Tax stability and opportunities for growth in Zambian mining

The Zambia Chamber of Mines President Nathan Chishimba and CEO Sokwani Chilembo featured on Hot FM on Thursday 30th August where they talked about a number of issues, the main one being tax stability and opportunities for growth in the mining sector.

Other issues they discussed were; The continued dialogue with the Zambia Revenue Authority over Value Added Tax (VAT) refunds, the effects of inconsistent mining policies, mining’s contribution to Zambia besides tax revenue and the attractiveness of Zambia to mining investors.

Source: Zambia Chamber of Mines

Emerald auction raises $15m

GEMCANTON Investment Holdings says Government’s favourable policies in the mining sector have enabled it to raise US$15 million from the emerald auction held last week.
Company chief executive officer Abdul Ba said the incentives that Government has put in the acquisition of mining machinery is helping the emerald sector enhance the quality of gemstones.

Mr Ba said in an interview on Sunday that last week’s auction attracted about 36 international buyers from Russia, India and Israel.

The sale was conducted from August 15 to 18.

“Government is really playing a critical role in the way we are marketing our minerals. We are now able to bring in machinery that has the capability to polish and add more value to our gemstone.

Source: Zambia Chamber of Mines

Chinese firm launches $832 million Zambia copper mine

LUSAKA (Reuters) – NFC Africa, majority owned by China Non-ferrous Metals Company Limited (CNMC), on Wednesday launched output at a new $832 million Zambian copper mine, extending the firm’s lifespan by over 20 years.

Zambia, Africa’s second-largest producer of the metal, saw output rise 10.6 percent in the first half of the year on the back of stable power supply and relatively higher metal prices in recent months.

Trial production begun last week at Chambishi South-East Mine, which is expected to produce 60,000 tonnes of copper at full capacity by 2020, NFC Africa spokesman John Mtonga said.

NFC Africa currently mines at the Chambishi Main Mine and Chambishi West Mine and had been developing the Chambishi South-East Mine, Mtonga said.

Zambia’s President Edgar Lungu said during the launch that NFC Africa had so far invested more than $500 million of the total planned project investment of $832 million in the project, about 400 km (250 miles) northwest of Lusaka.

The South East Ore Body has copper ore reserves estimated at more than 76 million tonnes at an average grade of 2.18 percent, according to a document submitted to the environmental agency.

Other foreign mining companies operating in Zambia include Canada’s First Quantum Minerals, Glencore, Barrick Gold and Vedanta Resources.

Source: Reuters

Size isn’t everything

It accounts for less than 2% of annual copper production, yet Chibuluma Mine, situated on the Copperbelt, is one of Zambia’s most successful mines in safety, productivity and profitability.

Chibuluma Mine has had “only” one fatality in eight years. Its copper output per employee is 50% higher than the Zambian industry average, and its flagship Chibuluma South project was profitable barely two years after production, which is unusual for the industry. The mine has paid corporate tax every year since 2007, with a total of $112 million paid to date.

Chibuluma is a highly mechanised underground mine just outside Kalulushi, about 22 km from Kitwe. It employs 850 people, about 500 of whom are contractors. The mine produced 13 300 tonnes of copper in 2015 – a fraction of the country’s output of 711 000 tonnes.

Chibuluma was one of the first Zambian mines privatised in 1997. It is 85%-owned by the South African mining company Metorex, a wholly owned subsidiary of China’s Jinchuan Group since 2012.

What accounts for its success?

“We mine one of the highest-grade copper deposits on the Copperbelt,” says chief geologist, Narendra Shekhawat. “That means we do proportionately less work to produce the same amount of copper.”

Although the ore body is not very big, it has an average copper grade of 3%. This contrasts with large open-pit mines such as Barrick Lumwana or FQM’s new Sentinel Mine, where the grade is so low (barely 0.5%) that colossal quantities of ore have to be unearthed and treated, at considerable cost, to extract the copper. Chibuluma’ s smaller operation means not only lower costs but a simpler work set-up – problems are easier to spot and fix, approvals happen faster and turnaround times are shorter.

The mine has none of the frenetic activity characteristic of larger mines. About 600 metres underground, after carefully controlled blasting to expose the ore, a small fleet of only five articulated dump trucks drive up a long winding tunnel and bring the ore to the surface. After crushing and grinding, the ore passes through the small processing plant and emerges as copper concentrate, which is then driven to nearby Chambishi copper smelter and turned into blister copper. Very small quantities of silver are recovered as a by-product during the smelting process –about $16 000 worth a month.

Despite its enviable track record, Chibuluma has not escaped the effects of the current mining downturn. Like Zambia’s other mines, it had to shed workers in 2015, embarked on major cost-cutting and scaled back production. At the height of the copper boom in 2013, Chibuluma produced 18 000 tonnes of copper a year; that is now down to 10 000 tonnes.

“Chibuluma has one of the highest grades of copper on the Copperbelt”
“Reduced production means reduced volumes of ore through our processing plant, so we have a lot of excess capacity,” says Barry Kalumba, Head of Processing.

To maintain processing volumes, Chibuluma is scheduled to start mining a low-grade deposit of 2% at its new Chifupu project. It is also trying to persuade potential new mining ventures in the area to send their ore to Chibuluma for processing, instead of building their own processing plants.

However, the biggest challenge is that the current mineral deposit will be mined out within the next few years.

“Unless our ongoing exploration finds a new copper deposit worth exploiting soon, Chibuluma will probably close sometime between 2020 and 2022,” says Eustus Munsaka, Head of Finance. “All mines have a natural lifespan, and we are about to reach the end of ours.”

Already, a $4.4 million rehabilitation programme is under way to restore the landscape to its original state. Some 33 000 trees have been planted, carpet grass has been laid, and firebreaks have been built. Once the mine stops operating, various structures and buildings will be demolished, roads will be scraped, more land will be replanted with vegetation, and any contaminated land will be neutralised with lime. The entrance to the mine will be sealed to reduce the risk of acid mine drainage.

After closure, the shareholder Metorex and its parent company Jinchuan will shift their focus to the larger copper-mining investments in the neighbouring Democratic Republic of the Congo.

Even though closure is still a few years off, Chibuluma has developed an enviable track record in its contribution to Zambia since it was privatised in 1998. The Mine has paid taxes to government, uplifted the community through its Corporate Social Responsibility programme, and stimulated the local economy and job creation through the spending power of its employees.

Source: Mining for Zambia

ZCCM-IH | Delay in Dividend Payments to Shareholders on the Paris Euronext Access Stock Exchange

Delay in Dividend Payments to Shareholders on the Paris Euronext Access Stock Exchange

Lusaka, Zambia – At the ZCCM Investments Holdings Plc (ZCCM-IH) Annual General Meeting held on 29 June 2018, the shareholders of the Company approved a Final Dividend of K0.84 per share for the financial year ended 31 March 2017. Subsequently, dividend payments were effected on Monday, 30 July 2018.

However, due to financial and other regulatory requirements governing transactions across different jurisdictions, ZCCM-IH could not make the payments directly to shareholders based in France, and such has had to appoint an Agent to facilitate dividend payments.

Thus, for Shareholders based in France, payments await the conclusion of the engagement processes for a Dividend Paying Agent which has taken longer than anticipated. It is hoped that the engagement process will be concluded soon.

All affected shareholders will be notified once the engagement process is finalised. The inconvenience caused is deeply regretted.

Yours Sincerely,


Dr Pius C Kasolo
Chief Executive Officer

Market Announcement – Update on ongoing ZCCM-IH transactions

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company”) and market participants are advised by way of update of the key strategic and operational activities currently on-going in the Company as outlined below.

1. ZCCM-IH’s strategic positioning to derive value from its investments

  • ZCCM-IH has recently developed a new Strategic Plan to run from 2018 to 2023 (the “Plan”). Through this Plan, ZCCM-IH will undertake the following:
  • Increase dividend revenue to sustainable levels while maintaining consistency;
  • Diversify revenue sources to include royalties, streaming, copper splits and participation in the mining supply chain; and
  • Recover due receivables from investee companies.

Through the implementation of the Plan, ZCCM-IH intends to unlock further value from its subsidiaries and investee companies, which will ultimately reflect through the growth of its Net Asset Value (“NAV”) year-on-year.

The Plan has been posted on the ZCCM-IH website and can be accessed on the ZCCM-IH website or directly here

2. Dividend policy

The ZCCM-IH Board revised the Company’s Dividend Policy as follows: “the Company may pay a minimum of 35% of the unconsolidated Net Profit after Tax (“NPAT”) for any financial year in which a positive unconsolidated NPAT was recorded”. This is a revision from 20% to 35% of Net Profit After Tax. The revised rate of 35% has been applied on the dividend payable from 30 July 2018 as previously announced.

3. Status of Ndola Lime Company Limited

Ndola Lime Company Limited (“NLC”) continues to be in distress. The ZCCM-IH Board is considering options to determine the way forward for NLC. The decision will be communicated in due course.

4. Processing of title deeds for properties sold by the Company during privatisation

ZCCM-IH re-established an office in Kitwe in late 2017 to expedite the processing of documents required to transfer title to purchasers of real property that previously belonged to the Company. All those with queries relating to the transfer of title for ex-ZCCM Ltd (the former name for ZCCM-IH) properties are encouraged to visit the ZCCM-IH offices at the following address: Investments House – Rem. of Sub A of Farm No. 1591, Kantanta Street, Kitwe, Zambia.

5. Maamba Collieries Limited (“MCL”) Coal Production and Thermal Power Plant

The coal and power production at MCL has progressed well. MCL is producing sufficient low-grade coal for the thermal power plant and high-grade coal to meet customers’ needs. The thermal power plant is producing 300MW of power and selling 265 MW to ZESCO. The extension of the planned additional 300MW is pending a feasibility study.

6. ZCCM-IH’s 2000 Hectares (Ha) of land in Lufwanyama

ZCCM-IH owns 2,000Ha of virgin land in Lufwanyama district on the Copperbelt Province of Zambia. No farming activities have been undertaken on this land thus far. During the 2018-2023 Strategic Plan period, ZCCM-IH will be looking to partner with an investor in the Agricultural sector to develop the farm.

7. Partnership with Horizon Mining Limited to reprocess tailing dams

  • ZCCM-IH and Horizon Mining Limited (“Horizon Mining”) set up a Joint Venture Company (“JVC”) in November 2013, following a Consent Order signed by the parties, as a resolution to a legal suit that arose in relation to Tailings Dams (“TDs”) No. 25, 26 and 27 located in Kitwe, Zambia. The JVC, Copper Tree Minerals Limited (“Copper Tree”), will undertake to reprocess TDs 25, 26 and 27.
  • In March 2015, ZCCM-IH transferred its mining licences for TDs 25, 26 and 27 to Copper Tree and became entitled to a 15% Free Carry shareholding in Copper Tree.
  • In 2017, ZCCM-IH sold land in Kitwe to Copper Tree in exchange for additional shareholding. The extra shareholding as a result of the sale resulted in an increase in ZCCM-IH’s shareholding to 15.58% in Copper Tree. The said land is to be used as a dump site for waste materials arising from reprocessing the TDs.
  • In June 2018, ZCCM-IH and Horizon Mining signed a Shareholders’ Agreement relating to Copper Tree.
  • Copper Tree is in its early developmental stage and is yet to set up a plant and start reprocessing the TDs.

8. Recapitalisation of Investrust Bank Plc

ZCCM-IH is in advanced discussions with Investrust Bank Plc relating to the recapitalisation of the Bank. These discussions are expected to be finalized imminently and full announcement will be made once discussions have been completed.

9. Shareholders Agreement signed on the Cement Manufacturing Project

In July 2018, ZCCM-IH signed a Shareholders’ Agreement with China Machinery Construction Group Limited (“SinoConst”) for the development of a cement plant under the incorporated JVC, Central African Cement Limited (“CAC”).

Under the Shareholders’ Agreement entered into by ZCCM-IH and SinoConst, ZCCM-IH shall hold 35% of the shares in CAC while SinoConst shall hold the remaining 65%.

Dr P C Kasolo
Chief Executive Officer
Issued in Lusaka, Zambia on Friday, 3rd August 2018

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

First Issued on Friday, 3rd August 2018



ZCCM-IH, Chinese firm sign agreement

ZCCM-Investment Holdings (IH) has signed a shareholders’ agreement with China Machinery Construction Group (SinoConst) for the development of a US$480 million cement plant in Masaiti.

The plant will be under the incorporated JVC, Central Africa Cement (CAC) Limited.

Company chief executive officer Pius Kasolo said under the shareholders’ agreement signed last month, ZCCM-IH will hold 35 percent of the shares in CAC while SinoConst will hold the remaining 65 percent.

This is contained in a statement issued on Friday by Stockbroker Zambia Limited, as a sponsoring broker on the Lusaka Securities Exchange.

And ZCCM-IH says the construction of the cement plant, will also include a thermal power plant, expected to start this year.

In an interview at the ongoing Agricultural and Commercial Show, ZCCM-IH public relations manager Loisa Kakoma said the project will create about 1,000 jobs with a production capacity of about 2.1 million tonnes of cement annually.

Source: Zambia Daily Mail

Mopani to produce 8 million tonnes copper

MOPANI Copper Mines (MCM) projects to start producing about eight million tonnes of copper ore per annum in the next three years. And MCM has handed over community projects it undertook in Mufulira district to Government.

The projects include an extended wire fence at Mufulira Correctional Facility, a wall fence around the district administration offices, the subordinate court and Mufulira Central Police Station.

Source: Daily Mail

CEC Market Announcement: Supply of up to 78MW of electricity to Metalkol SA

Copperbelt Energy Corporation Plc
[Incorporated in the Republic of Zambia]
Company registration number: 39070
Share Code: CEC
ISIN: ZM0000000136
[“CEC” or “the Company”]


Copperbelt Energy Corporation Plc (“CEC” or “the Company”) is pleased to inform its Shareholders and the general public that the Company has signed a long-term contract to supply up to 78MW of electricity to Metalkol SA (“Metalkol”), a major cobalt and copper tailings reprocessing operation in the Democratic Republic of Congo (“DRC”). Metalkol, which is owned by Eurasian Resources Group (“ERG”), a leading diversified natural resources group, is also a low-cost hydro-metallurgical facility.

The contract, agreed with Metalkol and DRC’s national electricity company Societe National d’Electricite (“SNEL”), secures electricity supply to Meltakol for up to ten years in two phases.

The first phase, to deliver a total of 62MW, will run until the second quarter of 2019; following which power supply will ramp up to 78MW per year during the second phase and for the remainder of the contract.

The Company’s Managing Director, Owen Silavwe, has described the agreement as a demonstration of CEC’s commitment, agility and promise to meet the specific and unique requirements of customers in Zambia and the DRC market, and a reaffirmation of the Company’s growing partnership with SNEL and the mining community in the DRC.

Benedikt Sobotka, CEO of Eurasian Resources Group, commented that “This is an important milestone in the progress of the Metalkol project, a unique development for the global battery industry. It is an example of sustainable and environmentally conscious treatment of the local environment, and of our wider strategic ambitions in Africa. Together with our partners, who are vital companies in their respective countries, we have found an effective solution to guarantee a reliable electricity supply, which has previously been an issue in the region.”

SNEL’S Director General, Jean-Bosco Kayombo Kayan, said the trilaterak agreement signed with CEC and Metalkol demonstrates SNEL’s willingness to serve its customers by offering expertise in the Southern African energy market.

Issued in Lusaka, Zambia on Thursday, 2nd August 2018

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

First Issued on Friday, 27th July 2018