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Annual Report Summaries, Investee Companies

Consolidated Gold Company of Zambia Limited (CGCZ) Extract from 2023 Annual Report

The Consolidated Gold Company of Zambia Limited (CGCZ) represents a collaborative venture between ZCCM-IH, holding a 45% stake, and Karma Mining Services and Rural Development, with a 55% share. Established in 2020, this Special Purpose Vehicle is dedicated to establishing a central hub for gold processing and trading within Zambia.  

During the year ended 31st December 2023, the Company produced 90.6kg (2022: 50.7kg) of gold, the majority of which was sold to Zambia Gold Company. Revenue for the year ended 31st December 2023 was ZMW54.20 million (2022: ZMW 50.81 million). CGCZ recorded a loss for the year of ZMW9.44 million (2022: -ZMW8.76 million)  

Due to ongoing profitability challenges stemming from the company’s inability to control the supply of gold feedstock, the ZCCM-IH Board approved a divestiture from CGCZ. The Share Purchase Agreement and the Deed of Mutual Termination were executed during the year, awaiting the fulfilment of the condition’s precedent specified in the agreement. ZCCM-IH is set to recover its initial investment of US$1.568 million over three years. Karma has already paid an upfront fee of US$679,600. 
Annual Report Summaries, Investee Companies

CNMC Luanshya Copper Mines Plc (CLM) Extract from 2023 Annual Report

The principal activity of the Company continued to be the mining of copper and exploration for other base and precious metals.  

As at 31st December 2023, CLM recorded revenue of ZMW8.5 billion (US$414.51 million) (2022: ZMW7.95 billion (US$467.47 million). The drop in year-on-year revenue was attributable to a reduction in copper production due to the loss of ore from Baluba underground mine which was decommissioned in December 2022. During the period under review, CLM produced a total of 48,904 tonnes of copper compared to copper output of 53,952 tonnes produced in 2022.  

Key developments:  

CNMC Luanshya Copper Mines (LCM) is set to revitalize the old Luanshya Mine with a $500 million investment, aiming to create over 3,000 jobs and annually produce 40,000 tonnes of copper concentrate. This initiative comes after the mine was dormant for 22 years due to waterlogging issues. The feasibility study for reopening the mine is underway, with dewatering scheduled to start in April 2024 following the rainy season.  

For the year ended 31st December 2023, the Company recorded a profit of ZMW2.93 billion (US$142.71 million) (2022: ZMW1.68 billion (US$98.71 million). Despite a drop in copper production, strong copper price and cost reduction initiatives led to the increase in profitability in 2023.  

Due to this improved performance and positive equity position, the Company declared dividends of US$30 million with US$6 million paid to ZCCM-IH (2022: US$70 million was declared). 
Annual Report Summaries, Investee Companies

Kariba Minerals Limited (KML) Extract from 2023 Annual Report

Kariba Minerals Ltd, a subsidiary of ZCCM Investments Holdings (ZCCM-IH), is renowned for producing some of the world’s quality amethyst, a semi-precious gemstone. The company primarily exports to China and India among others and during the year under review, KML produced a total of 1,392.52 tonnes of amethyst which comprised of 374.12 tonnes medium and high grade, and 1,018.40 tonnes commercial grade (2022: 1,503.58 tonnes – 327 tonnes medium and high grade, and 1,175.76 tonnes commercial grade.)  

For the year ended 31st December 2023, Kariba Minerals Limited (KML) reported total revenues of ZMW29.87 million (2022: ZMW23.04 million) with a net profit of ZMW0.55 million (2022: net loss of ZMW5.19 million).  

The ZCCM-IH Board approved funding amounting of US$4.077 million for the execution of the Kariba Minerals Limited’s Turnaround Plan. This funding aims to improve the company’s production capabilities, fostering market development and expansion, strengthening the balance sheet, enhancing operational efficiency, and improving its overall financial performance going forward. The overarching objective is to transform the company from loss making to profit making.  

There were no dividends declared during the year (2022: Nil).
Annual Report Summaries, Investee Companies

Limestone Resources Limited (LRL) Extract from 2023 Annual Report

Limestone Resources Limited, formerly known as Ndola Lime Company, is specializing in the production and supply of limestone products. Its diverse product line-up includes quicklime, hydrated lime, and other lime product tailored to meet specific customer needs.  

The transition from Ndola Lime Company to Limestone Resources Limited represents a strategic move to address past challenges and leverage on new opportunities. This change signals an intent to revitalize the business, possibly by attracting new investment, improving operational efficiencies, and better aligning with market demands. Limestone Resources Limited’s journey reflects a commitment to not only continuing its legacy of quality limestone product supply but also enhancing its operational and financial health for future success.  

Limestone Resources Limited has an opportunity to attract fresh capital, revamp the business, and potentially cut the losses experienced by its predecessor, Ndola Limestone.  

During 2023, LRL continued to build up on the knowledge and experience of operating the modified VK2 which was fired in October 2022 after nearly 6 years of being idle. The modification and the prolonged idle time presented initial challenges which took time to resolve. VK 2 was the only operational kiln at the company as no restoration repair works were carried out on VK1, while the Rotary kiln remained mothballed.  

Production from VK2 was an average of 140 tonnes per day against the kiln’s capacity of 500 tonnes per day due to technical limitations on the kiln’s operating mode. Another key stumbling block to attain nameplate capacity was a lack of reliable mining equipment and a frequently malfunctioning crushing plant.  

Revenue for the year was ZMW96.7 million, a notable increase from ZMW26.8 million in 2022. The company made a loss of ZMW180.74 million (2022: ZMW90.81 million).  

There were no dividends declared during the year under review (Dec 2022: Nil) 
Annual Report Summaries, Investee Companies

NFC Africa Mining Plc (NFCA) Extract from 2023 Annual Report

For the year ended 31 December 2023, NFCA reported revenue of ZMW12.8 billion (US$619.82 million), (2022: ZMW9.9 billion (US$548.46 million)). The drop in year-on-year revenues were attributable to lower-than-expected production during the year due to a suspension of operations that occurred in November 2023. During the year under review, NFCA produced a total of 68,757 tonnes of copper compared to copper output of 67,626 tonnes produced in 2022.  

During the period under review, the Company recorded a profit of ZMW1.5 billion (US$76 million) (2022: ZMW1.01 billion (US$56.01 million)). Despite a drop in copper production, strong copper price and cost reduction initiatives led to the increase in profitability in 2023.  

The company currently has a high debt burden and the increase in US Dollar denominated lending rates has significantly increased the company’s interest costs.  

There were no dividends paid during the year ended 31 December 2023 (2022: ZMW51.78 (US$3 million)).  
Annual Report Summaries, Investee Companies

Kansanshi Mining Plc (Kansanshi Extract from 2023 Annual Report

The principal activities of the mine includes mining, prospecting for minerals and processing of ore in Solwezi area of North Western Province. The key notable occurrences in 2023 were:  

 The successful conversion of ZCCM-IH’s dividend right in KMP to a 3.10% Life of Mine Royalty Right. This will ensure that ZCCM-IH’s cashflows are more stable and predictable going forward.  

 KMP implementation of the S3 Expansion project commenced. The S3 Expansion is a significant $1.5 billion investment by First Quantum Minerals aimed at extending the mine’s life into the 2040s, enhancing its production capacity, and generating employment opportunities. It includes expanding the mining pit, upgrading the fleet, and enlarging the processing plant and smelter. This expansion is pivotal for adding value within Zambia and contributes to the nation’s goal of increasing mineral processing locally and aiming to maximize the mine’s output and efficiency, thereby contributing to local economic development and job creation. Completion is anticipated by mid-2025.  

For the year ended 31 December 2023, Kansanshi recorded revenue of ZMW32.30 billion (US$1.57 billion) (2022: ZMW25.98 billion US$1.52 billion). Net profit over the period reduced to ZMW343.83 million (US$16.75 million) from ZMW 2.62 billion (US$153.93 million) in 2022. The geological and hydrological challenges at Kansanshi continued to affect average grades which were at 0.6% in 2023, significantly affecting the amount of copper and gold recovered.  

Royalties received in 2023 were ZMW1,200.19 million (US$56.13 million) and dividends received were ZMW170.74 million (US$9.05 million). 
Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MEL) Extract from 2023 Annual Report

In 2023, significant developments were observed at Maamba Collieries Ltd (MCL), particularly around the Maamba Power Station and its coal mining operations. MCL operates a modern Coal Handling and Processing Plant (CHPP) that facilitates the production of different coal products with consistent quality. Since its privatization in 2010, MCL has made significant improvements in managing coal dumps to mitigate air pollution caused by spontaneous combustion in the overburden dumps. These efforts in environmental management have been recognized through awards from the Zambia Environmental Management Agency (ZEMA) .  

Maamba Collieries Limited (MCL) reported total revenue of ZMW5.00 billion (US$243.69 million) for the year ended 31 December 2023 (2022: ZMW4.75 billion (US$278.68 million)) and had a profit after tax of ZMW2.57 billion (US$125.04 million) (2022: profit of ZMW1.53 billion (US$89.95 million).  

In 2022, ZESCO, Zambia’s state power utility, reached a settlement in international arbitration with Maamba Collieries Ltd to pay $518 million by August 2024 to settle outstanding arrears for power supplied. This settlement follows arbitration in London where both parties agreed on the terms for resolving the debt. According to the agreement, ZESCO will discharge the arrears in tranches by August 2023, after adjusting for a cash discount of $60 million extended by Maamba. The settlement was reached amicably to address overdue power purchase bills while ensuring that monthly payments for power sales from May 2022 are fully paid to Maamba. As at the year ended 31 December 2023 the outstanding debt from ZESCO to Maamba was USD323.18 million (2022:US$539.93 million).  

The Maamba Power Station, fuelled by low-grade coal from MCL’s Maamba mine, plays a crucial role in Zambia’s energy sector. Currently, the station has two operating units, each with a capacity of 150 MW, commissioned in 2016. There is potential for expansion, with plans to add two more units, each also with a capacity of 150 MW, to meet the growing electricity demand in the country. This expansion, projected to cost around US$400 million, would potentially double the station’s output to 600 MW.  

Maamba Collieries has also explored the possibility of increasing the power station’s capacity to 600 MW to support Zambia’s ambition to become an electricity hub in the region. A technical feasibility study for the expansion was completed, and MCL is seeking third party funding for the project. These developments indicate MCL’s commitment to enhancing energy production capabilities in Zambia, contributing significantly to the national grid and supporting sustainable energy security in the region.  

During the year, Maamba undertook semi-annual maintenance on unit 1 of the 150 MW thermal power units between 4th August 2023 to 17th August 2023. Unit 2 underwent semi-annual maintenance between 25th March 2023 and 7th April 2023 as well as forced shut  
Annual Report Summaries, Investee Companies

Mopani Copper Mines Plc Extract from 2023 Annual Report

For the year ended 31st December 2023, Mopani Copper Mines (MCM) recorded cumulative net revenue of ZMW11.55 billion (US$562.87 million), (2022: ZMW11.85 billion (US$695.25 million)). The net loss for the year under review was ZMW8.96 billion (US$435.29 million) (2022: ZMW5.05 billion (US$292.55 million)).  

During the year under review, MCM produced a total of 65,602 tonnes of finished copper (2022: 72,694 tonnes). The lower production during the year under review was mainly due to low equipment availability, and limited ore sources to mine due to delayed development. In addition, there were multiple outages of the fixed plants across all shafts.  

After the year ended 31 December 2023, ZCCM-IH achieved a significant development on Mopani involving a new partnership and an investment that marks a transformative chapter for Zambia’s mining sector and its economy at large. Zambia selected the United Arab Emirates’ International Resources Holdings (IRH), a unit linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC), as the new strategic equity partner for Mopani Copper Mines. This partnership is aimed at investing funds into Mopani to help with short-term working capital and finance the completion of the mine development to unlock its long-term potential. Additionally, this move is expected to restructure the Mopani’s balance sheet and increase copper production to at least 200,000 metric tons per annum in future.  

In 2024, ZCCM-IH has a 49% equity stake in Mopani Copper Mine, with IRH through its subsidiary Delta Mining Limited (Delta) holding a 51% equity stake after an initial investment of US$1.1 billion was made. This agreement included financing MCM’s Project Development Plan (PDP) by providing working capital and restructuring certain existing Glencore liabilities. A new Board of Directors reflecting the revised shareholding structure has been established, and further capital has been made available as shareholder loans based on future working capital requirements.  

There were no dividends declared during the period under review (December 2022: Nil)
Annual Report Summaries, Investee Companies

Copperbelt Energy Corporation Plc (CEC) Extract from 2023 Annual Report

Copperbelt Energy Corporation PLC (the “Company”) is incorporated in Zambia under the Zambia Companies Act as a public limited Company and listed on the LuSE. The Company and its subsidiaries (together “the Group”) is involved in power generation, transmission, distribution, supply, and professional football through its Club subsidiary.  

Key milestones noted during the year:  

 CEC commissioned the 34 MW Solar PV plant at our Riverside location in Kitwe and commenced with the evacuation of power into the grid. In addition, CEC commenced the implementation of the 60MW Solar PV plant located at Itimpi in Kitwe. All this is in line with the green growth agenda and comes alongside technological improvements to the transmission network. The combined capital investment made for the Riverside and Itimpi Solar plants was US$75 million.  

 Copperbelt Energy Corporation (CEC) has also initiated Zambia’s first green bond program to raise $200 million on the LuSE for further investment in solar and other renewable energy generation projects. Through the Green Bond, CEC’s subsidiary, CEC Renewables raised US$454 million in the oversubscribed first tranche of the bond program, and this expected to anchor CEC’s green energy generation ambitions.  

For the year under review, CEC reported total revenue of ZMW7.85 billion (US$382.27million), (2022: ZMW6.38 billion (US$374.449 million)) and profit after tax of ZMW2.83 billion (US$137.65 million), (2022: ZMW866.41 billion (US$50.82 million)). Further, the CEC share price opened at ZMW3.78 per share and closed at ZMW7.09.  

The Company declared a dividend of US$ 55.25 million with ZCCM-IH receiving US$14.59 million (2022:US$10.3 million).