mostly by foreigners.
To strategise on a comprehensive mechanism to formalise gold mining and trading in Zambia, Rufunsa district has become a serene ambiance for most of Government’s initiatives aimed at formalising the sector.
Rufunsa’s Chintimbwi area councillor Josias Malunga is confident that with Government formalising gold trading in Zambia, the sector will create jobs for the unemployed youths.
“Gold mining is a game- changer. If well managed, it would translate into improved living standards among our people, job creation and families graduating from thatched homes to bricked houses,” Mr Malunga said.
ZCCM-Investments Holdings (IH) chief executive officer Mabvuto Chipata said the formalisation of the sector will ensure activities are undertaken in a sustainable manner that complies with various international standards and CLICK TO READ MORE
THE price of alluvial gold in Zambia has risen to K1,000 per kilogramme from K600 following Government’s decision to formalise the open market by establishing pilot gold trading lines in four districts.
Currently, pilot gold trading is conducted in Rufunsa in Lusaka Province, and Vubwi, Lumezi and Lusangazi districts in Eastern Province.
ZCCM-Investments Holdings (IH) chief executive officer Mabvuto Chipata said: “With the establishment of pilot gold trading lines, miners are no longer exploited as it was before ZCCM-IH went into the market.”
Mr Chipata said the sector has immense potential to create wealth and jobs for local communities.
“We have also seen an increase in the realisation by the miners to be compliant and CLICK TO READ MORE
Source: Daily Mail
COPPERBELT Energy Corporation Plc (CEC) has disclosed that it has continued to grow its business in the Democratic Republic of Congo (DRC), resulting in a 25 per cent sales volume boost in 2019 despite increased pressure on its margins.
Reviewing the Company’s performance last year in the company’s much-delayed 2019 annual report, managing director Owen Silavwe stated that CEC’s business in the DRC market had continued to grow each year, as the Company delivers on meeting the increasing power demand of mining customers in that country.
“Our business in the DRC market, where we work closely with our partner, SNEL, the State-owned utility, has continued to grow year after year as we deliver on meeting the increasing power demand of mining customers in that country. With our local office well established, we continued to step up our marketing activities,” Silavwe wrote in the CEC 2019 annual report released last week.
“We also worked on improving our understanding of the market landscape. Our sales volume for the year increased by 25 per cent though we saw increased pressure on the margins due to factors, such as artificial transmission path constraints in Zambia, which affected overall pricing. We continue to work on resolving some of the transmission path challenges facing the business.”
And Silavwe stated that to avoid grossly affecting the company’s commercial viability, there was need to quickly resolve the challenges surrounding Statutory Instrument (SI) Number 57 of 2020, which made the company’s transmission and distribution infrastructure common carrier, while CEC was still being blocked from accessing Zesco’s power infrastructure.
“…This action [SI 57 promulgation] was immediately followed on 31 May 2020 by a decision by the ERB [Energy Regulation Board] declaring an interim transmission tariff for use of the CEC network, which is about thirty percentage points of the normal CEC transmission tariff. The Company’s view on this matter is that the combination of the actions of the Minister of Energy [Mathew Nkhuwa] and the ERB have the effect of taking away the Company’s property and commercial rights, which if not redressed, may in the medium-term grossly affect the viability of the Company,” Silavwe added.
“With no doubt, government and ERB actions were taken to aid KCM to continue receiving service from CEC without meeting its payment obligations. This has the further effect of allowing the state-owned utility, Zesco, access to the CEC infrastructure at very sub-economic rates. It should be noted that while CEC’s transmission and distributions lines have been declared common carrier, state-owned nationwide infrastructure operated by Zesco has not been declared common carrier and Zesco continues to block CEC’s access to its infrastructure – a matter that remains unresolved despite having been brought to the attention of the Minister of Energy on several occasions.”
Recent information from the Ministry of Energy indicates that the Ministry was still reviewing Zesco’s transmission and distribution infrastructure, which could be considered as common carrier.
According to Ministry of Energy acting Permanent Secretary Sandra Ndhlovu the process to review was ongoing as at September, 2020, but should be concluded soon.
And Silavwe stated that KCM’s failure to settle its outstanding US $144.7 million electricity bill to the CEC reduced the power utility’s profits by 78 per cent last year.
“Non-payment by our largest customer, KCM, constituted the largest risk to the Company’s financial performance during the year. Subsequent to the action in the High Court for Zambia by ZCCM-IH to commence winding up proceedings of KCM, followed by the appointment of the Provisional Liquidator, KCM struggled to pay its electricity bills. This resulted in significant accumulation of arrears. The consequential impairments due to KCM’s debt accumulation negatively affected the Company’s annual financial results,” disclosed Silavwe.
He added that total revenue decreased by three per cent from about US $421.0 million in 2018 to around US $408.0 million in 2019, mainly on account of an eight per cent demand reduction by mine customers in Zambia, while domestic wheeling services to non-mining consumers also reduced by seven per cent year-on-year.
“Profit after tax came in at about US $12.3 million compared to US $55.9 million in 2018, representing an annual decrease of 78 per cent. There was an increase of US $53.3 million in net impairment provision, necessitated by the challenge of the KCM payment default.”
Meanwhile, Silavwe revealed that mining companies’ overall energy demand dropped considerably last year, mainly induced by the 2019 mining fiscal regime, combined with KCM’s operational challenges following the appointment of its provisional liquidator in May last year.
“Our customers consumed about 13 per cent less energy at 3,206GWh compared to 3,673GWh in 2018. This is attributed to operational challenges that some of our customers experienced, triggered by unrelated factors that included the lag in adjusting to changes effected in the mining fiscal regime in 2019, the winding up proceedings of KCM commenced by ZCCM-IH (one of the mine’s shareholders) and planned smelter outages at MCM [Mopani Copper Mines] and KCM for purposes of effecting plant overhaul,” he stated.
Silavwe, however, stated that prospects for a rebound in energy demand within the mining sector remained strong.
“Fundamentally, the prospects for a rebound in demand going forward remain good as MCM returns its smelter to commercial operation and a number of customer expansion and new projects continue to ramp up demand over the next 3 – 5 years. The key downside risks to demand performance is the KCM liquidation, as uncertainty remains with respect to timeframes to resolution of the impasse affecting the business and the effects of the COVID-19 pandemic, which are yet to be fully understood,” he stated.
He further stated that CEC had continued to engage with both government and Zesco in its pursuit of a win-win solution to contractual arrangements following the lapsed Bulk Supply Agreement (BSA).
“Resolving this contractual matter remains a top priority for the Company given its importance, not only to CEC and Zesco, but to the Zambian economy as a whole as it underpins service provision to the entire Copperbelt Province,” stated Silavwe.
JOB ADVERTISEMENT
The Company invites applications from suitably qualified and experienced persons who are innovative, energetic, and performance-driven to fill the position of;
RISK OFFICER – INVESTMENTS (ZH4) ONE POSITION
Please refer to the job description below for detailed information about the job.
Applications together with copies of certificates and detailed curriculum vitae should reach the undersigned not later than Tuesday 20th October 2020
Human Resources Manager
ZCCM Investments Holdings Plc
ZCCM IH Office Park, Alick Nkhata Road
P O Box 30040
LUSAKA
IDENTIFICATION SECTION
JOB TITLE: Risk Officer- Investments
JOB GRADE: ZH4
DEPARTMENT : Risk & Internal Audit
JOB PURPOSE:
To facilitate the review of risks in potential investments.
KEY RESULT AREAS PRINCIPAL ACCOUNTABILITIES (MAIN DUTIES)
| KEY RESULT AREAS | PRINCIPAL ACCOUNTABILITIES (MAIN DUTIES) |
| Strategic Partnerships | Facilitates the identification of risks to the strategic partner and partnership. Facilitates the assessment of impact of the risks to the partner and partnership. Facilitates the identification of the risk mitigants and conducting of the cost/ benefit analysis of the proposed mitigants on the proposed partner and partnership. |
| Project Finance | Facilitates the identification of risks to the project. Facilitates the identification of the risk mitigants and conducting of the cost/ benefit analysis of the proposed mitigants on the project. Facilitates the assessment of impact of the risks to the project. |
| ZCCM-IH initiated investments/projects/support | Facilitates the identification of risks to the ZCCM-IH initiated investments/projects/support. Facilitates the identification of the risk mitigants and conducting of the cost/ benefit analysis of the proposed mitigants on the ZCCM-IH initiated investments/projects/support. Facilitates the assessment of impact of the risks to the ZCCM-IH initiated investments/projects/support. |
| Performance of Investee Companies | Reviews the quarterly Board packs and highlight pertinent issues for the attention of the representative directors. Conducts reviews on the performance of the associate companies and other investments as approved. |
REPORTING RELATIONSHIPS
a) Reports to:
Chief Risk & Internal Audit Officer
ESSENTIAL/DESIRABLE EXPERIENCE/QUALIFICATIONS
a) Professional Qualification:
Grade 12 Certificate
Bachelor’s degree or professional qualification
Professional membership
b) Minimum Relevant Pre-Job Experience:
2 years’ experience in a similar position
c) Skill Specifications:
– Analytical, creativity, and problem-solving skills
– Computer skills
– Report Writing skills
d) Other Attributes (Personality Traits)
– Strong personality& highly confidential
• Attention to detail
• Investigative
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A US$500, 000 copper smelting investment is coming to Chingola’s Kasompe Township if the Zambia Environmental Agency will finally approve the project.
Cupola Furnace Copper Smelter will be set up alone Kasompe road by Aman Processing Zambia Limited with the capacity of producing 1.5 tons of copper blisters per day.
This came to light on Friday during the Environmental and Social Impact Assessment conducted by Envirofuture.
The smelter which will employ about 10 people on permanent basis sits on 150×150 metres piece of land.
Envirofuture Consultant Matamyo Simwanda said the smelter will be environmental friendly and all the waste will be properly dumped in some already existing dump sites in Kasompe.
Kasompe residents Angel Musonda and Patrick Mwansa implored the new smelter owners to employ good corporate policy.
Their many focus on the environmental management, recruitment of the locals and social responsibility.
And Chingola Mayor Titus Tembo who was at hand advised Aman to deal with legal copper owners and not illegal miners.
Mr Tembo said Chingola has seen the increase of young boys’ dropping out of school to venture into illegal mining just because there is a ready market at a backyard smelter.
He said that if the council will hear issues of abrogating the Laws, the local authority will not hesitate to shut it down.
The Mayor also took time to reminder the locals that had demands for a hospital, football pitch and other things that Aman was a small firm with less than US$1 million investment.
He said the community should not over demand but should instead work closely with the smelter owners in order to create a win-win situation.
Financial Performance
The Group reported a profit for the period of ZMW438.9 million (September 2019: ZMW128 million), mainly due to the following:
• Increase in net finance income from ZMW138.7 million recorded in September 2019 to ZMW327.3 million recorded in June 2020. The increase in finance income is due to exchange gains recorded on foreign denominated assets arising from the depreciation of the Zambian Kwacha from an average of ZMW13.9 per US Dollar as at 30 September 2019 to ZMW17.2 per US Dollar as at 30 June 2020.
• Increase in the Group’s share of profit in associate companies from ZMW154.8 million recorded in September 2019 to ZMW 354.7 million in June 2020. This is mainly due to the increase in the profitability of some investee companies in the mining sector such as Maamba Collieries Limited and Kansanshi Mining Plc.
Group total assets increased by 40% to ZMW 20,262 million in June 2020 from ZMW14, 519 million in September 2019. This is mainly attributed to increase in values of investments inassociates as a result of improved performance of Kansanshi Mining Plc, Maamba Collieries Limited and exchange gains arising from translation of US Dollar denominated investments.
KEY OPERATIONS AND STRATEGIC DEVELOPMENTS
Zambia Gold Company
During the period, Zambia Gold Company Limited (“ZGCL”), 51% owned by ZCCM-IH and 49% owned by Ministry of Finance, was granted Small-Scale Mining in the Mwinilunga District. Exploration and mining works are underway. This is in line with its countrywide mandate to manage the programmes and the activities of the gold sector throughout the entire value chain. ZGCL also continued gold trading during the period with gold purchases extended to the Rufunsa District. Further, ZGCL has been working with artisanal miners in the forming and operationalization of gold artisanal mining cooperatives in various districts.
Ndola Lime Company Ltd Restructuring
The restructuring of Ndola Lime Company Limited (“NLC”) commenced. The restructuring was done through a hybrid of Out of Court Settlement and formal insolvency procedures. In this regard, it was decided that a Scheme of Arrangement (“the Scheme”) and reconstruction of creditors be undertaken.
The objective of the Scheme was to create a new company that was free from liabilities and able to operate more efficiently. Therefore, the new company was incorporated and is known as Limestone Resources Limited (“LRL”). Furthermore, the restructuring involved the transfer of the business and assets of NLC to LRL and the consequent issue of equity shares by LRL to the shareholders of NLC.
Maamba Collieries Limited
On 25 March 2019, ZCCM Investments Holdings Plc provided short-term liquidity support amounting to $10 million to Maamba Collieries Limited (MCL) on condition that the amount was payable within 60 days from disbursement, following the receipt of power sale proceeds from ZESCO.
However, despite the agreed conditions, MCL has still not repaid the advanced sum and as a result of this, ZCCM Investments Holdings Plc instituted legal proceedings against MCL (during the period under review) in the Lusaka High Court seeking the payment of the US$10 million plus damages and interest.
Industrial Development Corporation Ltd Group (IDC) Reorganization Transaction
During the period, the Board of ZCCM-IH considered and approved the proposed IDC/ZCCM-IH Group reorganization exercise whereby:
i) IDC transfers its 25% equity stake in Kagem Mining Limited, at fair market value, to ZCCM-IH;
ii) ZCCM-IH transfers its 71.4% equity stake in Investrust Bank PLC, at fair market value to IDC; and
iii) ZCCM-IH transfers its 100% stake in Mushe Milling Limited to IDC at fair market value. These 3 corporate actions listed above will be undertaken simultaneously as a corporate group reorganization exercise involving IDC and ZCCM-IH and constitute the proposed Group Portfolio Rationalization and Reorganization (or the “Group Reorganization “).
The Group reorganization objective is to achieve optimisation of operations and unlock opportunities for synergy within the IDC /ZCCM-IH Group. The Proposed Group Reorganization will enhance and improve operational efficiency and performance of ZCCM-IH, by realigning and streamlining management oversight on its investments portfolio to support and sustain Company growth and unlock value for its shareholders going forward.
The proposed Group Reorganization is subject to approval by shareholders of ZCCM-IH via a general meeting and the statutory regulatory authorities. The Group Reorganisation is expected to be finalized by 31 December 2020.
CEC Africa Investments Limited
Subsequent to the period under review, ZCCM-IH disposed of its 20% shareholding in CEC Africa Investments Limited. Proceeds from the disposal shall be applied on other opportunities in the mining and other mining related sectors of the domestic economy.
OUTLOOK
Copper prices are expected to increase steadily on the back of solid recovery in demand from China, the largest Copper consumer. In addition, low copper inventories in exchange warehouses, disrupted ore supplies from the top producing region in South America due to the COVID-19 pandemic and US Dollar strengthening are contributing to the bullish outlook for Copper.
By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on Thursday 1st October 2020
