Konkola Copper Mines

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VEDANTA STILL NOT IN CHARGE OF KCM ASSET; SHACHINDA SETS RECORD STRAIGHT

Konkola Copper Mines Plc remains under the management of the Provisional Liquidator, according to an official statement from the mining company.

“Konkola Copper Mines Plc (“KCM”) remains under the management and control of the provisional liquidator, pursuant to the Court Order dated 21st May 2019”, read a statement issued by General Manager Corporate Affairs Shapi Shachinda on 10th December 2021. “We note a Vedanta Resources Holdings (“Vedanta”) statement dated 7th December 2021 which seeks to give the impression that they have regained management control of the KCM asset”.

According to a media release attributed to Vedanta, Dr Moses Banda was announced as the Spokesperson of Vedanta in Zambia. “Vedanta Resources Holdings Limited and its parent, Vedanta Resources Limited is pleased to announce that Dr Moses Banda, Vedanta’s Country Director as the official spokesperson in Zambia”.

“Dr Banda is a prominent voice Vedanta is extremely pleased to have Dr Banda’s experince on board to focus on rebuilding KCM, protecting 12,000 jobs in KCM and looks forward to engaging with the Zambian communities”, further read the statement.

However, “Members of the public are advised to disregard this deliberate attempt to mislead the nation”, in a rebuttal to the aforementioned statement by Shachinda. “Vedanta remains uninvolved in the running of operations at KCM”.

Sensing that the Vedanta statement may cause concern amongst key stakeholders, Shachinda further stated that “they appealed to all KCM employees, labour unions representing KCM employees, KCM Creditors, Contractors and Suppliers as well as the Company’s business partners and other key stakeholders to remain calm”.

Further Cautionary Announcement from ZCCM IH as at 28th July 2021

The following is an extract of the SENS announcement published in July this year regarding the matter from ZCCM IH’s Company Secretary Chabby Chabala on behalf of the Board of ZCCM IH regarding the Arbitration matter.

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019 concerning the following:

  • ZCCM-IH filing a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”) and the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”);
  • The legal proceedings commenced by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”) against ZCCM-IH on 2 July 2019 in the High Court of South Africa;
  • Vedanta’s applications to the High Court of Zambia to stay the liquidation proceedings and refer the matter to arbitration.

The South African proceedings were pursuant to the Arbitration proceedings which were yet to be commenced and were eventually commenced by Vedanta against ZCCM-IH on 31 July 2019. The Arbitration proceedings (which are confidential as between the parties) are underway and yet to be finally resolved. Shareholders, are however, advised that on 7 July 2021 the Sole Arbitrator made a Partial Final Award (“the Award”). The Award was in some parts in favour of ZCCM-IH and in some parts in favour of Vedanta. The Award has no effect on ZCCM-IH’s application for leave to appeal against the decision of the Court of Appeal announced in ZCCM-IH’s further cautionary announcement of 23 June 2021. Further, the Award has no effect on the position of the Provisional Liquidator, who remains in office.

ZCCM-IH will provide details on this matter in due course.

In the meantime, 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

Issued in Lusaka, Zambia on 28 July 2021

 

Source: https://fizambia.com/vedanta-still-not-in-charge-of-kcm-asset-shachinda-sets-record-straight/
ZCCM-IH News

Invest in job rich sectors-Finance Minister urges IDC

Minister of Finance and National Planning Dr. Situmbeko Musokotwane says the IDC Group of Companies should take advantage of their numbers and invest more in job-rich sectors of tourism and construction, to foster economic transformation and wealth creation.

Speaking during the official opening of the 5th IDC Annual Group Conference held at Avani Hotel in Livingstone over the weekend, Dr. Musokotwane said that it was the Government’s plan that the IDC takes the lead in spearheading value addition and job creation in the key priority sectors of tourism, manufacturing, agriculture and mining.

He encouraged Chief Executive Officers and the Board Members, who were delegates at the Conference, to seize opportunities in the Multi-Facility Economic Zones, farming blocks and other growth projects to move their organizations to the next level.

Meanwhile, speaking earlier, Mr. David Kombe, who is the Chairperson of the Finance and Administration Committee of the IDC Board, said that despite some challenges recorded, including the Covid-19 pandemic, a good number of companies had demonstrated resilience, judging by their overall performance in the 2020 and 2021 financial years.

Mr. Kombe commended the IDC Group Chief Executive Officer as well as Boards and Management teams of the subsidiaries and investee companies, who worked hard to adjust their operations and adapt quickly to the changing business environmental.

Source: https://www.lusakatimes.com/2021/11/29/invest-in-job-rich-sectors-finance-minister-urges-idc/
ZCCM-IH News

Huge Amount Of Capital Required To Resuscitate KCM And Mopani – Musokotwane

Finance Minister Situmbeko Musokotwane has indicated that a large amount of capital is required to revive operations at Konkola Copper Mines (KCM) and Mopani Mines but that the government is working to bring the facilities back up to speed as a matter of urgency. 

Speaking at a post-budget symposium in Lusaka on Monday, Dr Musokotwane said that discussions were already underway to bring about a lasting solution and that the public would be informed of the results in due course.  

Both KCM and Mopani Mines were brought under effective government control by the previous Patriotic Front administration. In May 2019, the government’s investment arm ZCCM-IH seized control of KCM and appointed a liquidator, Milingo Lungu, to oversee the breakup and sale of the mine’s assets. 

Since then the mine has been haemorrhaging money, with productivity falling some 70% since coming under government control. Private owners Vedanta have also challenged the liquidation process at an arbitral tribunal in London and in September, Mr Lungu was arrested for allegedly stealing and laundering more than $2 million during the liquidation process.

Likewise, at Mopani Mines, the government took over operations in January 2021, accruing a further $1.5 billion in debt to purchase the mine from majority owners Glencore. Since then the government has been unable to find a private investor to help run the mine at full capacity. 

On Monday, Dr Musokotwane revealed that the government is also subsidising fuel for the mines to the tune of $21 million per month. The finance minister admitted that this was a major predicament. 

It follows on from Fridays budget, at which the minister announced a tax break for mining companies by allowing them to deduct their royalties payments from income taxes. 

The UPND government has previously indicated that it would be willing to bring private investors back to the mining sector, with Mines Minister Paul Kabuswe telling a meeting at KCM last month, “part of the mess that we are in is because of that liquidation process”. 

“We must never ever bring politics in[to] the private sector,” he emphasised. 

Vedanta, for their part, have promised a further $1.5 billion of investment into KCM if the facility is restored to their private ownership. This is estimated to be enough to restore productivity at the mine back to pre-pandemic levels. 

Source: https://www.openzambia.com/economics/2021/11/2/huge-amount-of-capital-required-to-resuscitate-kcm-and-mopani-musokotwane
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ZCCM IH Signals Intention to continue with KCM Appeal Process

ZCCM IH has advised shareholders that it intends to appeal against the decision of the Court of Appeal and to stay the judgment in the matter relating to KCM, according to a statement from the Company.

According to the statement, “Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019 concerning the following:

  • ZCCM-IH filed a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”), the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”).
  • The legal proceedings commenced on 2 July 2019 in the High Court of South Africa and applications made to the Zambian High Court by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”) to stay the liquidation proceedings and refer the matter to arbitration.

Shareholders are informed that the High Court of Zambia ruled against Vedanta on 7 August 2019. On 13 August 2019 Vedanta appealed to the Court of Appeal of Zambia against the decision of the High Court of Zambia which denied them their application to stay the liquidation proceedings and refer the matter to arbitration. The Court of Appeal on 20 November 2020 ruled in favour of Vedanta and stayed the liquidation proceedings and referred the matter to arbitration.

The statement issued by ZCCM IH Company Secretary Chabby Chabala further stated that “ZCCM-IH will provide details on this matter, as it progresses, in due course”.

Source: http://fizambia.com/zccm-ih-signals-intention-to-continue-with-kcm-appeal-process/
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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/
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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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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Zambian court denies Vedanta attempt to halt Konkola Copper Mines split

(The Southern African Times) – A Zambian court on Monday dismissed a motion by miner Vedanta Resources’ seeking to stop a state-appointed provisional liquidator from splitting up its Konkola Copper Mines (KCM) unit and selling the assets. 

The ruling is a blow to the Indian-owned mining company which has said it would fight any attempt by Zambia to sell KCM to third parties.

Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when the Zambian government, which owns 20% of KCM through state mining investment firm ZCCM-IH, handed control of the mine to a liquidator.

Judge Winnie Sithole-Mwenda discharged a Jan. 18 injunction order which Vedanta had sought to restrain Provisional Liquidator Milingo Lungu from splitting KCM and selling the assets. Lungu has previously said asset disposal is KCM’s last remaining option 

Vedanta Resources declined to comment on the ruling. 

The provisional liquidator said: “As KCM we welcome the ruling.”

Lungu said the order that instated him as provisional liquidator set out powers including the ability to split and sell the company. 

In a restructuring announced in December, Lungu said KCM would be split into two subsidiary companies: KCM SmelterCo Limited and Konkola Mineral Resources Limited, effective Feb. 1. 

While the split was delayed by Vedanta’s injunction order, Lungu on Monday told Reuters he is confident the two entities will begin to operate soon.

Sithole-Mwenda cited procedural reasons in dismissing the order.

“The ex parte Order of Injunction dated 18th January 2021 is, accordingly, discharged forthwith,” she wrote in the ruling. 

The ruling awarded costs to the defendants (the provisional liquidator and KCM) and denied leave to appeal. 

Vedanta and Zambia are still in arbitration proceedings in London over the KCM dispute, which began when the government accused Vedanta of failing to honour licence conditions, including promised investment. 

Vedanta has previously denied that KCM broke the terms of its licence.

Zambia’s Court of Appeal in November ordered a halt to KCM liquidation proceedings, to allow Vedanta and ZCCM-IH to proceed to arbitration. ZCCM-IH is appealing that ruling.

 

Source : https://thesouthernafricantimes.com/zambian-court-denies-vedanta-attempt-to-halt-konkola-copper-mines-split
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Zambian court denies Vedanta attempt to halt Konkola Copper Mines split

LUSAKA (Reuters) – A Zambian court on Monday dismissed a motion by miner Vedanta Resources’ seeking to stop a state-appointed provisional liquidator from splitting up its Konkola Copper Mines (KCM) unit and selling the assets. The ruling is a blow to the Indian-owned mining company which has said it would fight any attempt by Zambia to sell KCM to third parties.

Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when the Zambian government, which owns 20% of KCM through state mining investment firm ZCCM-IH, handed control of the mine to a liquidator.

Judge Winnie Sithole-Mwenda discharged a Jan. 18 injunction order which Vedanta had sought to restrain Provisional Liquidator Milingo Lungu from splitting KCM and selling the assets. Lungu has previously said asset disposal is KCM’s last remaining option

Vedanta Resources declined to comment on the ruling. The provisional liquidator said: “As KCM we welcome the ruling.” Lungu said the order that instated him as provisional liquidator set out powers including the ability to split and sell the company.

In a restructuring announced in December, Lungu said KCM would be split into two subsidiary companies: KCM SmelterCo Limited and Konkola Mineral Resources Limited, effective Feb. 1. While the split was delayed by Vedanta’s injunction order, Lungu on Monday told Reuters he is confident the two entities will begin to operate soon.

Sithole-Mwenda cited procedural reasons in dismissing the order.  “The ex parte Order of Injunction dated 18th January 2021 is, accordingly, discharged forthwith,” she wrote in the ruling.

Source: https://www.reuters.com/article/us-zambia-mining-vedanta-idUSKBN2A12IO
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Cautionary Announcement on KCM from ZCCM IH

Economy, Opinion, ZCCM-Investment Holdings Plc

Written by 

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019, concerning the filing by ZCCM-IH of a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”), the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”) and the legal proceedings commenced in the High Court of South Africa and applications made to the Zambian High Court by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”).

Shareholders are informed that Vedanta appealed against the decision of the High Court which denied them their application to stay the liquidation proceedings and refer the matter to arbitration. The Court of Appeal on 20 November 2020 ruled in favour of Vedanta and stayed the liquidation proceedings and referred the matter to arbitration.

ZCCM-IH intends to appeal against the decision of the Court of Appeal and to stay the judgment.
ZCCM-IH will provide details on this matter, as it progresses, in due course.

In the meantime, 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
Issued in Lusaka, Zambia on07 January 2021

Source: http://fizambia.com/?p=9598