Extract from 2016 annual report
Konkola Copper Mines (KCM) reported total revenue of K9,607 million (US$972.5 million) for the financial year ended 31 March 2016 (2015: K7,006 million (US$1,077.1 million)). The reduction in revenue was attributed to lower metal prices. The net loss for the year was at K3,685.7 million (US$373.1 million) (2015: K1,243.6 million (US$191.3 million) loss).
Total finished copper production during the year was up 7.7% at 182 thousand tonnes for the year ending March 2016 (2015: 169 thousand).
During the year under review, KCM focused on increasing production volumes and addressing some productivity challenges that the company faced in the past. The increased production was firstly driven by a 22.5% increase at the Konkola Deep underground mine due to improved ore grade and concentrator recoveries, and the completion of the rehabilitation work on 1-Shaft. Secondly, the Tailings Leach Plant (TLP) production improved by 5.8% due to higher plant reliability and higher throughput. Lastly, finished copper production from third parties rose by 3.1% due to higher availability of third party feed.
However, there was a 25% decline at the Nchanga plant because the plant was placed under care and maintenance in the quarter ending 31 December 2015, due to low copper prices.
Moving forward, KCM’s strategy is to strive for higher operating productivity levels at the Konkola underground mine, more reliable TLP facility with potential to increase recoveries, increased usage of the smelter by processing third-party concentrates from Zambia and DRC, and improved cost cutting measures.
Subsequent to year end, ZCCM-IH fled a Claim Form with the English High Court on 6th June 2016 to recover outstanding sums in excess of US$100 million due to it from KCM, pursuant to the terms of the Settlement Agreement entered into in 2013. On 16 December 2016, ZCCM-IH was successful in its application for default judgment. KCM was ordered to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days. The total amount to be paid by KCM amounted to approximately US$103 million. KCM was also ordered to reimburse ZCCM-IH 80% of the costs it had incurred in pursuing its claim.
Further directions were given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM.
There were no dividends declared during the year under review (2015: nil).