July 2019

Investee Company News

Mopani Backfills Sinkhole

Mopani Copper Mines has commenced the process of backfilling the sinkhole near the South Ore Body (SOB) Shaft in Kitwe.

Public Relations Manager Nebert Mulenga said the move is a safety precaution in line with mine safety regulations.

He said backfilling exercise has already started and will go on until the process is completed.

“Mopani Copper Mines Plc is working closely with the Mines Safety Department (MSD), Zambia Police Service and other relevant authorities during this operation,” Mulenga said.

He said the sinkhole is a two-hectare caving area within Mopani Copper Mines Plc’s mining rights area and was a safety hazard to the informal miners invading it.

Last week, the mining giant had illegal miners to contend with immediately an announcement was made that the area would be closed, a move that sparked riots in Kitwe’s Wusakile Township.
Investee Company News

Negotiations with potential KCM buyers haven’t yet started – Musukwa

Mines Minister Richard Musukwa says government has not started any negotiations with any potential buyer of Konkola Copper Mine (KCM) Plc’s assets.

Musukwa explained that there had been no steps to invite effective bids of the sale of KCM’s assets as the process would be done after the pending court clearance.

The Minister said this in Parliament, Tuesday, when he responded to a written question from Nchanga PF member of parliament Chali Chilombo, who wanted to know whether government was aware that the residents of Chililabombwe and Chingola were extremely anxious over the liquidation of KCM and if so, how far government had gone with the potential buyers of KCM’s assets.

“Madam Speaker, in recognizing the guidance and sanctity of the Judiciary, who are handling the matters concerning the liquidation process of Konkola Copper Mine, government has not started any negotiations with any potential buyer of KCM assets. However, KCM has been visited by several sections of international and local entities expressing interest following the announcement of the divorce process by Konkola Copper Mine and ZCCM-IH. There has been no steps to invite effective bids of the sale of the assets. This process will be done and has been reserved awaiting clearance from the courts of law, which we respect. The House may wish to know that the liquidation process is basically the first process before resolving the issues surrounding KCM. We have taken advice to ensure that the sale is done within the confines of the law and pursuant to a court order,” Musukwa said.

He insisted that there was no sale that would take place at KCM, which would undermine the integrity of the court process.

“In that regard, no sale will be undertaken that undermines the integrity of the court process, and as government, we understand that the due process of the law has to be followed and respected and we are committed to that effect. Madam Speaker, to this effect, I wish to state that the High Court proceedings, which are currently going on, are matters that the Government of the Republic of Zambia continues to respect because we are a government of laws,” Musukwa said.

And Musukwa said the decision to offload KCM was made on account of the deteriorating social and economic situation caused by Vedanta Resources’ mismanagement.

“Government is fully aware of the anxieties of residents of Chililabombwe and Chingola over the future of KCM. The House may wish to know that residents of Chingola and Chililabombwe started raising concerns over the future of KCM way before the commencement of the liquidation process. The action Zambia Consolidated Investment ZCCM-IH took was on account of deteriorating social and economic situation caused by mismanagement of KCM by Vedanta. If left unchecked, it would have spelt catastrophe for the residents of Chililabombwe and Chingola and the entire Copperbelt,” said Musukwa.

“Government also has a duty to safeguard its citizens and the actions were taken in that context. The ultimate aim of ZCCM-IH instituting the liquidation process was to secure an investor who would develop the mine to its full potential guaranteeing the much-needed jobs and business opportunities on the Copperbelt in particular, Chingola, Chililabombwe and other peripheral areas.”
Investee Company News

ZCCM -IH: Konkola Copper Mines Plc Further Cautionary Announcement

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company”) are referred to the announcement dated Wednesday 23rd May 2019, in which they were advised that ZCCM-IH filed a petition in the High Court of Zambia for the winding up of Konkola Copper Mines Plc on 21st May 2019. ZCCM-IH filed the said petition pursuant to section 56 (1) (c) of the Corporate Insolvency Act No. 9 of 2017. By Order of the Court, Mr. Milingo Lungu of Lungu Simwanza & Company was appointed as provisional liquidator.

On 3 July 2019, Vedanta Resources Limited (“Vedanta”) obtained an Order of Court to commence legal proceedings against ZCCM-IH in the High Court of South Africa. By Notice of Motion dated 3 July 2019, Vedanta seeks to stay the liquidation proceedings in Zambia and to have the powers of the liquidator discharged.

ZCCM-IH will provide details of these proceedings in due course.

In the meantime, Shareholders of ZCCM-IH are advised to exercise caution when dealing in securities of the Company until further information is published.

By Order of the Board
Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 15th July 2019
Investee Company News

ZCCM -IH | Konkola Copper Mines Plc Further Cautionary Announcement

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company”) are referred to the announcement dated Wednesday 23rd May 2019, in which they were advised that ZCCM-IH filed a petition in the High Court of Zambia for the winding up of Konkola Copper Mines Plc on 21st May 2019. ZCCM-IH filed the said petition pursuant to section 56 (1) (c) of the Corporate Insolvency Act No. 9 of 2017. By Order of the Court, Mr. Milingo Lungu of Lungu Simwanza & Company was appointed as provisional liquidator.

On 3 July 2019, Vedanta Resources Limited (“Vedanta”) obtained an Order of Court to commence legal proceedings against ZCCM-IH in the High Court of South Africa. By Notice of Motion dated 3 July 2019, Vedanta seeks to stay the liquidation proceedings in Zambia and to have the powers of the liquidator discharged.

ZCCM-IH will provide details of these proceedings in due course.

In the meantime, Shareholders of ZCCM-IH are advised to exercise caution when dealing in securities of the Company until further information is published.

By Order of the Board
Chabby Chabala

Company Secretary

Issued in Lusaka, Zambia on 15th July 2019

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
W | www.sbz.com.zm
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 23 May 2019
Corporate Social Investment, ZCCM-IH News

ZCCM-IH Hands Over Water Borehole to Atlas and Surrounding Villages in Nyimba District

As part of its ongoing ‘Clean Water for Zambia’ Corporate Social Investment (CSI) campaign, ZCCM-IH handed over a water borehole to Atlas Village, in Eastern Province, in Chief Ndake’s area. To date, ZCCM-IH has spent over one million Kwacha on this water initiative, with over 10 water boreholes having been sunk in Sinda, Petauke, Nyimba, Chongwe, Chilanga, Dundumwezi, Mungwi, Lufwanyama, Masaiti, and Ndola over the last 3 years. In the spirit of inclusion, ZCCM-IH Corporate Social Investment (CSI) initiatives go beyond the Corporate Social Responsibility (CSR) norm, by offering support beyond the borders of areas it has assets or interests.

As such, Senior Chief Ndake of the Nsenga people in Nyimba who graced the occasion thanked ZCCM-IH for their efforts, especially considering ZCCM-IH had no investments in the area, and urged the company to continue rendering support to his Chiefdom, and consider investment opportunities in the area.
Investee Company News, ZCCM-IH News

Zambia to pass new law handing greater procurement to local companies

THE Zambian government’s interventionist approach to its mining sector was on display after the country’s mines minister, Richard Musukwa, was quoted by Reuters as having said a law would be passed to improve local procurement.

Musukwa said during a meeting with suppliers, labour unions and other officials on the proposed law that the mining sector imported goods and services worth over $4bn annually but only 10% went to local suppliers.

“This is a mismatch and must not be entertained,” Musukwa was quoted as saying. “Mining investors have been a darling of foreign contractors,” he said, without specifying how much the government wanted miners to procure locally.

Zambia’s comparative advantage is in mining, and the government needs to ensure that the mining industry drives growth in other sectors of the economy, Musukwa added.

Zambia is Africa’s second-largest copper producer, with copper mining accounting for around 70% of foreign currency earnings, said Reuters.

The country is currently embroiled in a legal dispute with Vedanta Resources over ownership of Konkola Copper Mines in which ZCCM-IH, a state-owned company, has a 20.6% stake. It has gone to the courts to wind up the company which it intends to sell to another company.

Whilst Zambia has said its dispute with Vedanta is an isolated incident, it has increasingly voiced its displeasure with the mining sector.

On May 24, Zambia said it may conduct audits at all its mines in order to check for some of the breaches imputed to KCM. Two weeks later, the country’s president, Edgar Lungu, said Zambia would break ties with mining companies that failed to meet its laws.
ZCCM-IH News

ZCCM-IH | Notice of Incorporation of Kabundi Mining Resources Limited

At its Special Board Meeting held on 29 March 2019, the ZCCM Investments Holdings Plc (‘ZCCM-IH’) Board approved the incorporation of a mining operating Company. In line with one of its strategic objectives in mining value creation, ZCCM Investments Holdings Plc (‘ZCCM-IH’) wishes to announce the incorporation of Kabundi Resources Limited (‘KRL’) a wholly owned subsidiary. KRL is located in Chief Muchinda’s area in Serenje District, Central Province. KRL is a mine operating company whose main activities include mining, processing and marketing of manganese and other non-ferrous metals. KRL was registered on 8 May 2019.

The ZCCM-IH Board is confident that KRL will add value to the Company’s current mining portfolio and provide an opportunity for ZCCM-IH to expand its activities in the mining sector.

By Order of the Board
C Chabala
Company Secretary

Issued in Lusaka, Zambia on 28 June 2019

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
W | www.sbz.com.zm
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 28 June 2019
ZCCM-IH News

Local Investors a Must

MINING will for a very long time continue being part of Zambia’s economic development. There is abundant evidence of this right across the country.
What may not be in abundance, however, is information or plans on how best Zambia will manage this resource.
It is heartening though that State enterprises are earnestly taking a keen interest in being direct participants in this activity.
A case in point is the revelation by the Zambia Consolidated Copper Mines-Investments Holding (ZCCM-IH) that it plans to invest US$2.4 million in a manganese plant in Serenje district, Central Province.
According to ZCCM-IH, operations at the mine are set to start in the next two months. The mine has potential to produce about 20,000 tonnes of manganese per annum.
Kabundi Resources Limited, a subsidiary of ZCCM-IH, will oversee the management of the mine, which will create 300 jobs for the local people.
This decision is good news for the country as a whole, the people of Central Province, in general, and Serenje, in particular.
For a long time, the country’s major mining activities were confined to Copperbelt Province. This contributed to a massive rural–urban drift as citizens from various parts of the country flocked to the Copperbelt in search of jobs and business.
But today, mining in Zambia is becoming even more entrenched with a wide range of activities in virtually all of its 10 provinces: copper and cobalt in North-Western Province; manganese in Luapula and Central provinces, gold in Eastern Province, as well as gems and coal in Western and Southern provinces.
Of course, there are a lot more activities than these examples. The bottom line is that the mining activities are spreading.
Notably though, most of these mines are in private hands.
That is why it is heartening that ZCCM-IH, a firm with over 70 percent ownership by Government, is expanding its activities by investing in manganese mining in Serenje.
Zambia needs foreign investors in all sectors of the economy but the best investors should be the local ones, especially those who internalise most of their earnings.
ZCCM-IH is one of such local investors. It should, therefore, be encouraged to make the most of its vantage position to grow the sector for the good of Zambia.
Mining accounts for 12 percent of the country’s gross domestic product and about 70 percent of total export value.
The mining sector is, therefore, Government’s cash cow as well as a major employer with tens of thousands of jobs created directly and indirectly.
Despite the focus having been on copper and emeralds, there has always been this belief that the country also has very good potential for further discoveries.
ZCCM-IH has moved a step ahead by converting potential into reality by ensuring that mining is actualised, and more importantly at a comparatively massive scale.
By beginning operations through Kabundi Resources Limited, its subsidiary, ZCCM–IH has taken care of concerns that minerals are not bringing as much benefit as they should.
This is given that ZCCM-IH intends to diversify its portfolio by venturing into mining and manufacturing.
Zambia is endowed with so much mineral wealth that some of the minerals are now being mined by artisans.
This is what is happening to manganese deposits in Luapula as well as gold deposits in Luano, Central Province, Rufunsa in Lusaka Province and several parts of Eastern Province.
Zambia produces about 700 tonnes of amethyst annually. These precious stones are found in Mapatizya in Kalomo and Mumbwa-Namwala areas.
It is good that ZCCM-IH intends to explore for mineral wealth in Eastern Province besides buying gold from small-scale miners.
ZCCM-IH should not be a mere spectator in this sector, where foreign investors and illegal miners are cashing in.
With ZCCM-IH being proactive, there is hope that the country will benefit more from its mineral endowment.
Zambia should not be in financial challenges amidst plenty of natural and mineral wealth.
We hope that other local institutions or companies will emulate ZCCM-IH by taking stock of other natural resources such as timber, especially the much sought for mukula and fish, which are not benefitting the country sufficiently.
Zambia must have more of its own investors.