ZCCM-IH Investee Company – Maamba Collieries Ltd – Granted Exploration Licensesfor Lithium and other Minerals in Southern Province, Zambia

08th July 2024, Lusaka, Zambia: ZCCM Investments Holdings Plc (ZCCM-IH) is pleased to announce that its investee company, Maamba Collieries Limited (MCL), in which it has a shareholding of 35%, has been issued two Large Scale Exploration Licenses for Lithium and other minerals (amethyst, aquamarine, tantalum and tin) in the Southern Province of Zambia.
MCL intends to commence exploration as soon as possible to ascertain the presence of these minerals in these licence areas.
The licenses are valid for a period of four years during which period MCL plans to carry out detailed exploration to ascertain the presence of mineable resources of the various minerals and thereafter proceed to determine the quantum of resources and reserves if applicable.
These two license areas are located approximately 100 km southwest of MCL’s coal mine in Maamba.
Lithium is part of the critical battery metals that ZCCM-IH has planned to explore for in its 2020-2026 strategic plan. As such the granting of the two licences to its investee company contributes to the strategy to diversify the company’s mineral commodity base.

Maamba Collieries Limited (MEL) Extract from 2023 Annual Report

In 2023, significant developments were observed at Maamba Collieries Ltd (MCL), particularly around the Maamba Power Station and its coal mining operations. MCL operates a modern Coal Handling and Processing Plant (CHPP) that facilitates the production of different coal products with consistent quality. Since its privatization in 2010, MCL has made significant improvements in managing coal dumps to mitigate air pollution caused by spontaneous combustion in the overburden dumps. These efforts in environmental management have been recognized through awards from the Zambia Environmental Management Agency (ZEMA) .  

Maamba Collieries Limited (MCL) reported total revenue of ZMW5.00 billion (US$243.69 million) for the year ended 31 December 2023 (2022: ZMW4.75 billion (US$278.68 million)) and had a profit after tax of ZMW2.57 billion (US$125.04 million) (2022: profit of ZMW1.53 billion (US$89.95 million).  

In 2022, ZESCO, Zambia’s state power utility, reached a settlement in international arbitration with Maamba Collieries Ltd to pay $518 million by August 2024 to settle outstanding arrears for power supplied. This settlement follows arbitration in London where both parties agreed on the terms for resolving the debt. According to the agreement, ZESCO will discharge the arrears in tranches by August 2023, after adjusting for a cash discount of $60 million extended by Maamba. The settlement was reached amicably to address overdue power purchase bills while ensuring that monthly payments for power sales from May 2022 are fully paid to Maamba. As at the year ended 31 December 2023 the outstanding debt from ZESCO to Maamba was USD323.18 million (2022:US$539.93 million).  

The Maamba Power Station, fuelled by low-grade coal from MCL’s Maamba mine, plays a crucial role in Zambia’s energy sector. Currently, the station has two operating units, each with a capacity of 150 MW, commissioned in 2016. There is potential for expansion, with plans to add two more units, each also with a capacity of 150 MW, to meet the growing electricity demand in the country. This expansion, projected to cost around US$400 million, would potentially double the station’s output to 600 MW.  

Maamba Collieries has also explored the possibility of increasing the power station’s capacity to 600 MW to support Zambia’s ambition to become an electricity hub in the region. A technical feasibility study for the expansion was completed, and MCL is seeking third party funding for the project. These developments indicate MCL’s commitment to enhancing energy production capabilities in Zambia, contributing significantly to the national grid and supporting sustainable energy security in the region.  

During the year, Maamba undertook semi-annual maintenance on unit 1 of the 150 MW thermal power units between 4th August 2023 to 17th August 2023. Unit 2 underwent semi-annual maintenance between 25th March 2023 and 7th April 2023 as well as forced shut  

Maamba Collieries has resumed operations and supplying full power to ZESCO – CEO Minwalla

Maamba Collieries Limited (MCL) has completed its scheduled maintenance works on one of its two 150 MW units at the coal-fired thermal power plant three days ahead of schedule and has since resumed operations at full capacity and is supplying full power to ZESCO.

Maamba Collieries Limited has upheld its commitment made to the government and ZESCO, during His Excellency the Republican President of Zambia Mr Hakainde Hichilema’s visit to Maamba on 8th January 2023, to commence operations well before the scheduled date of 20th January 2023. His Excellency inspected the plant to obtain a better understanding of the operations of the thermal power plant and discuss how best such maintenance works should be done going forward without disrupting the energy supply.

“We are happy to inform the nation that the unit was started up and synchronised with the national grid at 09:30 hrs on 17th January, 2023. Both 150 MW power units at Maamba Collieries are now running at full capacity, thanks to sustained efforts by the maintenance teams. The teams worked tirelessly day and night and deployed additional manpower to bring the unit back online three days ahead of the scheduled date for start-up” said MCL CEO Lt Col Cyrus Minwalla (Retd).

“Reducing three days in a 16-day scheduled maintenance shutdown (earlier scheduled up to 19thJanuary) was a herculean task and required our technical teams to work round the clock to bring the unit back online at the earliest, to lessen the impact of the load shedding. This would not have been possible without the support from ZESCO and the government,” Col. Minwalla added

Col. Minwalla explained that the shutdown of the unit, which had earlier been rescheduled on request by the utility, was taken up to allow critical maintenance works, essential for the safety and long-term operational efficiency of the Thermal Power Plant, adding that the modern, eco-friendly coal-fired power plant – the only one of its kind in Zambia – is complex with start-of-the-art systems, and due to the nature of its operations, requires robust periodic maintenance as recommended by the Original Equipment Manufacturer (OEM) to ensure long term sustained availability.

“Maamba Collieries will continue working with ZESCO and Energy Regulation Board to ensure schedules for mandatory maintenance are adjusted as far as possible, to accommodate the national requirement of power and to minimise disruption of the electricity,” he said

He further explained that the present shortage of rainfall in the country has reduced the power generation capacity from hydro plants drastically, and baseload energy producers like Maamba Collieries, which are not dependent on rainfall, play a key role in managing the energy deficit using resources available in Zambia without recourse to imports. The country’s largest independent power producer is presently supplying more than 10 per cent of the nation’s power, due to the reduced hydro-based generation in Zambia.

Col. Minwalla said that as energy is the prime mover of the economy and industry, Maamba Collieries Ltd remains committed to alleviating the energy deficit, including capacity expansion to ensure increased diversity and energy security.

Maamba Collieries Limited (MCL), in Sinazongwe District in Southern Province, is Zambia’s largest coal mine and the nation’s biggest Independent Power Producer (IPP) with Zambia’s only coal-fired Thermal Power Plant (TPP).

The company operates a 300 MW (2 X 150 MW units) modern, eco-friendly coal-fired power plant – the only one of its kind in Zambia – with the capacity to supply 10 percent of the country’s current installed electricity generation capacity.

MCL is owned 65 percent by Nava Bharat Singapore Pte. Ltd and 35 percent by ZCCM-IH, with some US$919 million invested since 2010.

The plant provides diversity in the nation’s energy mix and contributes to the nation’s base load electricity demand with high-availability power that is independent of climate change.

 

Source: Lusaka Times

VP hails Maamba Collieries for taking “huge corporate social responsibility

VICE-PRESIDENT M u t a l e N a l u m a n g o says contrary to certain perceptions, an investor is not any enemy of the people, arguing that there is need to tell the story that investors mean well. And Sinazongwe UPND member of parliament Gift Sialubalo has commended Maamba Collieries Limited (MLCs) for being “the most committed to corporate social responsibility firm in Zambia”. Speaking when she toured MLC, Monday Vice-President Nalumango described the firm’s CRS undertaking as huge. “The corporate social responsibility is huge here. I think every Zambian village or town is looking for a private investor to go to them if everybody behaves in the manner that like Maamba Collieries is behaving, it is huge. We care as government about the displacement because people come, they set up and after they have set up their company, the people are displaced, and they go right back probably in the worst situation like that house you showed me my sister. But look at what you have done, you have respected people in a better housing facility. Is that not what we are looking for to change the livelihoods of our people? And that starts with the housing, we commend,” she said “Colleagues, look at the roads, that is what we expect, and would anybody complain? Because I know our people, when they hear investor, [they think it] is an enemy of the people. But what we need is to tell this story that an investor is not an enemy of the people, an investor means well because what is happening here, and I am so happy because the MP is here, they are the ones who give us all sorts of sleepless nights about everything and everyone but the MP, member of parliament here honorable Sialubalo has confirmed that you have been working.” She said government was grateful that MLC was not just complying with the law but fulfilling people’s expectations. “Now that I am here, I am so grateful, you are truly working to comply with not just the law of our country but also expectations of our people. Like my colleagues that have already commended, and I would invite you to diversify into other areas,” Vice-President Nalumango said.

She encouraged the company to ensure environmental protection in its operations. “And another thing that I should talk about is smart mining that you are doing, being able to even fill up the holes that were left earlier and for that, I commend you. We encourage you to go on and care for your people like your own, you have only one earth on the issue of environmental sustainability. You only have one earth and Zambia sits on this earth so anything you do that makes us avoid climate change is important,” said VicePresident Nalumango.

And Sialubalo also commended MLCs’ commitment to CSR. “Madam, when I visit your office talking about Maamba Collieries, don’t term me praise singer of Maamba Collieries. Maamba Collieries has been a major partner in the development of Sinazongwe. Apart from what you have seen, they constructed a shelter at the same hospital where we are heading to [and] right now, what they are doing is they are patching up Batoka-Maamba road which is in a bad state. I just wrote a letter to them to say as we wait for government to come in, what can we do together [and] within a week, they were on site. They are doing a commendable job, there is no investor, Madam, that I have seen in Zambia who is more committed to CSR rather Maamba Collieries, they deserve our support as government,” said Sialubalo.

Meanwhile, MLC senior electrical engineer Robby Mwelwa said the firm injected over 250 megawatts into the national grid per day and contributed about K2 billion to the national treasury as
at September 30. “We inject 267.6 megawatts into the national grid, so we generate 300, the rest we use it for auxiliary consumption and what remains is what we inject in the national grid. So our
operations here, your honour, are actually in tandem, we collaborate with ZESCO our shut down, whatever we need to do, we are in contact with ZESCO and ZESCO will always advise on what we need to do. This is our thermal power plant performance your honour, as of 30th September 2022, we have been able to inject 9,663 megawatt hours into the national grid,” he said.

We have now been able to inject about K2.166 billion in the national treasury as of 30th September, we are working in tandem with the 8th National Development Plan, and we contribute 10% to the national installed capacity. So, as you can see your honour from the pie chart here, most of the power generated in Zambia is hydro sitting at 81% and for us Maamba we are able to contribute
10% using this coal which was regarded as waste.”

Mwelwa reaffirmed the company’s commitment to CSR. “You honour, here, our philosophy is that as the company grows, we need to grow the community where we are operating in. Our motto is
making a difference. As MCL, we believe in making a difference in our operational areas so for us to be able to achieve or deliver, we have areas which we consider. So for our CSR activities, they are centred on education, health and sports, environmental as well as infrastructure development,” said Mwelwa.

Maamba Collieries Limited (MCL) Extract from 2022 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW4.75 billion (US$278.68 million) for the year ended 31 December 2022 ((2021: ZMW3.96 billion (US$201.71 million)) and had a profit after tax of ZMW1.53 billion (US$89.95 million) ((2021: -ZMW222.03million net loss (2021: US$11.28 million net loss)).  

During the period under review, MCL continued to experience liquidity challenges because of delayed payments from ZESCO which stood at ZMW10.97 billion (US$606.79 million) as 31st December 2022. The Company undertook semi-annual maintenance shut down and forced shut down of unit 1 of the 150 MW thermal power units between 25 May 2022 and 7 June 2022. Nevertheless, plant availability was more than 85% for each of the first nine months of FY2022- 2023.The Company has a positive outlook in the medium to long term after the Arbitral Tribunal issued the Consent Award to MCL on 13 December 2022, which will see ZESCO pay US$447 million to MCL by 31 August 2023.  

There were no dividends declared during the year under review (2021: Nil).  

Arbitration Proceedings against ZESCO  

The Arbitral Tribunal issued the Consent Award on 13th December 2022. Through the settlement, MCL and ZESCO have agreed to irrevocably withdraw all their respective claims brought in the arbitration. The settlement has been recorded in the form of an enforceable final consent award signed and issued by the Arbitral Tribunal on 14th December 2022. The issuance of the final consent award ended the arbitration. The Consent Arbitral Award has since been registered in the High Court of Zambia for any further course of action that the claimants could pursue  

The Consent Award provides that from the total unpaid arrears under the PPA and TA as at 31st October 2022 of US$ 578.06 million, ZESCO will pay to MCL the Agreed Settlement Amount of US$447.56 million after MCL agreed to give ZESCO a discount of US$60 million on the interest portion of the arrears and ZESCO agreed to take on the responsibility of the VAT due on the total arrears amounting to US$70.5 million.  

Details of the Settlement as per Arbitration  

As part of the Settlement ZESCO will pay 50 percent of the Agreed Settlement Amount being US$ 223.78 million as follows:  

a. US$ 10 million to be paid no later than 29th December, 2022;  

b. US$ 20 million to be paid by 31st March, 2023; and  

c. the remainder by 30th April, 2023.  

ZESCO shall pay the remaining balance of the Agreed Settlement Amount no later than 31st August 2023.  

In addition, ZESCO shall continue to pay an additional US$ 750,000 every month towards liquidating the Agreed Settlement Amount.  

Should ZESCO default on any of these payment terms, the entire amount outstanding at the time of default will become payable to MCL immediately.  

ZESCO will indemnify MCL on demand for any liability on the VAT and any penalties and interest that may be paid by MCL in respect of the VAT.  

ZESCO has, in the meantime, discharged a few payments as per the terms of the Award, leaving a balance amount of US$ 414.56 million to be paid under the Award, as of 31 March 2023.  

There were no dividends declared during the year under review (2021: Nil).  

Maamba Collieries Limited (MCL) Extract from 2021 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW3.96 billion (US$201.71 million) for the year ended 31 December 2021 [(2020: ZMW4.39 billion (US$235.78 million)) and had a profit after tax of ZMW222.03 million (US$11.28 million) [(2021: ZMW11.47 billion (2021: US$78.69 million)]. 

Subsequent to year end, MCL continued to experience liquidity challenges because of delayed payments from ZESCO which stood at ZMW 10.97billion (US$ 606.79 million) as 31st December 2022. 

The Company undertook semi-annual maintenance shut down and forced shut down of unit 1 of the 150 MW thermal power units between 25 May 2022 and 7 June 2022. Nevertheless, plant availability was more than 85% for each of the first nine months of FY2022-2023.The Company has a positive outlook in the medium to long term after the Arbitral Tribunal issued the Consent Award to MCL on 13 December 2022, which will see ZESCO pay US$447 million to MCL by 31 August 2023. 

Arbitration Proceedings against ZESCO. 

The Arbitral Tribunal issued the Consent Award on 13th December 2022. Through the settlement, MCL and ZESCO have agreed to irrevocably withdraw all their respective claims brought in the arbitration. The settlement has been recorded in the form of an enforceable final consent award signed and issued by the Arbitral Tribunal on 14th December 2022. The issuance of the final consent award ended the arbitration. The Consent Arbitral Award has since been registered in the High Court of Zambia for any further course of action that the claimants could pursue The Consent Award provides that from the total unpaid arrears under the PPA and TA as at 31st October 2022 of US$578.06 million, ZESCO will pay to MCL the Agreed Settlement Amount of US$447.56 million after MCL agreed to give ZESCO a discount of US$60 million on the interest portion of the arrears and ZESCO agreed to take on the responsibility of the VAT due on the total arrears amounting to US$70.5 million. 

Details of the Settlement as per Arbitration 

(i) As part of the Settlement ZESCO will pay 50 percent of the Agreed Settlement Amount being US$ 223.78 million as follows: 

a. US$10 million to be paid no later than 29th December, 2022; 

b. US$20 million to be paid by 31st March, 2023; and 

c. the remainder by 30th April, 2023. 

(ii) ZESCO shall pay the remaining balance of the Agreed Settlement Amount no later than 31st August 2023. 

(iii) In addition, ZESCO shall continue to pay an additional US$ 750,000 every month towards liquidating the Agreed Settlement Amount. 

(iv) Should ZESCO default on any of these payment terms, the entire amount outstanding at the time of default will become payable to MCL immediately. 

(v) ZESCO will indemnify MCL on demand for any liability on the VAT and any penalties and interest that may be paid by MCL in respect of the VAT. 

ZESCO has, in the meantime, discharged a few payments as per the terms of the Award, leaving a balance amount of US$414.56 Million to be paid under the Award, as of 31 March 2023. 

There were no dividends declared during the year under review (2021: Nil). 

Maamba Collieries Limited (MCL) Extract from 2020 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW4,392.69 million (US$ 235,781million) for the period under review [2019: ZMW2,140.07 million (US$160.97 million)] and had profit after tax of ZMW1,466.08 million (US$78.69 million), [(2019: ZMW601.06 million (US$45.12 million)].  

During the period under review, MCL continued to experience liquidity challenges because of late receipts of payments from ZESCO. Due to liquidity constraints, the company was negatively impacted on its ability to undertake repairs and proactive maintenance of the Thermal Power Plant. Consequently, the company shut-down one of its two plants temporary during the period under review. Power production was thus negatively impacted due to lower plant availability. However, MCL recorded higher profits during the year under review because MCL recorded a net tax credit of US$2.31 million compared to net tax expenses of US$45.00 million in 2019.  

However, it is expected that the company will have a positive outlook in the medium to long-term once the issue 

of non-receipt of payments from ZESCO is resolved.  

There were no dividends declared during the year under review (31 Dec 2019: Nil).  

Maamba collieries – empowering community and workforce safety

Maamba Collieries Ltd (MCL) has scaled-up efforts to stop the spread of COVID-19, implementing stringent preventive safety measures.

SHEQ Manager Yotham Phiri said MCL is treating the global pandemic with utmost seriousness, and taking all measures to ensure the health and safety of its staff, while also sensitising the community.

He said “We are alive to the gravity of the situation and are taking every possible precaution to prevent the COVID-19 infecting our people. Measures we have implemented include daily fumigation of all MCL buildings, equipment and vehicles to minimise contamination, as well as stopping all visitors. Our safety team is working hard to ensure every entry point to the mine and all buildings have sanitising equipment for our staff to use.”

HR and Administration Manager Bwali Ndau highlighted that measures to minimise person-to-person contact, ensuring social distancing and personal hygiene have been put in place. Also, special COVID-19 advisory posters have been posted at multiple locations to remind everyone of necessary precautions. As an added precaution, MCL has advised all employees who had travelled abroad on vacation, not to return to Zambia and has stopped non-essential travel within the country, until the situation returns to normal.

MCL interventions against COVID-19 have also extended to the sensitisation of the local community, special sessions for school children on hygiene, helping the community with materials to ensure hygiene, as well as donating a critical care ventilator for treatment of infected personnel.

Meanwhile, in support of the request of the Sinazongwe Council, MCL is donating much-need materials for the COVID-19 Isolation Site – including N95 masks, disposable overalls, gumboots, gloves as well as hand-washing facilities and personal hygiene items including liquid hand wash soap, detergent and much-needed fuel for vehicles.

Maamba Collieries is a key player in Zambia’s energy sector feeding 300MW into the national grid. Since the start of COVID-19 pandemic, MCL has ensured it remains at the forefront in the fight against the deadly virus in the country, through a strong demonstration of commitment to stringent safety measures and community awareness.

Source: Mining News

Maamba Colliers LTD Extract from 2019 Annual Report

MCL reported total revenue of ZMW2,486.60 million (US$ 222.10 million) for the financial year ended 31 March 2019 [(2018: ZMW1,172.00 (US$122.73 million)] and had profit after tax of
ZMW554.21 million (US$49.50 million) [(2018: ZMW148.87 million (US$15.59 million). The increase in revenue was due to increased demand for high grade coal from customers and steady production from the thermal power plant, while profit was driven by increased revenue and a deferred tax liability.

During the period under review, Maamba experienced liquidity challenges as a result of late receipt of payments from off takers. Efforts were made to restructure the payments of
outstanding receivables indicating commitment from both parties to rectify the situation. Management of Maamba were committed to cost efficiency measures and remains positive as the company looks forward to the restructuring of tariffs that would remedy systemic mismatches in the sector.

There were no dividends declared during the year under review (2018: Nil).

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Maamba moves power plant pumps to keep Zambia powered

ambia’s Maamba Collieries has relocated water pumps to a new location in the Kariba lake, to provide water for the boilers of its 300 MW coal-fired power plant.

The company said in a release on Friday that this was necessitated by falling water levels in the Kariba lake.

Maamba operates two 150 MW power generating units, each consuming  9 000 m3/d of water when running at full capacity.

The company attributed the low water levels in the area to low rainfall during the last wet season in the country.

“Installing the pumps at a deeper location was not easy in crocodile- and hippo-infested waters, as these had to be kept at bay as men worked in knee-deep waters. We often had to seek the assistance of wildlife wardens to ensure safety,” said mining manager Scott Phiri.

The pump relocation was done within three weeks, with temporary power lines and substations having been set up, as well as a road created to transfer the two 132 kW pumps.

Maamba supplies 10% of Zambia’s current installed electricity generation capacity.

Source: Mining Weekly