CEC acquires 60% shares in Nigerian energy company

A JOINT venture company where Copperbelt Energy Corporation ( CEC) has 50 per cent shareholding has acquired 60 per cent interest in the Abuja Electricity Distribution Company that supplies power to over 10 million people in Nigeria.

KANN Utility Limited is a joint venture company between CEC Plc and XerXes Global Limited and was confirmed as the preferred bidder to acquire Abuja Electricity Distribution Company ( AEDC) in November 2012 following rigorous international bidding process.

According to information released by CEC Plc yesterday and also posted on the Lusaka Stock Exchange ( LuSE) website, the consideration payable for the 60 per cent interest in Abuja Electricity Development Company ( AEDC) is US$ 164 million, out of which 25 per cent ( US$ 41 million) is payable within 15 days of signing the agreement, with the balance of 75 per cent ( US$ 123 million) payable after six months.

The financing plan for the acquisition has been developed with Standard Bank of South Africa. The transaction is expected to be finalised and shares transferred when the final payment is made ( anticipated August 2013).

During the interim period, preparations will be made to take over the management of AEDC and CEC Plc would be the operator of AEDC, which has a franchise for distributing electricity in four states, comprising the Federal Capital Territory of Abuja, Niger State, Kogi State and Nasarawa State, which has a combined population of 10.5 million people in 2.3 million households.

AEDC purchases power from the Nigeria Bulk Electricity Trading Plc and is connected to various power generation plants by the Transmission Company of Nigeria.

Nigeria has one of the worst electricity distribution records in the world with almost each household and business entity having a back- up generator.

Source: Mining News Zambia

NFCA Chambishi mine sets aside US$100 million for SEOB-report

China’s Non Ferrous Africa Mining Corporation (NFCA) plans to spend US$100 million this year towards the development of the South East Ore Body Mine (SEOB) at its Chambishi unit in Zambia as it seeks to expedite the project.

It is estimated that when the project is complete more than 5,000 jobs would be created; the Times of Zambia reported citing NFCA chief of executive Wang Chuilai. The mining company is committed to developing the SEOB because the future of the company largely depended on the project, according Wang.

During a recent visit to the mine by Copperbelt Minister Mwenya Musenga said NFCA’s planned investment in the development of the SEOB was US$830 million and that by last year, the company had injected in a total of $123 million.

“The future of NFCA depends on the SEOB and this is why we are determined to have the project successfully completed, we are so far on course in the implementation of the project and its completion date is 2017,”

When completed, the SEOB would increase the life span of the mine by 25 years. NFCA has made significant social and economic contributions and that the company had a workforce of more than 3,000 workers. Apart from creating employment, NFCA is contributing to the economy of the country through the various forms of taxes we are paying to Government.

From inception up to the end of 2013, the company had paid to the Government a cumulative US$150 million in taxes, which included mineral royalty tax, company income tax, Payer as You Earn (PAYE), Value Added Tax (VAT).

Wang further said the company had paid dividends to the Zambia Consolidated Copper Mines-Investment Holding (ZCCM-IH). During the tour Musenge was happy with the Chinese investment in the country noting that NFCA had significantly contributed to the growth of the economy.

“We are actually grateful for the contribution you are making to this country and it is our desire that we continue building on our bilateral relations,” Musenge said and commended NFCA for its outstanding safety record. He urged the company to continue investing in the safety of its workers. The Zambia Environmental Management Agency recently halted the implementation of the SEOB on grounds that NFCA had failed to comply with regulations on compensation and relocation of surrounding communities. This action by the agency ultimately led to over 500 miners who were working on the project being laid off.

Last month the Government lifted the suspension on the construction of Non-Ferrous Mining Corporation Africa’s Chambishi South East Ore Body Project, the delay which according to the mine management had cost the company about US $10 million during the 48-day closure of the project.

Following the closure of the project for alleged failure to meet certain environmental conditions, the Government said it had decided to waive the decision according to Labour and social security minister Fackson Shamenda after a closed door meeting with NFCA management and unions.

“The suspension of the construction of Chambishi South East Ore Body has been lifted. Various concerns from some stakeholders surrounding the project will be resolved well and we hope to close this whole matter by the end of the month,”

According to Shamenda, any issues that were being raised by other stakeholders should not affect the operations of the mining company adding that where there are different companies or people, there will always be complaints but the differences must be resolved in an amicable manner.

Source: Mining News Zambia

Mopani Copper Mines copper output rises 12 percent, says report

Glencore Xstrata increased its copper outturn by more than 12 percent at its Mopani Copper Mines in Zambia last year compared to a year earlier, as expansion bolstered by investment in the local unit rose; company says.

Annual Copper output rose 12 percent to 111,000 tons last year compared to 99,000 tons recorded a year earlier, spurred by an expansion drive embarked upon by the copper producer-bolstered by the more than US$2 billion injected into the local operations at Mufulira and Nkana mines on the Copperbelt.

Glencore Xstrata has raised over US$2 billion towards recapitalizing its operations in Zambia, Africa’s rich copper producer of which over US$320 million has been injected into the sinking of the deep mine project, the synclinorium, to boost the company’s copper outturn as one of the country’s leading producer of the red metal as well as cobalt.

The sinking of the shaft expected to be operational by 2015, will elongate the lifespan of the Nkana mine in Kitwe-an old mining town; by 25-30 years with access to 115 million tons of the copper ore and this will further create over 3,000 additional jobs for the local people according to its chief executive officer Danny Callow.

Additionally, MCM, in its quest to remain competitive as one of Zambia’s leading producer of copper and cobalt has invested in the expansion and upgrading its cobalt plant at a value of $27million to ostensibly double the current production capacity to 7,000 tons from an estimated 2,800 tons by next year.

Mopani Copper Mine forecasts to invest over US$300 million in completing the final phase of the smelter at its more than 80-year-old Mufulira mine and assist capture over 98 percent of the sulphur dioxide (senta) emissions that has remained a menace to the local people since the inception of the mines.

The captured gases is anticipated to be rechanneled into the acid plant to make the substance that will assist in copper production and cut down the cost incurred in procuring the product for mining operations including ore leaching in Mufulira west.

According to Mopani, the company has spent over US$2.4 billion to date in upgrading the Mufulira smelter and various operations at its units including various corporate social responsibilities which have seen communities become self-reliant, both in health and general welfare of the people where the company operates and surrounding areas stated chairman, Emmanuel Mutati.

Source: Mining News Zambia

Maamba Collieries coal output increases two fold in 2013

Coal production at Zambia’s sole producer, Maamba Collieries Limited in Southern Province, more than doubled last year as the company ramps output up to meet demand from various end-users, the company says.

In 2012 production of the heating substance at Maamba Collieries in Sinazongwe, about 350 kilometres south of Lusaka, was 90,000 tones per annum which last year rose to 400,000, company spokesperson Janardhan Lavu said citing fairly stable policy environment and conditions in the country as reasons spurring the increase in outturn.

“In 2013, coal production levels at Maamba Collieries reached over 400,000 tonnes compared to only 90,000 tonnes in 2012,” said Lavu adding that the performance by the collier in 2013 had been fair since the mine was reopened in May, 2010.

The company, majority owned by Nava Bharat of Singapore and bought for US$26 million over three years ago, has continued registering an upward trend in coal production, although the break-even point had not been reached yet.

“The good performance in both production and sales can be safely attributed to a fairly stable and growing economic position Zambia occupies,” said Lavu.

This good performance has seen the company record orders from within and outside the Southern Africa Development Community or SADC.

Maamba Collieries says Lavu, has the ability to produce adequate coal requirements for the country and that the lower production scales recorded earlier, were mainly due to the small coal market in the country but the policy framework by the Government has helped the company grow since it was taken up.

“The policy environment has remained stable and conducive for investment and we have continued to receive tremendous support from all stakeholders,”

MCL is a joint venture between the Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) and Nava Bharat of Singapore. Nava Bharat holds 65 per cent shares while ZCCM-IH owns the remaining 35 per cent.

The coal miner was bought off for a net value of US$26 million with the Zambia Consolidated Copper Mines Investment Holdings having 35 percent share in the collier.

Maamba Collieries Limited (MCL) was incorporated in 1971 under the ownership of the Government through the Zambia Industrial and Mining Corporation (ZIMCO).

Maamba Collieries has operated under the current mining title since 1970. The mining title encompasses approximately 7,900 hectares located on the Siankondobo coalfield in the Gwembe Valley, in the Southern Province of Zambia, the company said on its website.

The company is the largest producer of coal in Zambia with estimated coal reserves of 103 million tonnes of high grade coal and 70 million tonnes of low grade coal. MCL is operating an open cast coal mine with a production history of almost 40 years.

Source: Mining News Zambia

Evoked Tax Incentives –No Harm on Zambia’s investment potential, says report

Recent adjustments made by the Zambian Government on mining incentives given to multinational companies operating in the Southern African and Africa’s top copper producer will not harm the country’s desired investment growth in the sector, a report says.

Recently, the Government reviewed various incentives accorded to mining companies in their pursuit to increase their copper outturn as the country strives to raise output of the red metal from the prevailing 960,000 tones per annum to the projected 1.5 million tones per annum by 2016-spurred by the oncoming projects.

The report is titled: ‘Mining in Africa Country Investment Guide and was released during the ongoing 20th Mining Indaba in Cape Town, South Africa held under the theme-‘Investing in African Mining’.

It notes that revoked tax incentives, increase in mining royalties and more stringent laws regarding financial reporting have not been sufficient to substantially affect investment in the Zambian mining sector.

Zambia is among seven other countries in Southern Africa, Zambia inclusive as earned a position among the top 20 most exciting African countries. These include Mozambique, South Africa, Malawi, Zimbabwe, Namibia, Botswana and Madagascar.

The guide examines five regions on the continent – Central Africa, East Africa, North Africa, Southern Africa and West Africa – encompassing a total of 53 countries.

The eight Southern African mining states have been categorized into two groupings noting those offering a low-risk environment with proven geological potential and others offering greater risk, yet less exploited mineral resources.

South Africa, Botswana, Namibia and Zambia are in one category while Zimbabwe is embraced in the latter grouping. Mozambique and Malawi are in another.

The guide has on South Africa noted that despite the country having had labour disputes and falling production in recent years, it continues to dominate African mineral production-a potential that upholds its reputation.

The guide notes that the increased mechanisation of the local mining sector could be beneficial to the country once implemented.

It further notes that South Africa still has geological potential, and increased mechanisation of its mines-all which are labour intensive compared to other mining jurisdictions which if maximized could create a revival of the industry.”

The guide noted on Botswana’s diamonds strength as being predominant over other mineral potential the country is endowed with and that although Botswana has recorded the second-largest amount of coal in Africa it remains to develop its infrastructure to maximize the resource.

Namibia remains one of the few African states which have formulated an official strategy for engaging with emerging economies, commending the country for its efforts, what with the influx of direct foreign investment.

Zimbabwe has been cited the most risky jurisdiction for investors of any type, although it has not been completely written off, given its holding of the August 31, 2012 Presidential and general elections last August coupled with its undisputed and vast mineral potential the country is endowed with. According to the country’s mineral reserves, Zimbabwe has approximately 30 percent of the world’s diamond reserves with additional and substantial deposits of gold, platinum, coal, among other metals lying unexploited in various parts of the country.

Mozambique and Malawi have been cited as being ‘slightly higher risk investment destination points largely because of their relatively under-developed mining sectors. It however notes Mozambique’s potential in coal industry while Malawi’s emerging uranium metal and other strategic minerals as being key to foster growth of the African state, noting that the two countries have potential to grow substantially if the sectors are nurtured.

Zambia to revise Mineral laws to foster increased investment

Zambia plans to review the mining policy before the end of this year to trigger increased economic growth that will culminate into the country attaining a middle income status by the year 2030, says mines energy and water development minister, Christopher Yaluma.

Yaluma says plans are underway to revise the Mines and Minerals Act number 7 of 2008 to facilitate increased growth in the mining industry and trigger growth in other sectors including transport and energy that remain stifled.

Speaking during the ministerial forum at the 20th Mining Indaba in Cape Town, South Africa, Wednesday, Yaluma said the principal legislation governing the mining industry has been the mines and minerals development act no.7 of 2008 based on government’s commitment to apply modern principles of transparency and accountability in the management of mineral resources.

The Act. broadly deals with licensing and regulation of mining activities and is currently being reviewed to ensure a balance that will create a competitive environment thriving on a sustainable mining industry to benefit Zambians while concurrently rewarding investors.

The revision of the Act will seek to address various challenges being faced in the sector including redressing unnecessary bureaucracy in the issuance of mining rights as well as reviewing the inadequate size and duration of prospecting licences.

It will also seek to redress the appeal procedures and also seek to retain a tenement in situations where progression to mine development becomes impossible because of adverse economic conditions or technological constraints.

Yaluma noted that although mining has been the engine of Zambia’s economic growth development active since the 1930s, the Government has been pursuing policies and implementing measures to grow the industry and enhance its contributions to economic development.

This growth in the mining sector is not possible without a proper policy and regulatory framework which government has put in place.

Zambia has an articulate policy on mining which was adopted recently and aims at ensuring an ideal environment to encourage private investment in the exploration and exploitation of minerals.

Through the .policy, government aims to ensure the development of a profitable mining industry contributing to the sustainable development of the country.

In that set up, the role of government remains that of ensuring an enabling environment for the development of a vibrant and orderly mining industry contributing to the economic development of the country.

Over the years, the country has recorded increased exploration and mining activities which demonstrates the country’s untapped mineral potential and favoutable investment climate.

Giving an outlook of the investment climate for mining in Zambia in Zambia, Yaluma said in the past few years a number of expansion projects at existing mines have taken place necessitating the establishment of new mines resulting in the increased mineral production.

Copper production by large scale mines in the past three years rose by eight percent from 677,604 tonnes in 2011 to 759,784 tonnes in 2013 and it is projected to increase to one million when the Sentinel project at Kansanshi mine, a unit of First Quantum Minerals Limited comes on stream in 2015.

While planning to improve the policy and legal framework the government further seeks to implement programmes in other sectors to support the growth of the mining industry.

“It is a known fact that the mining industry cannot grow to an extent of making significant contribution to economic development if the necessary infrastructure is not in place. inadequate infrastructure (energy and transport) is one of the factors affecting the development of the mining industry.” Said Yaluma

In redressing the challenges of inadequate power supply in the country, the Government is undertaking various projects to increase power generation capacity by 1,500 megawatts by next year which include upgrading and constructing various power projects.

These include upgrading and extending the Kariba North Bank power capacity to 360 megawatts, construction of the 750 megawatt Kafue Gorge Lower hydro power plant which is critical for the provision of adequate energy in Zambia and the Southern African Power Pool (SAPP).

The Government wants to finalise the construction of the 120 megawatt Ithezi Thezi hydro power project and finalizing of the 300-900 megawatt thermal power plant being pursued by Maamba Collieries Limited.

It is the Government’s desire to create a vibrant mining industry that will make significant contributions and assist the country turn into a prosperous middle income state by 2030.

This is envisioned to be done through the creation of a well organized public private partnership driven mining sector that will also contribute about 20 percent of Gross Domestic Product (GDP) and also provide a platform for sustainable economic growth for the country.

To achieve these goals, the Government seeks to establish new large scale mining operations, given the vast mineral wealth the country is endowed with through intensified explorations for the development of large scale mining operations and create employment and business opportunities while contributing to wealth creation.

This will largely be achieved through tapping into the vast amounts of metallic and industrial minerals that include gemstones and other energy resources including coal, oil, gas and uranium.

It is Government’s desire to further promote value addition to the mining industry to enhance benefits from mineral resources, given the considerable investment in the area.

It is estimated that only one percent of the copper produced from the mining industry is utilized in the manufacturing sector with the rest being exported in unprocessed form.

In the gemstone sector, the value chain of mining lapidary jewellery offers an opportunity for investment and that currently only few small lapidaries exist cut and polished gemstones would significantly contribute to export earnings and employment generation.

Furthermore, there are abundant occurrences of industrial minerals and dimension stones that provide a basis for setting up of value addition industries, Yaluma added.

He revealed that 40 –percent of the country is geologically mapped at a scale of 1;100,000, implying that there are unknown potential.and that investing in the area can lead to opportunities for exploration for various minerals which will eventually result in development of new mines.

The exploration for oil and gas is also Government’s desire to encourage investment particularly the petroleum potential which has remained untapped in Zambia.

The Government, basing on the results of the preliminary work conducted, has demarcated the country into blocks. Some of the petroleum blocks, which were reserved for government. were allocated with nine licences and were given to successful bidders.

On value addition, the Government is encouraging the setting up of smelting facilities to process manganese into ferromanganese.

Yaluma reiterated the Government’s desire to encourage more investment into the country, given Zambia’s stable investment destination coupled with good mining sector regulations that offers vast investment opportunities ranging from exploration to value addition. to a serious investors in mining.

“Zambia is generally a low-risk investment destination and has attracted significant foreign investment in the recent past.” Yaluma said.

“You are all welcome to investment in the mining sector in Zambia and partner with government to translate the mineral resources into wealth for all.”

He commended organizers of the mining indaba for their efforts noting that the event had come at an opportune time considering the level of mining activities taking place in various parts of the continent.