METS Extract from 2018 Annual Report

Misenge Environmental and Technical Services Limited (METS) earned a total of K5.48 million (unaudited) as revenue for the year ended 31st March 2018 (2017: K8.80 million). Of the revenue, K4.6 million was realised from recurring services to ZCCM-IH (2017: K2.63 million) and K0.88 million was from non ZCCM-IH sources (2017: K6.17 million). METS recorded a net loss of K4.5 million (2017: K1.22 million loss).

During the year under review, ZCCM-IH purchased and installed the Fume and Dust extractors at the Kabwe Analytical Laboratory. The process of Accreditation of the Analytical Laboratory to the Southern African Development Community Accreditation Services (SADCAS) begun during the year under review.

There were no dividends declared during the year under review (2017: Nil).

Investrust Plc Extract from 2018 Annual Report

nvestrust Bank Plc (“Investrust”) recorded a 19.9% decrease in net interest income to K48.91 million during the year ended 31st December 2017 (2016: K40.82 million). Total operating expenses increased marginally by 1% on a year-on-year basis to K149.65 million (2016: K148.23 million). During the year under review, the Bank recorded a loss of K38.00 million (2016: K47.40 million loss).

Subsequent to the year-end, ZCCM-IH increased its shareholding in Investrust from 45.4% to 71.4% through the mandatory offer that commenced on 9th April 2018 and closed on 30th April 2018.

The Bank’s share price on the LuSE closed the period under review at K13.50 (2016: K13.50).There were no dividends declared during the financial year under review (2016: Nil).

CEC Extract from 2018 Annual Report

During the financial year ending 31st December 2017, revenue of K 3,724 million (US$390 million) (2016:
K3,503 million (US$355 million) was recorded driven mostly by the increase to the end-user mining tariff. Adjusted Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) was K964 million (US$101 million) [(2016: K923.54 million (US$90 million)].

As at 31 March 2018, the Company had cash and cash equivalents of K645 million (US$68 million) compared to total borrowings of K835 million (US$88 million) out of which K133 million (US$14 million) is payable in 2018. The Company’s net current assets as at that date was K664 million (US$70 million). Based on the financial forecast, it is expected that the working capital of the business over the next 12 months will be positive and that the Company will be profit-making during the same period.

The telecoms subsidiaries (CEC Liquid Telecom and Hai Telecoms) has been expanding its market share in the wholesale and retail segments and have been profitable two years consecutively; exhibiting potential for further growth prospects. The CEC board further recognises that the Company is primarily a power business and that there is need to continuously review its strategy around its continued investment in the telecoms operations going forward.

On 23 January 2018, the Company received a firm intention by Zambian Transmission LLP to buy all the shares in the capital of CEC. The board considered the offer and appointed an Independent Committee of the Board to consider the offer. The offer was sent, through an offer document to all shareholders, with an offer period commencing 20 February 2018.

Total Dividend paid for 2017 was K209 million (US$21 million) [(2016: K161.8 (US$16.4 million)].

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NFC Africa Mining Plc Extract from 2018 Annual Report

NFC Africa Mining Plc (NFCA) recorded a turnover of K1,523.9 million (US$159.6 million) for the financial year ending 31st December 2017 [(2016: K1,171.87 million (US$114.2 million)] due to increased copper prices.

NFCA recorded a profit after tax of K153.73 million (US$16.1 million) [(2016: K203.18 million (US$ 19.8 million loss)].

NFCA continues to work on the development of the South East Ore Body project. The company reported project expenditure of K4,408.42 million (US$461.7 million) as at 31st December 2017. Total planned project investment is 8,280.27 million (US$832 million). Once completed the project is expected to extend the life of mine by 20 years. The design and annual capacity at full production is estimated at 3.3 million tonnes of ore containing 60,000 tonnes of copper.

There were no dividends paid during the year ended 31st December 2017 (2016: Nil).

Ndola Lime Company Ltd Extract from 2018 Annual Report

Ndola Lime Company Limited (NLC) reported total revenues for the financial year ended 31st March 2018 of K60.1 million (2017: K89.6 million) and a loss after tax of K190 million (2017: K1.1 billion loss).

Major contributors to the loss were the below budget sales figures, huge finance costs; and penalties on overdue statutory obligations totalling K100 million.

On 21st September 2017, NLC’s Vertical Kiln 2 (VK2) was engulfed in flames, an occurrence that damaged several components of the kiln, rendering it dysfunctional. VK1 underwent refurbishments to its refractory bricks but could not be fired up due to NLC’s lack of working capital, a situation that eventually led to production at the company grounding to a halt with only limited repacking activity going on.

Subsequent to the year end, two (2) former employees of Ndola Lime Company Limited (NLC) instituted proceedings to the High Court of Zambia to place NLC under supervision pursuant to the Corporate Insolvency Act No. 9 of 2017. By order of the Court dated 5th October 2018, the Official Receiver was appointed as Interim Business Administrator of NLC. The application for the Business Rescue Proceedings will be heard in January 2019 at which all affected persons (including ZCCM-IH) will be heard. However, ZCCM-IH remains committed to the affairs of NLC and will continue to pursue all activities that better the Company and ZCCM-IH’s investments.

There were no dividends declared during the year under review (2017: Nil)

Mopani Copper Mines Plc Extract from 2018 Annual Report

During the financial year ending 31st December 2017, Mopani Copper Mines (MCM) recorded net revenue of K3,366.62 million (US$352.59) million [(2016: K5,994,62 million (US$584.18 million)]. The net loss was at K2,770.14 million (US$290.12 million) [(2016: K1,823.08 million (US$177.66 million net loss )].

MCM produced a total of 98,869 tonnes of finished copper during the period under review and this was 11,178 tonnes lower than the prior year (2016: 110,047 tonnes). Total copper production was lower than the previous year mainly due to the 45 day planned smelter shutdown in 2017. Total copper produced from own sources was at 41,738 tonnes (2016: 41,100).

MCM continues to invest heavily in infrastructure projects to increase the copper production and increase the life of the mine by twenty five years. The Mindola Deeps and Mufulira Deeps Projects progressed well during the year under review with total investment in the two projects amounting to US$578.00 million as at 31st December 2017. The forecasted completion is March 2019 for all works in Mindola Deeps and Mufulira Deeps Projects. MCM already invested over K3,884.71 million (US$406.85 million) in the Synclinorium Shaft Project and is planning another estimated K2,005.13 million (US$210.00 million) planned for a new Synclinorium Concentrator (the Concentrator). Site preparation and demolition works at Nkana site for the Concentrator commenced and were 80.00% completed.

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

Lubambe Copper Mines Extract from 2018 Annual Report

Lubambe continued with restructuring through downsizing of output and the reduction of related labour cost. The largest contributors to the unit cost savings were a reduction in labour cost due to a 66.00% reduction in expatriate labour, a reduction in stoping dilution obtained through an improvement in the mining stoping method, and a 4.00% increase in plant recoveries obtained through plant optimisation initiatives.

This is the first reporting period in which Lubambe operated in accordance with the reduced production target of 80,000 tonnes of ore per month. The reduced target was implemented in March 2016 to curtail operating losses, save cash and preserve the ore body whilst implementing a strategy to upgrade the underground dewatering infrastructure.

During the period under review a labour restructuring programme was successfully concluded which aligned the total labour complement with the revised lower production rate of 80,000 tonnes per month. Ongoing capital expenditure was curtailed to preserve cash with the majority of expenditure being incurred for mine ramp development.

The Lubambe Extension Project was put on hold until an opportune time when conditions are suitable for additional investment. This high-grade area remains an integral part of the future development of the Lubambe ore body.

Lubambe Copper Mine Limited (Lubambe) reported revenues of K517.37 million (US$54.18 million) for the year ended 31st March 2018 [(2017: K824.92 million (US$ 83.65 million)]. Operating costs were above budget at K1,021.84 million US$107.01 million compared to the K973.62 million (US$101.96 million) target due to increased engineering activity as production was being increased. The loss for the year was K350.4 million (US$36.70 million). Lubambe’s financial year was changed to now run from 1st January to 31st December.

For the 9 months to 31st March 2018 Lubambe’s mined volumes were 840, 376 tons of copper ore, above the target of 808,122 tons as activity was being ramped up. Total contained copper produced over the same period was 14,891 tons, above the target of 14,566 tons.

The historical losses had been caused by the initial challenges Lubambe had faced during the project’s development phase which included flooding, dilution during the mining process due a thin ore body thereby increasing running costs. Dilution was further exacerbated by the wide inter-level vertical spacing which was upwards of 17 meters ramp spacing.

During the year under review, EMR Capital of Australia completed the purchase of the ARM and VALE stakes in Konnoco, thereby gaining an 80% ownership of Lubambe. After the acquisition, EMR Capital put in place various interventions at the mining and ore treatment processes to improve production.

Production had initially been capped at 80,000 tonnes of ore to contain costs but in EMR’s business model this level is deemed to be unsustainable. EMR have ramped up and are targeting to reach the 200,000 tonnes of ore production level by 2019.

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

Chibuluma Mines Extract from 2018 Annual Report

Revenue for the financial year ended 31st December 2017 was K671.24 million (US$70.3 million) [(2016: K541.81 million (US$52.8 million)]. Net profit over the same period was K67.12 million (US$7.03 million) [(2016: Loss of K31.09 million (US$3.03 million)]. Chibuluma Mines Plc’s (CMP) cash position reduced to K7.56 million (US$0.76 million) as at 31st December 2017 [(2016: K16.18 million (US$1.64 million)].

The Chibuluma South ore reserve continued to be depleted during the year, life of mine is now only 2 years. The development of the Chifupu ore body progressed well with Capital developments now upto 418 metre level.

On 27 June 2017, the Company incorporated a wholly owned Subsidiary company, Lufwanyama Mining Manufacturing and Trading Services Limited (LMMTS). This initiative is in response to the remaining short Life of Mine of the Company which is expected to cease operations in 2022. LMMTS commenced operations in August 2017 and during the year it did not trade with any external third parties. As part of the capacity building LMMTS were awarded mine development and support contracts at the Chifupu Mine on a competitive basis.

The company continued implementation of various cost saving and cost containment initiatives to ensure it achieved its set KPI’s and advance from a loss to a profitable position. Management continued focusing on identifying and progressing viable initiatives which would assist in extending the footprint of the Jinchuan/Metorex Group in Zambia beyond the current Life of Mine.

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

Chambishi Metals Extract from 2018 Annual Report

The Company had revenues of K3,470.79 million (US$363.5 million) for the year ended 31st December 2017 ahead of budgeted K2,472.04 million (US$258.9 million). EBITDA was K207.94 million (US$21.7 million) compared to budgeted K276,900 (US$29,000). Copper produced for the 12 months to 31st December 2017 was 36,153 tonnes and 2,520 tonnes of Cobalt was produced.

Chambishi Metals Plc has budgeted US$9 million for capital expenditure for 2018 which has been earmarked for the Acid Plant, Copper and Cobalt Processing and some analytical services.

The Eurasian Resources Group has confirmed its intention to continue to provide financial support to the Company to enable it to continue its operations and meet its obligations.

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

KCM Extract from 2018 Annual Report

Konkola Copper Mines (KCM) reported total revenue of K12,251.43 million (US$1,283.0 million) for the financial year ended 31st March 2018 [(2017:K8,621.47 million (US$874.3 million)]. The increase in revenue was attributed to higher metal prices and increased sales volumes. The net loss for the year was at K1,102 million (US$115.4 million) [(2017: K1,367.72 (US$138.7 million loss)].

Total finished copper production during the financial year increased by 9 percent to 195,300 tonnes for the year ending March 2018 (2017: 179 800 tonnes) compared to the previous financial year.

During the year under review, KCM mine metal production volumes remained subdued as lower feed grades and lower copper recoveries at the Tailings Leach Plant offset improvements in production output at both Nchanga and Konkola.

Moving forward, KCM’s strategy continues to be underpinned by vigorously pursuing higher operating productivity levels at the Konkola underground mine, improving recoveries at the Tailings Leach Plant facility, increasing utilisation of the smelter and cost containment.

There were no dividends declared during the year under review (2017: Nil).