ZCCM IH appoints Kasolo as new CEO ahead of the AGM in Lusaka

The Zambia Consolidated Copper Mines Investment Holdings, the country’s forerunner to Zambia Consolidated Copper Mines (ZCCM) has Dr. Pius Chilufya Kasolo as the new Chief Executive Officer of ZCCM-IH, effective 1 October this year, taking over from Mukela Muyunda.

The appointment of Kasolo by the ZCCM IH board, a PhD holder in Economic Geology from the University of Southampton, United Kingdom as well as an MSc in Mineral Evaluation from Nancy Ecole de mine, France comes into effect from 1 October this year, the company says in a statement posted on its website.
Kasolo also holds a BSc in Geology from the University of Zambia. He holds various other business and technical qualifications. Kasolo has over 20 years experience in the mining sector as a consultant and at senior management level, during which he has worked in, and provided consultancy services to, organisations with major international mining interests.

He has undertaken various high level research studies, consultancy assignments and evaluations in the mining industry and other business sectors for the European Union, BHP, the University of Southampton and the Zambia Revenue Authority among others.

Kasolo has held various senior positions in the mining industry including that of Exploration Manager for JCI Limited of South Africa (then Part of the Anglo American Corporation) covering various countries namely Ivory Coast, Burkina Faso, Senegal, Ghana, Mali and Gabon.

Kasolo has served as Director on several companies in Africa including Firestone an Australian Listed company, according to a statement by Cosmas Mwananshiku, the ZCCM IH NON-Executive Director.

Before Kasolo’s appointment, the incumbent was the owner and Chairman of Zambezi Holdings, a diversified Investment company and Chief Executive Officer for Zambezi Mining Services (a concrete lining products firm based in South Africa).

The Board takes this opportunity to congratulate and welcome Dr. Kasolo and is confident that he will contribute greatly towards the achievement of ZCCM-IH’s vision to become Zambia’s leading investment company.

Dr. Kasolo takes over from Mukela Muyunda who was ZCCM-IH’s CEO until 7 August 2014. The Board commended Kasolo’s predecessor, Muyunda for his valuable contribution to the Company during his tenure of office and wished him success in his future endeavors.

Business Week reported that Kasolo had before his appointment by ZCCM IH served as senior exploration geologist for SAMAX Resources Ltd. He is also a geologist and consults to a professional group on project evaluation and labour planning, it adds on its website.

Kasolo has extensive experience in the evaluation and management of mining projects, the formulation of company strategy, resource optimisation and business process analysis.

He worked in London as a consultant geologist for BHP Minerals International Exploration Inc.

He served as senior exploration geological consultant to the European Union (EEC). He has worked for JCI in South Africa and West Africa, as well as for Anglo American as consultant geologist. He serves a Director of Mmakau Mining (pty) Ltd.

Kasolo served as a Non-Executive Director at Firestone Energy Ltd. since January 28, 2011. He has also published various papers on geology.


Source: Zambia Informer

Finance Minister announces changes to the mining tax system

In the recent 2015 budget speech last Friday, Finance Minister Alexander Chikwanda announced said ,that the Government would increase underground mining royalties to 8% from 6% as part of an effort to revamp the industry’s tax system.

The new 30% corporate processing and smelting tax introduced aims to maximise revenue collection at several stages of the production stream of the mineral resources

An extra 30% tax will be applied to income earned from “tolling”, industry-speak for an agreement to process another producers raw materials.

In addition to that a 20 percent mineral royalty will now apply on all open pit mining operations in the country as a final tax.

The tax system in the Zambian mining industry has been in the limelight due to the unresolved VAT refund issue with the tax authorities after the mining companies failed to furnish import certificates from destination countries.

Zambia Revenue Authorities has been withholding $600-million in VAT refunds owed to mining firms after.

The Finance Minister however said that iyt would like to see his Government resolve with issue with the mining companies amicably.

Mopani Mines has since threatened to halt mining expansion projects due to this unresolved VAT spat.


Source: Mining News Zambia

ZCCM-IH | Notice of declaration of dividend

At the Annual General Meeting held on 07 October 2014, the shareholders approved a Final Dividend of K1.56 per share for the period ended 31 March 2014.

In accordance with the requirements of the Securities Act (Act No. 38 of 1993) and the Listing Rules of the Lusaka Stock Exchange (“LuSE”), Notice is hereby given that the dividend shall be payable to shareholders in the Company’s books as at close of business on Friday, 07 November 2014 (“Record Date”).

Dividend payments will be effected from Monday, 10 November 2014. Shareholders are advised to take note of the following dates applicable to the Stock Exchange on which their shares are listed and traded..

Shareholders on the LuSE and London Stock Exchange
The transfer books and register will be closed from Wednesday, 05 November to Friday, 07 November 2014 both days inclusive.

Shareholders on the Paris Marché Libre
The transfer books and register will be closed from Thursday, 06 November to Friday, 07 November 2014 both days inclusive.

By Order of the Board

Chabby Chabala
Company Secretary

08 October 2014

ZCCM-IH declares K250m dividends

ZAMBIA Consolidated Copper Mines Investment Holdings (ZCCM-IH) shareholders have approved payment of a K250 million dividend to Government.

ZCCM-IH investor relations officer Joseph Lungu announced at a press briefing yesterday that the decision was made at the firm’s annual general meeting (AGM) in Lusaka.

“Today, our shareholders approved payment of a final dividend of K1.56 per share which had been recommended by the directors,” Mr Lungu said.

This is the first dividend that ZCCM-IH has paid since its transformation into an investment holding company in 2000.

Mr Lungu said the dividend has come as a result of the steps government took to convert the debt of K1.8 billion that ZCCM-IH owed it into equity through a clawback rights offer which was completed in March this year.

This has also led to the company raising K257 million as capital.

“This has really positioned the company strongly to exploit investment opportunities that will benefit the shareholders and the nation,” he said.

Mr Lungu said the capital market has recognised the steps the company has taken and this is evidenced by the performance in the share price.

He said this year alone, the company’s share price has gone up by 134 percent, valuing the company at over US$1 billion, which makes it one of the largest companies on the Lusaka Stock Exchange by market capitalisation.

“In fact, since 2011, the share price has gone up by 300 percent which is a remarkable return for our shareholders,” Mr Lungu said.

He also said the company has incorporated a representative of the minority shareholders.

Financially, the company performed well this year with a revenue of K803 million compared to K305 million in the previous year, representing a 163 percent rise.

The company’s profit after tax was K892 million from K567 million, while total assets were K8.7 billion from K7.3 billion.

The group had a revenue of K1 billion and profit after tax of K277 million.


Source: Daily Mail

ZCCM IH group pays US$40 mln in dividends to shareholders

Zambia Consolidated Copper Mines Investment Holdings, the London, Lusaka and Euronex listed group paid US$40 million in dividends to shareholders as share value rose.

The dividend of K1.56 per share to be paid to its shareholders since the company’s formation in 2002, the forerunner to Zambia Consolidated Copper Mines (ZCCM), entails that the owners or shareholders will pocket a total of K25,000,000 (US$40 million) next month during the share pay out, the company said in its report to shareholders during an Annual General Meeting held in Lusaka, Oct. 7.

The remittance of the dividends will be paid to shareholders on or before 7 September this year was achieved after the shareholders, Zambian Government inclusive made to convert the debt that the company owed into equity through the claw back rights offer process which was completed in March this year.

The claw back further entails that it eliminated the debt of K1.829 billion that made it difficult for the company to remit dividends to shareholders including the Government, which owns about 87 percent in the company. It further raised capital to K257 million and also repositioned the company to exploit investment opportunities to benefit the shareholders and the nation at large, the report stated.

The Capital Market further recognized the Company’s efforts to realign itself into a profit making venture as evidenced by the good performance in the share price, which this year alone, allowed the share price to jump to 134 percent, valuing the company at slightly over US$1 billion, making it one of the strongest companies trading its shares on the Lusaka Stock Exchange (LuSE) in capitalisation.

As at 2011, the share price had more than doubled to 300 percent, a remarkable return for the shareholders and with the dividend declared, the turn of events has been historical for the company that had for long grappled with escalating debts.
Earlier this year, the company considered the views and participation of the minority shareholders and decided to consider their participation in the company affairs and since appointed a non executive director, to serve their interests for the first time ever in the history of the company.

During the year 2014, the company revenue as a group rose 163 percent on the year, rising to K803,013,000 from a paltry K305,481,000 recorded a year earlier with profit after tax rising 57 percent to K892,657,000 from a low K567,925,000 earlier.
Total Assets rose 19 percent to K8752,010,000 from K7,359,067,000 reported last financial year, with the group revenue rising to K1,000,538,000 from K520,104,000 in 2013 with profit after tax recording in excess of K277,186,000 from K762,021,000 a year earlier, the report added.

“ZCCM IH is now well placed and poised for the future. With our mission to maximize shareholder value as our guiding principle, we aim to use our strong financial position to make sustainable investments that will continue to benefit our shareholders now and in future,” the report stated.

ZCCM Investments Holdings Plc (ZCCM-IH) is one of Zambia’s prime investments holdings companies with the majority of its investments in the copper mining sector of Zambia.
It is quoted on the Lusaka, London and Euronext Stock Exchanges. The Company’s shareholders are the Government of the Republic of Zambia (GRZ) with 87.6 percent shareholding and private equity holders with 12.4 percent. Minority shareholders are spread throughout the world in various locations.

ZCCM-IH is a successor company to Zambia Consolidated Copper Mines Limited (ZCCM Ltd).Prior to privatization in 2000, ZCCM Ltd was a consolidated copper mining conglomerate which owned and operated a number of mining divisions which at privatization were sold off as independent mining companies.

ZCCM Ltd was majority owned 60.3 percent by the Government of the Republic of Zambia, 27.3 percent by Zambia Copper Investments Ltd (ZCI), an associate company of Anglo American Plc and 12.4 percent by private investors.


Source: Zambian Informer

Murray & Roberts cementation continues to excel at Lubambe copper mine LTD

Murray & Roberts Cementation’s second contract, for the trackless high speed development at Lubambe Copper Mine in Zambia, has been extended by a further two-year period.

The Lubambe Copper Mine which is a joint venture between African Rainbow Minerals, VALE and Zambia Consolidated Copper Mines Investment Holdings, is expected to produce 45 000 tonnes of contained copper at steady state by 2015.

The current contract involves all horizontal development work using trackless high speed technology in Ramps 1, 2, 3, 4 and 5.

In addition, the Murray & Roberts Cementation team was also requested to undertake the vertical development of return airways, service raises and silos and maintenance work on the surface infrastructure, provided by Murray & Roberts Cementation on the first phase of the contract, will continue for the duration of the entire contract.

Murray & Roberts Cementation Senior Project Manager at Lubambe Wyllie Pearson, added that they will continue with several projects that were started under the first contract.

“We will continue the development of infrastructure for two conveyor belt systems and supply and install all temporary compressors and air piping reticulation necessary for the development works and diamond drilling section. Furthermore, we will install all temporary ventilation fans and ducting,” he said.

“We also operate and maintain the owner’s equipment fleet. Six Sandvik TH 540 dump trucks, four Sandvik LH 410 and one Sandvik LH 514 LHD, as well as nine Sandvik TH540 40-ton articulated dump trucks allocated to load and haul. Face charging is performed with three Getman emulsion charging units and the transport and lifting equipment consists of two Getman scissor lifts, a Fermel scissor lift and two Getman cassette handlers. A Fermel grader and Manitou 742 telehandler complete this fleet,” added Pearson.

Allocated to drilling are five Sandvik DS320 double boom split-feed jumbos, a DS320 fixed rail jumbo and a DS 420 long hole rig used for raise mining. The support and supervision vehicles are Toyota Land Cruisers, which have been converted to mining specifications.

“All maintenance work on this equipment as well as the Murray & Roberts Cementation equipment fleet is undertaken in our well-equipped on-site workshop by a highly experienced team of mechanics and technicians, to ensure optimised operability and uptime. All consumables are supplied by the mine,” he revealed.

Pearson said that the contract is characterised by a high level of cooperation between the Murray & Roberts Cementation and Lubambe Copper Mine teams.

“We have developed a mutually beneficial relationship that sees us providing our client with a ready and continuous supply of power and water handling facilities, to ensure efficient interaction within overlapping areas. In addition, the mine provides our team with rock bolts, split sets, mesh and cement, while diesel and lubrication oils are supplied as free-issue items.”

Since the extension of the first contract by 15 months, a total of 24 653 metres has been developed against a target of 23 458 m.

“We have made excellent progress to date and met every one of our scheduled targets. The two main underground tipping arrangements consisting of four tipping points and two silos were completed and commissioned within the scheduled construction dates. A mineral sizer was installed and commissioned ahead of schedule on the tips,” Pearson said.

The six level crusher chamber was rehabilitated and supported with welded mesh and 6 m cable anchors, with the crusher and equipment in place. In order to assist with the main return air system, a series of ventilation raises were developed from the ramp 3 225 Level and two 225 kW surface fans installed and commissioned.

The project has not been without its challenges. Some parts of the Lubambe ore-body can only be accessed by mining through a very weak zone of sand-like material. The sand zone developing and support project comprises four successfully completed sections with a fifth in progress.

These sand zones require specialised support methods developed specifically for Lubambe and are similar to civil tunnelling support methods. Pearson explains that this has been effectively achieved by using Titan soil nails, Becker Arch Sets, 5,6 mm welded mesh and shotcrete as support mediums. Sand is excavated out of the face using a Hyundai 35Z7 mini excavator.

At the request of the client, a drop raising programme was undertaken, with 12 345 metres completed concurrently with contractual development.

Pearson expressed belief that the success of the project to date can be attributed to a number of factors, including the creation of a highly efficient team of experienced and multinational operators, supervisors and management, mostly with previous expatriate experience. The drilling team is a mixture of Australian decline mining specialists and Filipino and South African expats.

The team comprises 405 employees, with approximately 12% expatriates. The Zambian national component of the team is made up of HR staff, surveyors, accounts and administration staff, skilled operators, officials and workmen. The expat component of the crew consists of site management, safety and training staff and expert miners, operators and maintenance staff.

Similarly, training plays a big role in ensuring that the requisite regulations and quality standards are achieved and maintained.

“The training at Murray & Roberts Cementation’s Bentley Park facilities included trackless mining modules. The nature of the ore bodies in Zambia is such that most of the mining is fully trackless, with the exception of the haulage levels. There is a vast pool of fully trained and experienced mine workers available to recruit from, which has greatly simplified the human capital element of the project,” Pearson pointed out.

He said there was a successful transformation from a small highly skilled decline sinking crew, to a team responsible for ore and main development, sometimes in remote and scattered areas of the mine.

Employees also have access to a modern e-learning centre which has been opened at Murray & Roberts Cementation’s Synclinorium shaft sinking project in Kitwe

“This centre provides the same high quality standards as the Bentley Park facility in South Africa. The comprehensive Murray & Roberts electronic library and learning system is available for learners and facilitators alike,” quipped Pearson.

Appropriate and successful training is reflected in the safety record achieved on site, with no Lost Time Injuries (LTI) recorded for the first year. There have also been no fatal incidents on the contract to date, a noteworthy achievement given the nature of the project.

The award of the Synclinorium shaft sinking project, as well as the shaft sinking and development of the Mufulira Deeps project are a true reflection of the company’s reputation in the region.

In addition, Murray & Roberts Cementation’s Raise Boring Division is presently operating in Kansanshi, a further indication of the significant growth in the company’s presence in Zambia.

“Murray & Roberts Cementation has demonstrated complete commitment to its Zambian projects through the formation of a Zambian division with corporate offices situated in Kitwe. We are presently able to offer prospective clients a full shaft sinking and development portfolio, including training and administration from Zambia, with the benefit of technical and logistical support from Murray & Roberts Cementation in South Africa,” Pearson said.


Source: Mining News Zambia

ZCCM-IH Annual Report 2014

The latest ZCCM-IH Annual Report is embedded below. ZCCM-IH is the investments holding company majority owned by the GRZ and holds minority equity interests in the successor mining companies created after the unbundling and privatization of Zambia Consolidated Copper Mines (ZCCM) in 2000. It is public listed on the LuSE. Its shares also trade on the Euronext stock exchange in Paris.

Under the current shareholding structure, GRZ holds 87.53 % whilst 12.47% is held by minority shareholders. Following privatization of ZCCM in 2000, ZCCM-IH inherited debt of approximately USD 363 million on its balance sheet. And for the next ten years the company was technically insolvent – and therefore unable to pay any dividends to its shareholders on account of this legacy debt.

In 2013, ZCCM-IH undertook a major internal restructuring exercise to expunge the legacy debt from its balance sheet. This was done via a share rights offer. Prior to the balance sheet clean up, the share price of ZCCM- IH on the LuSE was K12.50 on 2nd January, 2013. After the successful rights offer of May 2014 and elimination of the legacy debt from the balance sheet, the price of ZCCM –IH shares on the LuSE has risen significantly and was K40 as at the beginning of October, 2014. This represents a capital gain of 220% over a period of 21 months.

With a clean balance sheet, ZCCM-IH is now in a position to declare and pay dividends to its shareholders based on the dividend revenues it receives from its investee companies and operating subsidiaries. ZCCM-IH recently did just that. It declared dividend – and at the AGM held on 7th October, 2014, shareholders approved a total dividend of K250 million which is approximately US$40 million .With a market capitalization of US$ 1 billion, ZCCM-IH is now the company with the largest market capitalization on the LuSE.

In the 2015 Zambia national budget, Government announced that it ntends to scale down its shareholding in ZCCM-IH from 87.53% to 60%. This sell down of 27.53 % shareholding represents approximately US$ 270 million in current value terms. The plan is to sell the shares to “Zambian citizens”. The net effect is that the free float of ZCCM-IH will increase significantly from the current 12.47% to 40%. This will improve the liquidity in the stock and on the LuSE as a whole.

We shall return to the question of ZCCM-IH in due course.

AUTHOR
Chola Mukanga
Economist | Researcher


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ZCCM-IH | Appointment of Chief Executive Officer

The Board of Directors of ZCCM Investments Holdings Plc (ZCCM-IH) is pleased to announce the appointment of Dr Pius Chilufya Kasolo as the new Chief Executive Officer of ZCCM­IH with effect from 1 October 2014.

Dr. Kasolo holds a PhD in Economic Geology from the University of Southampton, United Kingdom as well as an MSc in Mineral Evaluation from Nancy Ecole de mine, France. Dr. Kasolo also holds a BSc in Geology from the University of Zambia. He holds various other business and technical qualifications.

Dr. Kasolo has over 20 years experience in the mining sector as a consultant and at senior management level, during which he has worked in, and provided consultancy services to, organisations with major international mining interests. He has undertaken various high level research studies, consultancy assignments and evaluations in the mining industry and other business sectors for the European Union, BHP, the University of Southampton and the Zambia Revenue Authority among others. He has held various senior positions in the mining industry including that of Exploration Manager for JCI Limited of South Africa (then Part of the Anglo American Corporation) covering various countries namely Ivory Coast, Burkina Faso, Senegal, Ghana, Mali and Gabon. Dr. Kasolo has served as Director on several companies in Africa including Firestone an Australian Listed company.

Prior to this appointment, Dr. Kasolo was owner and Chairman of Zambezi Holdings, a diversified Investment company and Chief Executive Officer for Zambezi Mining Services (a concrete lining products firm based in South Africa). The Board takes this opportunity to congratulate and welcome Dr. Kasolo and is confident that he will contribute greatly towards the achievement of ZCCM­IH’s vision to become Zambia’s leading investment company.

Dr. Kasolo takes over from Mr Mukela Muyunda who was ZCCM­IH’s CEO until 7 August 2014. The Board would like to take this opportunity to thank Mr Muyunda for his valuable contribution to the Company during his tenure of office and wishes him success in his future endeavours.

Issued on behalf of the Board

Cosmas Mwananshiku
NON­EXECUTIVE DIRECTOR
Lusaka, 01 October 2014

KCM remits over K700 million to Government in taxes

Despite the various problems afflicting Konkola Copper Mines in recent months in addition to a commercial standoff with Copperbelt Energy Corporation over US$44 million in energy services, the miner has upheld its tax obligations and remitted over K700 million in taxes to Zambia Revenue Authority two years ago.

Deputy mines minister Richard Musukwa told lawmakers in Lusaka, Sept. 30 that KCM remitted a total of K782,269,066.72 in taxes to the Zambia Revenue Authority (ZRA) and that the company was not selling copper to Vedanta Resources but was selling at the international market on the London Stock Exchange.

Responding to oral questions from who wanted to know the total number of workers employed by Vedanta Resources Plc, whether KCM sold copper to Vedanta Resources, how much copper was sold in 2012 and how much money was paid by KCM in form of taxes to the ZRA in 2012 Musukwa stated that the company had a total number of 7,553 workers as of August 29, 2014.

The lawmakers further sought clarifications as to whether the miner had been audited in view of reports that the company had been undeclaring its earnings in Zambia. Recently, its chairman Anil Agarwal was reported to have mocked Zambians over a US$500 million profit the mine earns in Zambia annually after investing a paltry US$25 million in 2004.

However, Musukwa stated that the Government was working to ensure it cleared suspicions that Kim was under declaring its taxes so that the Zambians get the best in terms of taxation.

Recently, KCM spokesperson Shapi Shachinda lamented that the company was among the highest paying in electricity tariffs in Zambia under the Bulk Power Supply Agreement with Copperbelt energy Corporation, the distributor of power to the mines, which is claiming US$44 million debt from the miner.

In a statement recently Shachinda stated that KCM was facing power restrictions following a commercial dispute between the two parties. KCM now pays more than K700 million (rebased currency) per year in power tariffs.

The dispute follows CEC’s unilateral increase in power tariffs since April 2014 contrary to the provisions of the Power Supply Agreement (PSA) between KCM and CEC. The CEC has also been refusing to generate invoices based on electricity tariffs agreed through the PSA to facilitate payments of bills by KCM for power supplied to the mine, Shachinda added.

It should be noted that prior to April 2014, CEC had increased power tariffs by over 100% in accordance with the PSA and this has resulted in KCM having the highest power tariffs in the mining industry in Zambia.

The restriction in power supply will adversely affect Konkola Copper Mines’ operations and compromise safety of the employees and job security. The operations of the Nchanga integrated business unit have already grossly been affected.

KCM regrets that CEC has chosen not to pursue this matter in accordance with the PSA provisions on dispute resolution.