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Annual Report Summaries, Investee Companies

Kansanshi Mining Plc (Kansanshi) Extract from 2022 Annual Report

2022 was an operationally challenging year for Kansanshi on two main fronts, geology and hydrology. As the mine has gone deeper and the oxides are depleted, grades have deteriorated from an average of 1.0% in 2021 to 0.6% through 2022. This has significantly affected recoveries of both copper and gold. Similarly, mining at depth has increased water levels in the pit at a faster than anticipated rate, which also slowed down production. The challenges above resulted in substantial production declines. Copper produced was 146,282 tonnes, a sharp drop from 202,159 tonnes in 2021. Similarly, gold for the year was 109,617 ounces, declining from 128,199 ounces in 2021.  

For the year ended 31 December 2022, Kansanshi recorded revenue of ZMW25.98 billion (US$1.52 billion)(2021: ZMW39.57 billion (US$2.01 billion)). Net profit over the period also substantially reduced to ZMW2.62 billion (US$153.93 million) from ZMW12.09 billion (US$614.26 million) in 2021.  

The S3 expansion, which involves the setting up of an additional brand-new concentrator to address the challenge of the depleting oxides that have led to a reduction in ore grades and ultimately production volumes as the mine goes deeper and transitions into a predominantly sulphide mine from an oxide mine is scheduled to commence in 2023. The new concentrator will ensure that the mine has sufficient capacity to process additional lower grade ore to produce desired copper and gold production volumes.  

On 1st December 2022, ZCCM-IH and First Quantum Minerals reached an agreement where some of ZCCM-IH’s dividend rights would be converted to a 3.1% gross revenue life of mine royalty. The transaction is subject to the fulfilment of several conditions, including shareholder approval. It is expected to be completed in the first quarter of 2023.  

Dividends declared and paid during the year ended 31 December 2022 amounted to US$1.27 billion (2021: US$184 million).  

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