March 2017

Annual Report Summaries

Kariba Minerals Ltd Extract from 2017 Annual Report

For the financial year ended 30th June 2016, Kariba Minerals Limited (Kariba) reported total revenues of K21.34 million (2015: K11.58 million – restated) with a profit after tax of K 1.14million (2015: K12.73 million loss – restated).

For the financial year ended 30th June 2016, Kariba Minerals produced a total of 964,548 Kg (2015: 983,707 Kg) of rough amethyst. During the same financial year, Kariba sold 16.7 million carats of high-grade rough amethyst through two auctions in Singapore in September 2015 and in Lusaka in April 2016 for a total of K6.51 million (US$0.66 million) in revenue from the auctions. Kariba’s ore production was at 15,927 tonnes in the year ending 30th June 2016 (2015: 30,432 tonnes).

Kariba constructed a new sort house to meet the market demand from new customer orders for specific high quality, small sizes of amethyst under natural light conditions. Additional storage silos were constructed to increase the stock holding capacity to 800 tonnes.

There were no dividends declared during the financial year ended 30th June 2016 (2015: Nil).
Annual Report Summaries

Maamba Colliers LTD Extract from 2017 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of K100.38 million (US$10.18 million) for the year ended 31st March 2017 (2016: K121.9 million (US$12.34 million) and had profit after tax of K21.2 million (US$2.15 million) (2016: K52.85 million (US$5.35 million). The company’s assets exceeded its liabilities by K1,023.8 million (US$107.91 million) as at 31st March 2017 (2016: K1.180.61 million) (US$105.6 million)). Additionally, the company has accumulated losses amounting to K842.72 million (US$87.69 million) (2016: K999.49 million (US$89.4 million).

During the year under review, MCL commissioned the first 150 MW Thermal Power Plant in August 2016 and the second 150MW was commissioned in November 2016 and the Commercial Operations Date was set for 31st December 2016.Maamba Collieries Limited is currently supplying 270MW to ZESCO. The revenue and financial position of the company is expected to improve in the future after the commissioning of the Thermal
Power Plant.

There were no dividends declared during the year under review (2016: Nil).
Annual Report Summaries

Kansanshi Mining Plc Extract from 2017 Annual Report

Kansanshi Mining Plc (KMP) had sales revenue of K14.51 billion (US$1.47 billion) (2015: K9.69 billion (US$1.49
billion) for the financial year ended 31st December 2016. Although total copper production was up 20% at 272,843 tonnes (2015: 226,674 tonnes), realised prices were lower than the previous year resulting in a decline in revenue. Gold production was 9% higher at 148,220 ounces (2015: 136,257 ounces) due to higher concentrate production.

Over the next five to six years the Company plans on gradually shifting towards sulphide mining as oxide materials coming out of the mine are reducing. As a result there was need to double the Sulphide ore throughput to sustain current Copper Production levels. If the latter is not done the levels of production would gradually drop from 250,000 tonnes in 2017 to 245,000 tonnes in 2018, then to 240,000 tonnes in 2019, 202,000 in 2020, 174,000 in 2021 and would continue to decline to levels of 50% of current production post 2021.

In this connection, a US$1.5 billion investment in the Company has been envisaged to sustain the said production and significantly improve other facets of mine operations. Additional smelter capacity would in turn be required as the current Smelter capacity would not be able to cater for increased Sulphide concentrate production. High level electricity would have to be supplied to the mine so as to also capacitate the two Smelters. The Company already has grave concerns over the security of power supply from ZESCO. Since the reduction of power supply from 200 megawatts to 165 megawatts, parts of the business had to be shut down such as the High Pressure Leach system which was still not operating.

The profit for the year 2016 was K1, 248.3 million (US$126.5 million) (2015: loss of K9.11million (US$1.4 million) and had been added to the retained earnings to contribute towards raising the US$1.5 billion required for capital projects.

No dividends were paid during the year ended 31 December 2016 (2015: K52.04 million (US$ 8 million).
Annual Report Summaries

CEC Africa Extract from 2017 Annual Report

The Company incurred a net loss for the year ended 31 December 2016 of K2, 656.58 million (US$269.21 million)(2015: K6.15 million (US$0.945 million)) and, at that date the Company’s total liabilities exceeded total assets byK1, 630.08 million (US$158.85 million (2015: total assets exceeded total liabilities by K805.73 million (US$106.36million)) and the current liabilities exceeded its current assets by K1, 808.36 million (US$176.22 million) (2015:K284.41 million (US$37.54 million)).

The Company’s net loss was mainly due to the recognition of impairments on the trade and other receivables& inter company loans with its subsidiary, KANN, of K2,548.53 million (US$258.26 million) and an impairment of its investment in associate, North South Power Limited of K140.61 million (US$14.25 million). The devaluation of the Naira against the US Dollar has also resulted in significant exchange losses recognised in the financial statements of KANN. Also CEC Africa has guaranteed the loan between KANN and the UBA. A notice of default has been issued by UBA which has resulted in the recognition of a liability in the Company’s financial statements.

CEC Africa is refocusing efforts on consolidating and stabilizing the Nigerian operating assets in the immediate to medium term, and position for growth in the longer term. These efforts include:

  • Immediate sale of CECA’s stake in Sierra Leone to a reputable institutional investor/developer.
  • Divestment of some early stage developments given the bank ability challenges and limited resources available.

No dividends were declared and paid by the Company during the year (2015: Nil).
Annual Report Summaries

CNMC Luanshya Copper Mines Extract from 2017 Annual Report

CNMC Luanshya Copper Mines plc (CNMC) recorded a turnover of K1, 700.75 million (US$172.35 million)
(unaudited) for the year ended 31st December 2016 (2015: K1, 311.94 million (US$201.7 million). The loss after tax was K306.40 million (US$31.05 million) (2015: K831.07 million (US$127.77 million) loss).

There were no dividends declared during the year under review (2016: Nil).

Corporate Social Investment, ZCCM-IH News

ZCCM-IH Donates to Zambia Prisons

ZCCM Investments Holdings Plc donates assorted items for the nursery school being set-up by Mother of Millions Foundation at Kamfinsa Female Prisons in Kitwe.

Kamfinsa Female prisons on the Copperbelt has incarcerated mothers who are living with some of their young children within the facility.  According to the Mother of Millions  Foundation’s Faith Kalungia, the prison currently has seven (7) children between the ages of two (2) years to three (3) years, and three (3) new born babies. The number of children vary between 10 to 30 at a given time. These children face harsh conditions with no amenities provided to meet even their most basic needs.

ZCCM-IH women donated an assortment of items which will included: Small plastic tables, chairs, toys, small blankets, matts, a refrigerator and a TV set; for the Kamfinsa female prisons particularly for the children within the prison where their mothers are serving a sentence.

“We are not just women, we are also mothers. As mothers our hearts are gripped with sadness to see children in here suffering because of the mistakes of their mothers. We are here to offer support to these women and their children, and show them that the community outside has not forgotten about them…” Claudette M. Malambo, ZCCM-IH.

Mother of Millions, an NGO which is involved in helping and providing an early childhood education and recreation facilities within prisons received the donation in the presence of Zambia Prison’s personnel.

“On behalf of our Faith (Mother of Millions Founder), I would like to thank the entire ZCCM-IH team for this very generous donation to the Mother of Millions Foundation . The donation you have made is going to feed, clothe, and educate the children at Kamfinsa Female Prisons.” Mrs. Taonga Shamboko, Mother of Millions Foundation Head – Lusaka.

The donation was made during the commemoration of International Women’s Days on 8th March 2017 at Lusaka’s Chimbokaila Prisons, where the Mother of Millions has already set-up a nursery school and playground for the children with incarcerated mothers at this facility.

Industry News

ZESCO applies to raise tariffs by 75%

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The Energy Regulation Board (ERB) has confirmed that state power utility ZESCO has applied to increase its electricity tariffs by an average of 75 percent.

The proposed agreement is with effect from May 1st 2017.

In its application, ZESCO wants to increase tariffs in two phases starting with 50 percent on 1st May and a further 25 percent in September 2017.

This was confirmed by ERB Director of Consumer and Public Affairs Agnes Phiri.

“Following the ZESCO application, the ERB will now proceed to consider the application tariff increase in line with the provisions of the Law that governs electricity tariff determination, particularly as specified in the Electricity Act, Chapter 435 of the Laws of Zambia, as amended by Act No. 21 of 2003 (the Electricity Act),” Mrs Phiri said.

She said the ERB shall, therefore, be receiving written submissions from the public in view of the ZESCO application within the next 30 days as stipulated by Law.

“Further, the ERB shall convene a public hearing to consider submissions from members of the public, if at all any would have been received within the 30-day period,” she said.

“With regard to the mining tariffs, the ERB shall as it has always done, approve Power Purchase Agreements (PPAs) that have been agreed by ZESCO and its mining customers. The PPAs specify at what tariff individual mining customers buy electricity from ZESCO.”

Mrs Phiri stated that in August 2015, ZESCO had applied for tariff increase averaging 187 percent for all customer categories except the mines, which was granted by the ERB effective December 2015.

“However, following consultations with key stakeholders, in January 2016 ZESCO suspended the implementation of the tariff awarded by ERB. The withdrawal of the ‘new’ tariffs was based on the need to allow for a smooth transition from the old tariffs to new ones,” she said.

She added that ZESCO notified the public that it would reapply for a tariff increase once consultations had been concluded.

“Therefore, the new application comes after conclusion of that consultation process,” she said.

Source: Lusaka Times

Investee Company News

Vedanta Resources to invest US$1 billion in Konkola Copper Mines

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LSE-listed Vedanta Resources has outlined its 50-year vision for mining in the Copperbelt and plans to invest US$1 billion for its next phase of growth.

This investment by Vedanta Resources is expected to create 7 000 jobs.

“I want Konkola Copper Mines (KCM) to be the largest integrated copper producer in Africa, the pride of Zambia and Vedanta Resource’s hub for copper and cobalt production in Africa,” sates Vedanta Resources chairman, Anil Agrawal.

“The ramp up of KCM is the centerpiece of my 50-year vision. It’s technically very challenging, because of the massive amount of water we have to pump out of the mine, but I’m determined to find technical solutions,” explains Agarwal.KCM is one of Zambia’s largest integrated copper producers.

Agrawal has committed to further help diversify the economy of the Copperbelt by supporting initiatives in agriculture and technology. KCM currently supports 2 700 families and small scale farmers through its Sustainable Livelihoods programme.

Agrawal made his ambitions for KCM knows after recently meeting with His Excellency President Edgar Chagwa Lungu. The meeting took place at State House in Lusaka. Lungu and the chairman discussed the outlook for the global mining industry and Vedanta’s investment in KCM.

KCM is one of Zambia’s largest copper producers, with mining operations in Chingola, Chililabombwe, Kitwe and Nampundwe. It is a subsidiary of Vedanta Resources, a London-listed diversified global natural resources company. The group produces aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland and Australia.

Feature image credit: Vedanta Resources (photograph of Vedanta Resources chairman, Anil Agrawal)

Source: Mining review
Archived Tenders

Invitation for Bids | Supply, Delivery, Installation and Commissioning of Digitisation Equipment and Software ONB No.: ZCCM-IH/090/2016

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  1. ZCCM Investments Holdings Plc. (ZCCM-IH) has received financing from own sources toward the CAPEX for the 2017/2018 Financial Year, and it intends to apply part of the proceeds of this financing to payments under the Contract for the Supply, Delivery, Installation and Commissioning of Digitisation Equipment and Software.

  2. ZCCM-IH now invites sealed bids from eligible and qualified bidders for the Supply, Delivery, Installation and Commissioning of Digitisation Equipment and Software. The delivery period is no more than six (06) weeks.

  3. Bidding will be conducted through the Open National Bidding (ONB) procedures specified in the Public Procurement Act of 2008 and the Public Procurement Regulations of 2011 and is open to all bidders from Eligible Source Countries as defined in the Bidding Documents.

  4. Interested eligible bidders may obtain further information from ZCCM-IH, K D Kabwe (Mrs.), E-mail: kabwekd@zccm-ih.com.zm and inspect the Bidding Documents at the address given below from 08:00 – 13:00 and 14:00 – 17:00.

  5. Qualifications requirements include:
    i) Experience and Technical Capacity:

    • Carried out at least two (02) contracts of a similar nature and scope in the last three (03) years;
    • Bidder to demonstrate availability of own servicing workshops in Ndola;

    ii) Liquidity of ZMW360,000.00

  6. A complete set of Bidding Documents in English may be purchased by interested bidders on the submission of a written Application to the address below and upon payment of a non refundable fee Zambian Kwacha Five Hundred (ZMW500.00). The method of payment will be Cash or Bank Certified Cheque.

  7. Bids must be delivered to the address below at or before 10:00 hours on 31st March 2017. Electronic bidding will not be permitted. Late bids will be rejected. Bids will be opened in the presence of the bidders’ representatives who choose to attend in person at the address below immediately after 10:00 hours on 31st March 2017. All bids must be accompanied by a Bid Securing Declaration (in the format included in the Bidding documents):

  8. The address referred to above is:
    K D Kabwe (Mrs.)
    ZCCM Investments Holdings Plc.
    ZCCM-IH Office Park
    Stand No. 16806
    Alick Nkhata Road
    Mass Media Complex Area
    P.O. Box 30048
    Lusaka
Archived Tenders

Invitation for Bids | Supply and Delivery of Brand New On-highway Vehicles ONB No.: ZCCM-IH/089/2016

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  1. ZCCM Investments Holdings Plc. (ZCCM-IH) has received financing from own sources toward the CAPEX for the 2016/2017 Financial Year, and it intends to apply part of the proceeds of this financing to payments under the Contract for the Supply and Delivery of the following Brand New On Highway Vehicles:
    Lot No. Description Quantity Delivery
    1 4 x 4 Double cab (with canopy) 01 4 – 6 weeks
    2 Panel Van (Mini Bus) 01 4 – 6 weeks
  2. ZCCM-IH now invites sealed bids from eligible and qualified bidders for the Supply and Delivery of Brand New On Highway Vehicles. The delivery period is no more than six (06) weeks.
  3. Bidding will be conducted through the Open National Bidding (ONB) procedures specified in the Public Procurement Act of 2008 and the Public Procurement Regulations of 2011 and is open to all bidders from Eligible Source Countries as defined in the Bidding Documents.
  4. Interested eligible bidders may obtain further information from ZCCM-IH, K D Kabwe (Mrs.), E-mail: kabwekd@zccm-ih.com.zm and inspect the Bidding Documents at the address given below from 08:00 – 13:00 and 14:00 – 17:00.
  5. Qualifications requirements include:
    i) Experience and Technical Capacity:

    • Carried out at least two (02) contracts of a similar nature and scope in the last three (03) years;
    • Bidder to demonstrate availability of own servicing workshops in Lusaka and the Copperbelt;

    ii) Liquidity of:
    Lot 1 – ZMW520,000.00
    Lot 2 – ZMW400,000.00

  6. A complete set of Bidding Documents in English may be purchased by interested bidders on the submission of a written Application to the address below and upon payment of a non refundable fee Zambian Kwacha Five Hundred (ZMW500.00). The method of payment will be Cash or Bank Certified Cheque.
  7. Bids must be delivered to the address below at or before 10:00 hours on 23rd March 2017. Electronic bidding will not be permitted. Late bids will be rejected. Bids will be opened in the presence of the bidders’ representatives who choose to attend in person at the address below immediately after 10:00 hours on 23rd March 2017. All bids must be accompanied by a Bid Securing Declaration (in the format included in the Bidding documents):
  8. The address referred to above is:
    K D Kabwe (Mrs.)
    ZCCM Investments Holdings Plc.
    ZCCM-IH Office Park
    Stand No. 16806
    Alick Nkhata Road
    Mass Media Complex Area
    P.O. Box 30048
    Lusaka