By Timothy Kitundu
Dar es Salaam — Malawi Government has given an order to the Tanzania-Zambia Railway Authority (TAZARA) to move 48 million litres of petroleum products in the next 12 months, starting July 2016.

The order was communicated at a meeting between TAZARA and a delegation of 11 officials from the Malawi Government headed by Estelle Nuka, Board Member of the Malawi Energy Regulation Authority.

TAZARA Managing Director Eng. Bruno Ching’andu assured the Malawi delegation that with the new leadership TAZARA had the best management team to compete with any in the world and was fully geared to take the firm to another level.

“Our shareholders have recently appointed me and my deputy, and between us we have vast engineering and business experience. Together with the rest of our management, we have the best team that can compete with any in the world and are well prepared to handle the cargo you will be bringing to us,” Eng. Ching’andu said.

TAZARA is also in discussion with the Zambian Government and another private firm to begin transporting at least 14 million litres of fuel per month from the Port of Dar es Salaam to Zambia and the Democratic Republic of Congo within the month of July 2016.

Since joining TAZARA in April 2016, Eng. Ching’andu has instilled discipline in the railway operations, with the firm now registering consistent and shorter transit times in freight trains as well as passenger trains, an impediment that tended to drive clients away in the past.

The new Managing Director has also ordered his Management team to be customer-centric, giving maximum respect to the clients and being responsive to their needs.

In another development, Eng. Ching’andu has laid out his vision to the employees, calling on every worker to be customer-centric in order to turn the Authority into the best transport organization in the region.

Speaking last week to over 500 Dar es Salaam – based employees, Eng. Ching’andu said he wants to preside over a workforce that is proud to work for TAZARA, paid handsomely and competitively and operating in a safe environment, with plenty of opportunities to learn and grow.

“I dream of a TAZARA whose workers are proud and happy to be working for this company. I want us to be customer-centric, giving maximum respect to our clients and contributing to the growth of the economies of Tanzania and Zambia by paying taxes and dividends to the shareholders,” he said.

The Managing Director challenged the workers to show commitment by giving him maximum support, working as a unified team with one common goal in order to eliminate the divisive tendencies that pulled the Authority backwards.

At the different forums he addressed the workers, the Managing Director made the employees shout in unison after him “One TAZARA, One TAZARA, One TAZARA”, a thematic orientation he has demanded every employee to adopt in order to foster unity in the organization.

Eng. Bruno Ching’andu has further urged employees to discard the begging mentality and begin to perform because the Authority has everything it requires to raise output and revenue generation.

He said he left a well-paying job in South Africa to join TAZARA because he knew it was possible to turn-around the Authority and begin to earn sustainable revenue, enough to pay employees’ salaries, taxes and dividends to the shareholders.

“This company has everything it needs to make money. The Chinese came, built the infrastructure and handed it to us to manage, some of them losing their lives in the process.

They gave us fishing rods and taught us how to fish, but immediately they left we also went back to sleep, threw away the fishing rods and started to beg for fish,” the Managing Director lamented with disgust.

He said he would not be part of the begging culture and neither would he want to manage beggars, urging every employee to stop asking for handouts and instead focus on being productive in order to earn their salaries.

The Managing Director said that as a step towards revitalisation, it was important to acknowledge that the current performance of TAZARA was a huge disappointment to the founders of TAZARA, who worked tirelessly to ensure the realization of a railway that connected Zambia to the Eastern Coast of Africa.

“You may argue about the timing of the funding and the quantities in which it was granted, but it is undisputable that a lot of money has been poured into TAZARA over the years by the governments of China, Tanzania and Zambia and everyone expects us to show appreciation by performing,” he said.

Source: allAfrica

By Maimbolwa Mulikelela
THE World Bank has completed the Mineral Investment and Governance Review (MInGov) on Zambia aimed at easing investor decisions before they could invest.

The diagnostic tool measures each country’s governance and stability in the mining sector which has a direct impact on investment in resources rich countries.

World Bank country manager for Zambia Ian Ruthenberg said his organisation had just completed MInGov review on Zambia stating that the country remains attractive to investors.

Ms Ruthenberg said it collects and shares information on the mining sector governance, its attractiveness to investors, and how it contributes to national development.

The key findings of the review show that Zambia is an attractive place for investment due to favourable geology, its long history of mining, its political stability, low risks of expropriation, high levels of security and a relatively favourable economic environment.

Ms Ruthenberg said this at the just ended 6th Zambia Mining and Energy Conference (ZIMEC) in Lusaka.

“However, there are areas of potential improvement. Also, despite the different views of different stakeholder groups, the review highlights areas where there is consensus,” she said.

Ms Ruthenberg said this was helpful to identify the low hanging fruit and areas to build trust.

“It is important for players in the mining and energy sector working together with all transparency because if the sector continues to operate in a fragmented manner, a downward spiral in Zambia mining sector will continue,” she said.

Most of the investment decisions were largely influenced by the manner in which countries governance was structured.

Source: allAfrica

ESTHER MSETEKA, Lusaka
A LATEST World Bank report says Zambia’s medium-term prospects for economic growth are brighter and projected to improve to 4.2 percent next year and five percent in 2018.

According to the Seventh World Bank Zambia economic brief entitled: ‘Beating the slowdown, making every Kwacha count’ released yesterday, the report shows that despite the country facing a slowdown, investment in mineral and non-mineral sectors in the country remains attractive.

The report reads that gross domestic product (GDP) growth is forecast to remain close to 3.0 percent this year, assuming new power generation capacity comes on line and a better harvest is achieved. READ MORE

Source: Zambia Daily Mail

Zambia has long been regarded as the safest place in sub-Saharan Africa in which to invest and operate. It seems set to remain so in the years ahead, despite the headwinds that currently beset mining in general, as well as problems specific to the country itself. Rod James reports.

Zambia copper

Mining is a major contributor to Zambia’s economy. Copper is responsible for around 80% of the foreign earnings, and despite the metal’s low prices, BMI Research forecast a real GDP growth of 6.0% in Zambia over 2015. BMI’s report, published in July, concludes that private and government consumption are likely to remain key drivers of that growth, and a resilient domestic demand, coupled with a stable inflationary environment, will help offset any export weakness.

Challenges to come

However, the report also makes clear that Zambia will face some challenges along the way. The country’s “current account” will end 2015 significantly further in the red, having almost doubled to $711m, as the deficit as a proportion of GDP grows to 3.3%, up from 1.5% the previous year. Though this will drop to 2.4% in 2016, it will not be in the black for another two years. The sharp decrease in global prices for copper, which has seen it trading close to its support level, has been a significant factor in this, and so too has falling production. But of late, the Zambian mining sector has had two quite different concerns altogether – politics and power.

Mineral policy

The country’s president, Edward Lungu, won a narrow victory in January 2015, having stood on a populist manifesto which supported earlier moves to scrap corporate income taxes but force royalties of 8% on underground mines and 20% on open-cast operations. The threatened hike in royalties brought widespread warnings of closures and huge job losses before the standoff was eventually broken by the reinstatement of income tax and a major reduction in royalty rates – though both at slightly higher rates than before.

Some have speculated that the next presidential election, due in 2016, might see taxation and mineral policy again feature strongly in the campaign as it has elsewhere across the continent, with governments attempting to get a greater share in their natural resources. However, Zambia perhaps more than most is unlikely to want to bite the hand that feeds it. Mining accounts for 12% of GDP and 10% of employment, and according to industry figures, from 1997 to 2013 it drew $12.6bn of foreign investment, helping to turn the country into one of Africa’s top performing economies.

Common sense prevails

“Zambia is keen to encourage more mining, and with the sector key to the economy the government can ill afford to discourage mining,” says John Meyer, analyst and partner at SP Angel.

Meyer says that the royalty rate hike was specifically aimed at stopping Vedanta, and possibly Glencore, from taking advantage of transfer pricing, but the unintended consequence was for an unsustainable rise in taxes for all miners, even though the government claimed some miners might be better off. With the issue now resolved, he says that they do not expect to see any further radical changes over the next few years. “Zambia is a sensible economy,” he says.

It is a sentiment broadly echoed by Jeremy Wrathall, head of Global Natural Resources London, and mining team leader at Investec Bank.

“The Zambian Government have always shown themselves to be pragmatic – that’s always been their way – and certainly since privatisation in 2001 they have tried to impose ridiculous taxes. They haven’t worked, and they’ve responded to the industry.” Wrathall does not think that there is anything to suggest that they will stop listening in future.

Underpowered

Unfortunately, no amount of political pragmatism is a match for the vagaries of nature, and with water levels at the country’s hydro electric plants perilously low after drought, the country’s miners have been forced to confront the prospect of restrictions of supply. It has already seen the power allocations to First Quantum Minerals’ Kansanshi and Sentinel operations cut by almost a quarter, leaving both operating at reduced capacities and facing significant potential cuts to production.

The immediacy of the situation should, of course, be remedied once the rains come, but it highlights a more persistent legacy of decades of underinvestment by the state-run Zambia Electricity Supply Corporation that has left capacity insufficient, transmission losses high and reliability low.

Now, however, there are major moves afoot to combat the shortages and improve and extend the network infrastructure, with a number of new power stations being developed and a range of projects planned, including a 2,300km interconnector to bring energy from Kenya to Zambia. While there is clearly still some way to go – transmission and distribution losses currently amount to over 16% and are not predicted to fall below 13% until 2024 – BMI take the view that “the outlook for Zambia’s power sector is generally positive” which, by extension, is good for mining too.

Future prospects

There will, nevertheless, be some changes for the industry. Wrathall feels that the copper prices we are seeing now will be here to stay for at least the next three years, and that this will put pressure on grade, rendering some of the particularly low-grade ore bodies effectively uneconomic.

“The copper market is probably over-supplied for the next couple of years, but not massively.”
He thinks that with many of the existing operators curtailing exploration, and the financial climate unfavourable for another Sentinel or Konkola deep to be developed, the focus will be on smaller deposits. This will, he suggests, be the pattern the world over, and it will have major implications for copper mining in general and for Zambia in particular, since he believes that it will be the making of the next cycle.

“The copper market is probably over-supplied for the next couple of years, but not massively, and nothing like the same as iron ore or coking coal or aluminium or nickel. Copper’s fundamentals are pretty attractive still and if you get companies pulling in their horns, not pre-stripping, and cutting cap-ex, and not building these mega-projects, then the copper market will become under-supplied quite quickly2019/20. So it starts to look very attractive and the market will start to think about that in 2016/17,” Wrathall predicts.

Investment potential

So what does that mean for future investment? Jackson Sikamo, country manager at Chibuluma Mines, is upbeat on that question.

“Foreign direct investments will continue to play a major role in the mining industry,” Sikamo says. Looking beyond today’s commodity price and power supply problems, he believes that the medium to long-term prospects are bright.

Wrathall agrees. He says that when people start looking to invest in new copper mines, they will look to Zambia.

“In my view, it still remains one of the most attractive places to do business, because the government is sensible; they’re accommodating. It’s a very, very safe country to work in. It’s still geologically prospective. So yes, I think it’s still a great destination, probably one of the best destinations in Africa, if not the best for base metals.”

Source: mining-technology.com