KCM still owes ZCCM-IH over US$59m – report

KONKOLA Copper Mines still owes ZCCM-IH over US$59 million under a Settlement Agreement that was signed in February 2013, according to the latest Auditor General’s report. The Auditor General’s Report on Accounts of Parastatal Bodies and other Statutory Institutions for the 2013 financial year stated that the mining company did not honour a Settlement Agreement signed between the two entities and has an outstanding balance due to ZCCM-IH amounting to US$59,684,655. According to the report, a Settlement Agreement had been signed on February 11, 2013, as a full and final settlement of all claims due under or pursuant to the Price Participation Agreement, which KCM had failed to honour previously.

“KCM Plc agreed to pay ZCCM-IH amounts totalling US $119,744,655 over a period of four years in line with the payment schedule as follows: US$46,324,655 to be paid on or before August 31, 2013; US$73,420,000 to be paid on or before September 30, 2016 in accordance with the payment schedule,” read part of the report. “However, as of September 2014, KCM Plc had not honoured the Settlement Agreement and had only paid a total amount of US$16,500,000 out of US$76,184,655, which was due as of September 30, 2014, leaving a balance of US $59,684,655.” The report stated that although KCM failed to honour the Settlement Agreement, ZCCM-IH, on the other hand, also failed to trigger an enforcement clause stipulated in the Agreement. “The agreement stipulated that in case KCM failed to pay a deferred amount at the next instalment date, ZCCM-IH was permitted to take legal action for monies owed through the English courts or by arbitration in respect of the deferred amount and any interest that would have accrued pursuant to clause 5. Contrary to clause 5 of the Agreement, as of November 2014, there was no evidence to show that ZCCM-IH had taken any legal action for monies owed,” it stated.

The report also revealed that ZCCM-IH has had “poor performing loans” with Ndola Lime Company Ltd, with the latter having failed to pay the former over US$7 million in an instalment due last June. “On 29 July, 2011, ZCCM-IH signed a loan agreement with Ndola Lime Limited an amount of US $26,000,000. A review of the agreement repayment schedule and accounting records revealed that Ndola Lime Limited should have repaid a total of US$7,356,990 as at June 30, 2014. However, Ndola Lime Limited had not made any payments to ZCCM-IH as of August 2014 and ZCCM-IH had not enforced the default clause of the contract,” stated the report.

2016-05-30T15:53:07+00:00 February 17th, 2015|ZCCM-IH|Comments Off on KCM still owes ZCCM-IH over US$59m – report