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Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MCL) Extract from 2021 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW3.96 billion (US$201.71 million) for 

the year ended 31 December 2021 [(2020: ZMW4.39 billion (US$235.78 million)) and had a profit 

after tax of ZMW222.03 million (US$11.28 million) [(2021: ZMW11.47 billion (2021: US$78.69 million)]. 

Subsequent to year end, MCL continued to experience liquidity challenges because of delayed 

payments from ZESCO which stood at ZMW 10.97billion (US$ 606.79 million) as 31st December 2022. 

The Company undertook semi-annual maintenance shut down and forced shut down of unit 1 

of the 150 MW thermal power units between 25 May 2022 and 7 June 2022. Nevertheless, plant 

availability was more than 85% for each of the first nine months of FY2022-2023.The Company has 

a positive outlook in the medium to long term after the Arbitral Tribunal issued the Consent Award 

to MCL on 13 December 2022, which will see ZESCO pay US$447 million to MCL by 31 August 2023. 

Arbitration Proceedings against ZESCO. 

The Arbitral Tribunal issued the Consent Award on 13th December 2022. Through the settlement, 

MCL and ZESCO have agreed to irrevocably withdraw all their respective claims brought in the 

arbitration. The settlement has been recorded in the form of an enforceable final consent award 

signed and issued by the Arbitral Tribunal on 14th December 2022. The issuance of the final 

consent award ended the arbitration. The Consent Arbitral Award has since been registered in 

the High Court of Zambia for any further course of action that the claimants could pursue 

The Consent Award provides that from the total unpaid arrears under the PPA and TA as at 

31st October 2022 of US$578.06 million, ZESCO will pay to MCL the Agreed Settlement Amount 

of US$447.56 million after MCL agreed to give ZESCO a discount of US$60 million on the interest 

portion of the arrears and ZESCO agreed to take on the responsibility of the VAT due on the total 

arrears amounting to US$70.5 million. 

Details of the Settlement as per Arbitration 

(i) As part of the Settlement ZESCO will pay 50 percent of the Agreed Settlement Amount being 

US$ 223.78 million as follows: 

a. US$10 million to be paid no later than 29th December, 2022; 

b. US$20 million to be paid by 31st March, 2023; and 

c. the remainder by 30th April, 2023. 

(ii) ZESCO shall pay the remaining balance of the Agreed Settlement Amount no later than 31st 

August 2023. 

(iii) In addition, ZESCO shall continue to pay an additional US$ 750,000 every month towards 

liquidating the Agreed Settlement Amount. 

(iv) Should ZESCO default on any of these payment terms, the entire amount outstanding 

at the time of default will become payable to MCL immediately. 

(v) ZESCO will indemnify MCL on demand for any liability on the VAT and any penalties and 

interest that may be paid by MCL in respect of the VAT. 

ZESCO has, in the meantime, discharged a few payments as per the terms of the Award, 

leaving a balance amount of US$414.56 Million to be paid under the Award, as of 31 

March 2023. 

There were no dividends declared during the year under review (2021: Nil). 

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