March 2018

Annual Report Summaries

Kariba Minerals Ltd Extract from 2018 Annual Report

Kariba Minerals Limited (KML) reported total revenue of K17.18 million for the year ended 31 March 2018 (2017: K20.64 million). KML reported a net loss of K10.22 million during the financial period under review (2017: K3.45 million loss).

For the year ended 31st March 2018, KML produced a total of 627.52 tonnes of commercial grade amethyst (2017: 712.18 tonnes) and produced 3.54 tonnes of high grade amethyst (2017: 1.86 tonnes). KML ore production was at 11,273 tonnes (2017: 10,517 tonnes). KML held an auction in February 2018 in Jaipur, India during the period under review. A total of 3.35 tonnes of high grade amethyst valued at US$270,000 was sold at the auction. Additionally, KML introduced 1.50 tonnes of a new medium grade amethyst at the auction for the first time and it sold above its reserve price. KML going forward plans to have a schedule of the new medium grade amethyst at the auction.

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

Maamba Colliers LTD Extract from 2018 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of K1,172.00 million (US$122.73 million) for the year ending 31st March 2018 [(2017: K100.38 (US$10.18 million)] and had profit after tax of K148.87 million (US$15.59 million) [(2017:K211.2 million (US$2.15 million)]. The increase in revenue and profits was due to the recording of all revenue and costs from the Thermal Power Plant from the commercial operating date in August 2017. The company’s assets exceeded its liabilities by K1,172.1 million (US$123.50 million) as at 31st March 2018 (2017: K1,037.1 million (US$107.92 million). Additionally, the company had accumulated losses amounting to K675 million (US$70.69 million) [(2017: K842.72million (US$87.69 million)].

During the year under review, the 300MW Thermal Power Plant together with the 330kV Transmission Line and Kariba Water Pumping System were taken over from the respective Engineering, Procurement and Construction (EPC) Contractors by MCL. MCL is now operating and maintaining the facilities through its Operations and Maintenance (O&M) Contractor.

MCL extracted 530,030 tonnes of high grade coal (2017: 355,126 tonnes) and 120,893 tonnes of low grade coal (2017: 188,325 tonnes). Coal transported to the Power Plant was at 1,076,216 tonnes (2017: 555,810 tonnes). The Coal Handling and Processing Plant throughput was at 168,934 tonnes (2017: 199,487 tonnes).

The revenue and financial position of the company is expected to improve going forward given the commissioning of the Thermal Power Plant.

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

Kansanshi Mining Plc Extract from 2018 Annual Report

Kansanshi Mining Plc (KMP) had sales revenue of K15.66 billion (US$1.64 billion) [(2016: K 14.51 billion US$1.5 billion)] for the financial year ended 31st December 2017. Gross profit of K6,263.65 million (US$656 million) was higher than that the K1,929.18 million (US$188 million) reported in 2016 on a combination of the increase in sales revenues and lower operating costs.

Copper production for the financial year ended 31st December 2017 was 250,801 tonnes, 1% lower than 2016 (253,272 tonnes) primarily due to lower plant recovery on the sulphide circuit, reflecting the drive to improve the concentrate quality and treatment of weathered material and lower copper recovery on the oxide circuit caused by changes in the ore mineralogy. Copper production was also impacted by reduced mixed final tails processed through the leaching circuit before and during the third quarter smelter shutdown to manage the onsite acid inventory.

Gold production was 140,595 ounces, about 5% lower than in 2016 mainly due to lower concentrate production. AISC (All-in Sustaining Cost) of $1.54 per lb. was $0.03 per lb. lower than 2016. Higher deferred stripping and royalties, treatment and refining charges and a lower gold by-product credit were offset by a credit to site administration costs. The credit followed a review of recoverable costs and operational provisions in the second and third quarters. Higher royalty costs resulted from higher royalty rates, which range from 4% to 6% depending on the underlying copper price.

The Kansanshi Smelter achieved record production and throughput in 2017, having treated 1,211,740 DMT (Dry Metric Tonnes) of concentrate, a 6% increase over 2016 despite the planned third quarter shutdown. Production totalled 297,553 tonnes of copper anode and 1,128,000 tonnes of sulphuric acid, each 16% and 2% higher respectively than 2016. The quality of concentrate treated improved significantly with over 26% copper in concentrate grade compared to 23% recorded during 2016. The overall copper recovery rate achieved was 96%. Production in 2018 is expected to be approximately 240,000 tonnes of copper, and approximately 145,000 ounces of gold. The High Pressure Leach circuit is expected to be in operation throughout 2018, with a 70-day planned maintenance shutdown for relining expected to occur during the second and third quarter of 2018.

At the Board meeting held on 22 March 2018, the Directors proposed dividend payments of K740 million (US$78 million), split as K180 million (US$19 million) related to the year-end 31st December 2016 and K560 million (US$59 million) for the year ended 31st December 2017.
Annual Report Summaries

CNMC Luanshya Copper Mines Extract from 2018 Annual Report

CNMC Luanshya Copper Mines Plc (CNMC) recorded a turnover of K2,559 million (US$268 million) for the year ended 31st December 2017 (2016: K1,701 million (US$172 million). The profit after tax was K 353 million (US$37 million) (2016: K3.79 million (US$ 0.397 million loss)).

CNMC planned to produce 33,000 tonnes of copper in 2017, the actual volume produced was 43,177 tonnes as a result of increased mined volumes at Muliashi mine. Baluba mine remained under care and maintenance during the year with the total care and maintenance costs being K121.26 million (US$12.9 million) in 2017. Works to bring it back into production commenced in the first quarter of 2018.

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

Corporate Announcements

ZCCM-IH | Appointment of Board Chairman

In accordance with Section 3.59 of the Lusaka Securities Exchange Listings Requirements, ZCCM Investments Holding Plc (ZCCM-IH) is pleased to announce the appointment of Mr. Eric Suwilanji Silwamba, SC as Board Chairman of the Company effective 6 March 2018.

Mr Silwamba is the Principal Partner at Messrs Eric Silwamba, Jalasi and Linyama Legal Practitioners. He holds a Bachelor of Laws Degree with Merit (LL.B) from the University of Zambia. Mr Silwamba is an Advocate of the High Court of Zambia enjoying the rank and dignity of State Counsel. He has over 30 years’ extensive experience in both private and public practice. Mr Silwamba was elected Member of Parliament for Ndola Central Parliamentary Constituency in October 1991 and was re-elected in 1996 and 2001. He served in very senior positions in government including as former Deputy Minister of Information and Broadcasting Services, Deputy Minister (Special Duties) Office of the President, Minister of Presidential Affairs and Minister of Justice and Government Chief Whip. Mr. Silwamba has had the opportunity of handling some of the most complex and high-profile litigation in Zambia that relate to mining, commercial law, tax, administrative, criminal and constitutional law. He is also a member of the Chartered Institute of Arbitrators of the United Kingdom and a qualified legal draftsperson.

By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on Thursday, 29th March 2018

Lusaka Securities Exchange Sponsoring Broker
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Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on Thursday, 29th March 2018

Industry News

Electric vehicles are poised to unleash a cobalt boom

EACH new electric vehicle (EV) uses about 10kg (22 lbs) of cobalt. More than half of the world’s reserves and production of the metal are in one dangerously unstable country, the Democratic Republic of Congo. Moreover, four-fifths of the cobalt sulphates and oxides used to make the cathodes for lithium-ion batteries are refined in China. China has already proven willing to restrict exports of rare-earth metals to foreign firms. And although China is not thought to be cornering or manipulating the market for cobalt, growing global demand has still sent the the element’s price soaring.

Non-Chinese battery manufacturers have already begun looking for ways to protect themselves from potential shortages. Their best answer to date is another metal closely associated with cobalt: nickel. Some firms are now producing cobalt-lite cathodes, by raising the nickel content to as much as eight times the amount of cobalt. This allows the battery to run longer on a single charge—but also increases the risk it will burst into flames. So far, the price of nickel has remained flat. But according to McKinsey, a consultancy, by 2025 EV-related demand for nickel is expected to rise 16-fold.

Source: The Economist
Annual Report Summaries

CEC Africa Extract from 2018 Annual Report

Revenue for year ended 31st December 2017 largely remained relatively flat at K2,070.2 million (US$216.8 million), a 6% decrease from the previous year. This is despite the slight improvement in billing efficiency at Abuja Electricity Distribution Company Plc (AEDC) on the back of low energy supply growth.

The company incurred a net loss for the year ended 31 December 2017 of K2,578.5 million (US$270.05 million) [(2016: Loss K 942.73 million (US$91.87 million)] and, at that date the company’s total liabilities exceeded total assets by K3,171.58 million (US$318.65 million) [(2016: K479.58 million (US$48.60 million)]and the current liabilities exceeded its current assets by K6,279.87 million (US$631.00 million) (2016: K3,331.73 million US$337.63 million).

The Group continued to expend significant effort to further restructure the US Dollar denominated acquisition finance facility that was obtained from UBA to finance the acquisition of 60% of AEDC through KANN Utility Company Limited (KANN). Interest payments on the facility are current.
In Nigeria, the implementation of the Power Sector Recovery Program (PSRP) commenced signalling the commitment of the Federal Government to ensure commercial viability of the entire power sector value chain, including, ultimately delivering optimal benefit to the end users. In the short to medium term, it is expected that the application of the PSRP principles will turn the CEC Africa asset, the Abuja Electricity Distribution Company Plc (AEDC) into a profit making entity.

No dividends were declared and paid by the Company during the year (2016: Nil).