For the year ended 31 December 2021, NFCA reported revenue of ZMW 12.13 billion (US$ 620.78 million), [(December 2020: ZMW4,839.00 million (US$259.74 million)] and profit after tax of ZMW 2.35 billion (US$ 120.94 million, [(December 2020: ZMW1,131.22 million (US$60.72 million).
There were no dividends paid during the year ended 31 December 2021 (2020: Nil).
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).
Rembrandt Properties Limited (Rembrandt) is a Special Purpose Vehicle between ZCCM-IH (49%), Urban Brands Asset Management (25.5%) and Sims Capital Ltd (25.5%).
Rembrandt was specifically formed to develop the Leopards Square Hotel, an 80-room hotel. The hotel’s delivery schedule has previously been affected by several factors, among them, the Covid pandemic, a change in the project’s scope, a revised development program, delayed funding disbursement, etc.
The project is now scheduled to open to the public in the second quarter of 2022.
Kansanshi Mining reported copper production of 202,159 tonnes of ore for the year ended 31 December 2021 (2020: 221,487 tonnes). The reduction in copper produced was due to an increased, unplanned maintenance and processing competent mixed and oxide ore mainly from stockpiles. Total gold produced was 128,199 ounces, a reduction from 128,409 ounces in the previous year.
For the year ended 31 December 2021, Kansanshi recorded revenue of ZMW39.57 billion (US$2.01 billion), [(2020: ZMW28.76 billion (US$1.54 billion)], owing to higher metal prices during the period. Net profit over the period was ZMW12.09 billion (US$614.26 million) [(2020: ZMW4,274.67 million (US$229.45 million)]. The increase in profitability was driven by sustained higher copper and gold prices during the year which compensated for the reduction in production volumes.
During the year, the Board of Kansanshi approved the commissioning of the S3 expansion, which involves the setting up of an additional brand-new concentrator to address the challenge of the depleting oxides that have led to a reduction in ore grades and ultimately production volumes as the mine goes deeper and transitions into a predominantly sulphide mine, from an oxide mine. The new concentrator will ensure that the mine has sufficient capacity to process additional sulphide ore to maintain and increase current copper and gold production volumes. The S3 expansion project is expected to be completed in 2024.
Dividends declared and paid during the year ended 31 December 2021 amounted to ZMW3.62 billion (US$ 184 million) , [(2020:ZMW48.65 million (US$2.3 million)].
During the period under review, Chambishi continued to be under care and maintenance due to lack of feedstock for the plant and other Strategic reasons. There were no dividends paid during the year under review (2020: Nil).
For the year ended 31 December 2021, Kariba Minerals Limited (KML) reported total revenues of ZMW26.12 million (2020: ZMW 12.44 million) with a net profit of ZMW1.63 million (2020: ZMW11.19 million net loss).
During the period under review, ZCCM-IH provided an extension on the US$550,000 cash cover for KML’s US$500,000 working capital facility with Investrust Bank Plc. The facility was set to expire during the period under review, and KML requested the extension of the facility for an additional 12 months. The request was made due to continued challenges caused by the adverse effects of the Covid-19 pandemic.
During the year, the Company developed a turnaround plan to transform KML from loss making to profitability. The plan is anchored on establishing a resource estimate and mine plan to increase productivity, implementation of a marketing plan, and value addition and beneficiation to the amethyst.
The projected impact of the implementation of the turnaround plan on mine operations will be an increase in sales revenue which is expected to increase by more than 50% from the Kenneth Kaunda International Airport Retail Shop, Gemstone trading, manufacturing of Amethyst Stone Tops and Gemstone cutting and polishing.
There were no dividends declared during the financial year under review (2020: Nil).
Consolidated Gold Company of Zambia Limited (CGCZ) is a joint venture partnership between
ZCCM-IH (45%) and Karma Mining Services and Rural Development (55%). Incorporated in
the year 2020, this Special Purpose Vehicle is focused on developing a gold processing and
trading hub in Zambia. Phase 1 of the project was commissioned in Rufunsa District where a gold
leaching plant has been constructed. CGCZ provides processing support to artisanal and smallscale
miners in Rufunsa and Mumbwa in exchange for tailings material.
During the year ended 31 December 2021, the Company produced 46.6kg (2020: nil) of gold
which was sold to Zambia Gold Company. Income for the year ended 31 December 2021 was
ZMW44.97 million (2020: ZMW0.61 million). CGCZ recorded a loss for the year of ZMW10.22 million
(2020: 19.16 million).
Following the sale of Chibuluma South Crown Pillar Mine, Chibuluma Mines could not sustain operations with ore from Chifupu Underground Mine alone. Therefore, the Chibuluma Mines Plc Board, resolved to place the operations of Chibuluma Mine Plc under care and maintenance with effect from 1 July 2020. This resulted in the Company getting into a lease agreement with Lian Chao and Yue Ventures Limited (LC&Y) to operate key mining operations for the 2021 financial year.
The lease between Chibuluma and LC&Y was recognised for the period up to 30 June 2021. The investment of the lease was US$ 6.79 million, and the assets disposed of by Chibuluma was US$ 5.00 million. This resulted in a net gain on the lease investment of US$ 1.79 million as charged to the income statement.
Following the resumption of production under LC&Y a total of 1,069 tonnes of payable Copper was sold to Chambishi Copper Smelter by LC&Y. Chibuluma earned income royalty of US$ 0.88 million. For the period under review, the Company recorded a net profit of US$ 1.69 million against a budget loss of US$ 1.13 million due to favourable prices and increased production under the lease agreement.
There were no dividends paid during the year ended 31 December 2021 (2020: Nil).
Zambia Gold Company Limited (ZGC) reported revenue of ZMW68.29 million (2020: ZMW59.7 million) for the year ended 31 Dec 2021. During the period under review, 62.02 Kg of gold was sold to the Bank of Zambia. Net profit recorded for the period was ZMW5.76 million (2020: ZMW32.02 million).
For the period under review, ZGC produced a total of 49.99 kg of gold against a budget of 183.56 kg. This variance was largely due to lower production at the Kasenseli mining project due to equipment unavailability in the first 2 quarters of the year and optimization of the processing lines installed in the financial year.
Further, following a review by the Ministry of Mines and Minerals Development (MoMMD), mining operations at the Kasenseli mine were suspended due to safety concerns among other things. Management at ZGC shall continue to engage MoMMD to resolve this matter in order to resume operations.
ZGC shall continue conducting exploration activities with an estimated resource statement to be completed in 2022.
There were no dividends declared during the period under review (December 2020: Nil)
Mushe Milling Limited (MML) earned a total of ZMW38.15 million in revenue for the year ended 31
December 2021 (2020: ZMW106.46 million). MML recorded a net loss of ZMW48.14 million (2020:
ZMW19.65 million loss).
The Company remained undercapitalised with a negative equity position and current liabilities in
excess of ZMW45 million. Due to its consistent weak financial position, only minimal debt amounts
could be settled by the Company during the period and operations were temporarily halted
due to MML’s inability to purchase its own maize stock. ZCCM-IH intervened by entering into a
maize supply agency agreement with MML in order to revive operations in Q1 of 2021.
There were no dividends declared during the period under review (2020: Nil).