Investment house, ZCCM IH, has announced that it has secured a US$ 10 million facility that will assisting Konkola Copper Mines from local bank, ZANACO Bank Plc, according to a statement issued to shareholders.
“The Board wishes to inform the shareholders and the market that ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company”), has agreed to provide a Corporate Guarnatee to Zambia National Commercial Bank Plc (“Zanaco”) for the amount of USD10 million (the “Transaction”)”, read the statement published on SENS and issued by Company Secretary Chabby Chabala on 25th January 2022.
The reason for securing the facility is to assist the mining company with much needed working capital. “The support of ZCCM-IH to the operations of KCM is quite critical at this juncture. KCM needs working capital urgently in order to procure concentrates from Trafigura to sustain its metallurgical and production operations”.
The two-fold facility is comprised of a Letter of Credit (LC) valued at US$ 8 million and an Overdraft facility of US$ 2 million. “A USD 8 million Standby Letter of Credit (“SBLC”) by Zanaco Plc in favour of Trafigura, the suppliers of copper concentrates to KCM and buyers of the finished copper” and “A USD 2 million overdraft facility”.
Government has backed the transaction by issuing an instrument that provides guarantee for the facility on behalf of ZCCM IH. “Promissory note issued in favour of ZCCM-IH by Ministry of Finance for the amount of the Corporate Guarantee.”
The provision of USD 10 million Corporate Guarantee to Zanaco Plc is valid until 31st December 2022.