sirrodger

Annual Report Summaries, Investee Companies

CNMC Luanshya Copper Mines Plc (CLM) Extract from 2021 Annual Report

For the year ended 31 December 2021, CLM recorded revenue of ZMW 10.17 billion (US$516.69 million), [2020: ZMW6.4 billion (US$345.45 million)] compared to the budget of US$329.40 million for the financial year of 2021. This was due to favourable copper prices for the year. CLM produced a total of 32,369 tonnes of copper cathodes for the year under review compared to copper output of 55,976 tonnes produced in the 2020 financial year. 

For the year ended 31 December 2021, the Company recorded a profit of ZMW2.83 billion (US$143.71 million), [(2020: ZMW7.97 million (US$42.13 million)]. Due to this improved performance and positive equity position, the Company declared an interim dividend of US$40 million with US$8 million payable to ZCCM-IH which went to clear most of the amount due under the Dividend Advance Agreement signed in October 2020. 
Annual Report Summaries, Investee Companies

Kabundi Resources Limited Extract from 2021 Annual Report

For the year ended 31 December 2021, Kabundi Resources Limited (KRL) reported total revenues (royalty charges) of ZMW5.58 million (2020: ZMW0.91 million) with a net loss of ZMW1.95 million (2020: ZMW0.958 million). 

Kabundi Resources Limited (KRL) began washing manganese in September 2020 with a 100tpd wash plant. A total of 8,896 tonnes of manganese was produced during the four months of operations in 2020.

In first quarter of 2021, a second and larger wash plant was constructed with processing capacity of 10,000tpd. Kabundi resources produced and sold 52,443t of manganese yielding ZMW9.45 million of which ZMW3.92 million was paid to ZRA as mineral royalty tax. 

In the period under review, Kabundi made progress with phase 2 and phase 3 of its development which include starting own mining and setting up a ferro-alloy plant respectively. 

During the period under review KRL continued its mining activities on one site namely “Kabundi B” where the first open pit had been established. Total manganese sold for the current year was recorded at 61,339 tonnes (2020: 12,000 tonnes).

During the year under review KRL acquired another mining license in the Ntenge area where mining activities are yet to commence. Going forward in 2022 the Company’s focus will be to undertake its own mining activities on this mining license.

In its 2022 budget the Company plans to acquire additional mining equipment to be able to commence its mining operations at Ntenge. Kabundi paid management fees totalling ZMW31,750 to ZCCM-IH in the period under review. 

There were no dividends declared during the period under review (December 2020: Nil). 
Annual Report Summaries, Investee Companies

Misenge Environmental and Technical Services Limited (METS) Extract from 2021 Annual Report

Misenge Environmental and Technical Services Limited (METS) generated a total of ZMW17.11 million in revenue for the year ended 31st December 2021 (2020: ZMW24.49 million). METS reported a net profit of ZMW2.51 million (2020: ZMW3.12 million). 

During the period under review, METS continued the implementation of its Strategic Turnaround and Marketing Plan. Though the Company remains undercapitalised, METS has maintained profitability over the majority of the 12 months. Management has also made steady efforts to raise capital for equipment and develop non-ZCCM-IH business relationships for the formation of strategic alliances and partnerships in the provision of environmental services. 

There were no dividends declared during the period under review (December 2020: Nil) 
Annual Report Summaries, Investee Companies

Limestone Resources Limited (LRL) Extract from 2021 Annual Report

2021 was the first full calendar year of operations for Limestone Resources Limited (LRL), which only commenced operations on 1 September 2020 after transitioning from Ndola Lime Company Limited (NLC). NLC, remains under liquidation. 

As at December 2021, LRL was yet to be capitalised as ZCCM-IH was still running the process of engaging an equity partner with whom a long-term strategic plan for the Company would be developed. 

The lack of adequate capital posed a challenge and the Company underachieved across all performance metrics as production fell substantially below installed capacity due to reliability issues with the plant and equipment. Total sales revenue for the year was recorded at ZMW119.00 million (2020: ZMW34.76 million). The loss over the same period was ZMW39.78 million (2020: ZMW3.71 million). 

On 17 October 2021, LRL’s only functioning Kiln (VK1) experienced a collapse of its refractory bricks, leading to a halt in quicklime production. Since then, no production has been going on at LRL, pending financial resources for repair and maintenance works. 

ZCCM-IH has prioritized the selection and engagement process of an equity partner and is optimistic of completing the process within the first half of 2022 to ensure full recapitalisation of LRL that will substantially improve operational and financial performance. 

There were no dividends declared during the period under review (December 2020: Nil) 
Annual Report Summaries, Investee Companies

Mopani Copper Mines Plc Extract from 2021 Annual Report

For the year ended 31 December 2021, Mopani Copper Mines (MCM) recorded cumulative net revenue of ZMW17. 263 billion (US$877.38 million) [(2020: ZMW13.54 billion (US$726.61 billion)]. The net profit for the year under review was ZMW76.82 billion (US$3.9 billion) [(2020: ZMW27.57 billion net loss (US$1.48 billion net loss)]. 

During the year under review, MCM produced a total of 87,618 tonnes of copper (2020: 90,050 tonnes). On 30 March 2021, the ZCCM-IH Shareholders approved the ZCCM-IH’s acquisition of the remaining 90% interest in Mopani held by Carlisa Investments Corp (“Carlisa”) for a US$1 consideration and US$1.50 billion in Transaction Debt. 

Post the acquisition, production has increased from a monthly average of 3,412 tonnes during the first three months under Glencore to a monthly average of 8,598 tonnes from April 2021 to December 2021 under ZCCM-IH. MCM continued to meet its target performance in both total production and revenue. Key priority for MCM will be the completion of the expansion projects which are estimated at US$300 million for the Synclinorium shaft (US$100 million), Mindola shaft (US$110 million), Henderson shaft (US$40 million), the new Nkana Concentrator (US$5 million), and the Tailings Storage Facility (US$ 45 million). Mopani, with the help of ZCCM-IH is actively seeking funding options for the completion of the expansion projects. 

The future of the mine relies heavily on completion of the expansion projects, which is expected to increase copper cathode production to 225,000 tonnes by 2025. The Company will also have the capacity to hoist close to 9 million tonnes of copper ore in the long term. 

There were no dividends declared during the period under review (December 2020: Nil). 
Annual Report Summaries, Investee Companies

Lubambe Copper Mine Limited Extract from 2021 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenue of ZMW2.92 billion (US$148.60 million),[2020: ZMW2.15 billion (US$115.15 million)]. Over the same period, the Company recorded a loss of ZMW1.8 billion (US$91.38 million), [(2020: loss of ZMW1.58 billion (US$84.81 million)]. 

Lubambe’s road to recovery was a challenging one during the year as problems of poor ground conditions and high ore dilution persisted. Management was continually pursuing various remedial and corrective actions to address these challenges and has since engaged SRK consulting to undertake a review of the resource and devise favourable mining methods that will enhance recoveries from the ore body. 

During the year, Lubambe was carrying out additional work on the concept of the extension project by reviewing the initial work done and updating the mining method as well as reviewing the possibility of mining under the Lubengele tailings dam in preference to relocating and possibly processing the tailings. 

EMR capital, Lubambe’s majority shareholders begun a process to raise up to US$100 million in fresh capital during the year to improve liquidity and fund preliminary works on the extension project. 
Annual Report Summaries, Investee Companies

Konkola Copper Mines Plc Extract from 2021 Annual Report

KCM’s challenges continued during the year as the fundamental problems surrounding the underdevelopment of the Konkola Deep Mining Project (KDMP) remained unresolved, resulting in the Company relying on third-party copper concentrates to feed its Smelter and therefore low production volumes. 

ZCCM-IH was successfully granted a court order to appoint a provisional Liquidator to have full control over the operations of the mine. A key mandate of the Provisional Liquidator was to source working Capital for sustenance of operations for KCM. The liquidator on behalf of KCM engaged ZCCM- IH as a shareholder to help find and source working capital for sustenance of operations, out of which KCM signed a metal Prepayment Agreement with Trafigura, one of the largest copper traders in the world, where Trafigura was to pay KCM US$100 million upfront, which would be repaid by way of copper deliveries to Trafigura. The transaction was guaranteed by ZCCM-IH. 

KCM’s revenue for the year ended 31 December 2021 was ZMW27.32 billion (US$1.388 billion), [2020: ZMW19.21 billion) (US$1.031 billion)] compared to budget of ZMW18.67 billion (US$948.5 million). The Company recorded a loss of ZMW9.83 billion (US$499.33 million, [2020: ZMW3.595 billion net loss (US$193 million)]. 

There were no dividends declared during the year under review (2020: Nil). 
Annual Report Summaries, Investee Companies

Investrust Bank PLC Extract from 2021 Annual Report 

Over the twelve-month period ended 31 December 2021, the Bank’s financial performance indicated an improvement as compared to the prior period, with year-to-date operational profits of ZMW15.07 million (December 2020: Loss of ZMW57.58 million) The improvement is attributed to the Bank successfully implementing the principal initiatives in its turnaround plan and the ZMW286 million capital injection from ZCCM-IH. 

ZCCM-IH, alongside other key stakeholders in Investrust, have continued to make efforts to fully recapitalise the Bank in order to make it competitive and enable it to play its rightful role in the Zambian financial sector. 

The Bank’s share price on the Lusaka Securities Exchange closed the period under review at ZMW15 (2020: ZMW12). 

There were no dividends declared during the period under review (December 2020: Nil). 
Annual Report Summaries, Investee Companies

Copperbelt Energy Corporation Plc (CEC) Extract from 2021 Annual Report

During the year ended 31 December 2021, CEC reported total revenue of ZMW6.7 billion 

(US$342.52 million), [2020: ZMW6.9 billion (US$370.93 million)] and profit after tax of ZMW1.01 

billion (US$51.25 million), [2020: ZMW104.50 million (US$5.61 million)]. 

The Bulk Supply Agreement between CEC and ZESCO that expired on 31 March 2020 was 

renewed after the year end on 7 April 2022. This delay negatively impacted the business’ margins 

and performance. Nonetheless, CEC proved to be a resilient business and continued to thrive 

and diversify its operations in spite of the challenges faced. 

Further, CEC successfully contested Statutory Instrument (SI) No.57 of 2020 that declared its 

transmission and distribution lines common carrier. This declaration was quashed by the High 

Court but was later replaced by SI No. 24 of 2021. The court did not pronounce itself on the said 

SI, as the new government took the decision to repeal the SI number 24 of 2021, this action has 

fully restored CEC property and commercial rights over its power infrastructure. 

For the year under review, the CEC share price opened at ZMW1.10 per share and closed 

at ZMW1.95. The Company declared and paid a dividend of US$37.375 million with ZCCM-IH 

receiving US$9 million (2020: US$8.2 million). 
Annual Report Summaries, Investee Companies

Maamba Collieries Limited (MCL) Extract from 2020 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of ZMW4,392.69 million (US$ 235,781million) for the period under review [2019: ZMW2,140.07 million (US$160.97 million)] and had profit after tax of ZMW1,466.08 million (US$78.69 million), [(2019: ZMW601.06 million (US$45.12 million)].  

During the period under review, MCL continued to experience liquidity challenges because of late receipts of payments from ZESCO. Due to liquidity constraints, the company was negatively impacted on its ability to undertake repairs and proactive maintenance of the Thermal Power Plant. Consequently, the company shut-down one of its two plants temporary during the period under review. Power production was thus negatively impacted due to lower plant availability. However, MCL recorded higher profits during the year under review because MCL recorded a net tax credit of US$2.31 million compared to net tax expenses of US$45.00 million in 2019.  

However, it is expected that the company will have a positive outlook in the medium to long-term once the issue 

of non-receipt of payments from ZESCO is resolved.  

There were no dividends declared during the year under review (31 Dec 2019: Nil).