CEC proposes demerger of CEC Africa from the CEC Group

INTRODUCTION


In compliance with the Listings Requirements of the Lusaka Securities Exchange (“LuSE”), shareholders are advised that on 28 October 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC Plc” or the “CEC Group”) has proposed, subject to shareholder approval and lender consent the restructuring of the CEC Group by means of a distribution, via a dividend in specie, of ordinary shares in CEC Africa Investments Limited (“CEC Africa”) to shareholders of CEC Plc in the ratio of one (1) ordinary share in CEC Africa for every CEC Plc share held on the “Proposed Demerger”), being the record date of the Proposed Demerger (“Proposed Demerger Record Date”).

BACKGROUND AND RATIONALE FOR THE PROPOSED DEMERGER


In 2013, CEC Plc established CEC Africa as an investment platform through which it could channel its investments in the power sector across Sub-Saharan Africa. CEC Africa was capitalized with USD100 million, being seed capital for its operations, and received a further injection of circa USD50 million through shareholder loans. The original strategy for CEC Africa was for it to be an investment platform through which investors could access power infrastructure assets that were well diversified by region and technology.

In 2016, various factors have adversely affected the value of CEC Africa, including but not
limited to:

  • Low power generation in Nigeria compared to Multi Year Tariff Order forecast;
  • Liquidity challenges facing the Nigerian energy sector;
  • The effect of the depreciation of the Naira on CEC Africa’s USD debt obligations; and
  • Limited enforcement of the Nigerian power sector regulatory regime due to various factors.

These and other general matters have significantly impacted the fair value of CEC Plc’s investment in CEC Africa…

 


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ZCCM-IH | Cautionary Announcement

The Management of ZCCM Investment Holdings PLC (ZCCM-IH) wishes to advise the Company’s Shareholders that the issuance of the audited Annual Financial Statements for the year ended 31st March, 2016 has been delayed due to the following reason:-

– ZCCM-IH experienced delays in information collection from a number of investee companies within the ZCCM-IH portfolio. The information is required for consolidation of the financial statements.

The required information has now been obtained and the Company is in the process of finalizing the audit of the said Financial Statements. This is targeted to be done by 31 October 2016.

Arising from this delay, the Company has prepared provisional annual financial statements for the year ended 31 March 2016 as required by the LuSE Listing Rules. However, the issuance of the provisional financial statements awaits Board approval once a quorate Board is appointed. The Company expects that the appointment of new Directors will be done by 30th September 2016.

Accordingly, shareholders are advised to exercise caution when dealing in ZCCM-IH securities until the full year results are published.

C Chabala
Company Secretary
Issued in Lusaka, Zambia on 15 September 2016

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
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Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 15 September 2016

ZCCM-IH | Notice of change of Directorate

In compliance with the requirements of the Listing Rules of the Lusaka Securities Exchange, ZCCM Investments Holdings Plc (ZCCM-IH) announces a change in its Board membership.

The Company, on behalf of its majority shareholder, the Industrial Development Corporation Limited, wishes to announce that the membership of the following Directors expired from the ZCCM-IH Board with effect from 27 July 2016:

Mr C K Mwananshiku – Non Executive Director
Ms S M Mutemba – Non Executive Director
Dr B K Ng’andu – Non Executive Director
Mr P M Chanda – Non Executive Director
Mrs P C Kabamba – Non Executive Director

 
The Company thanks the named Directors for the service rendered to ZCCM-IH and wishes them the best in their future endeavours.

The new directors are expected to be appointed on or before 31 August 2016.

Company announcement issued by

Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 18 August 2016


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ZCCM-IH launches its “Clean Water for Zambia” Corporate Social Responsibility Project

“Chingobe Village receives borehole for the first time since 1964”

The ZCCM Investments Holdings Plc (ZCCM-IH) in this financial year (2016-2017) has planned to undertake a project dubbed “Clean Water for Zambia”, where it will focus on sinking 10 boreholes, as its core sustainable social investment.

borehole and treadle pumps launch

This project was officially launched on Friday, 05 August 2016, in Chingobe Village, situated 60 kilometers from Sinda District Boma. The village with over 240 residents, and surrounded by 3 other villages, has had no access to clean water since 1964. Women and children, have been going to fetch for clean water from as early as 04:00 hours in the morning, from a hand dug well situated 3 kilometers away. The residents have also been using a nearby well, which was also hand dug, however, the water has not been fit for human consumption.

Headman Chingobe for the village stated that waterborne diseases have been recurrent amongst his people, and that the new borehole, will certainly help reduce cases of these diseases.

Speaking during the launch and handover ceremony of the borehole, ZCCM-IH Chief Executive Officer, Dr. Pius Kasolo said that this project is one way of ZCCM-IH ploughing back to society by sinking a number of boreholes in remote areas of the country with little or no access to clean and safe water such as Chingobe Village. “Chingobe Village is the first to receive this borehole, and we will spread the remaining 9 boreholes to other parts of the country”, said Dr. Kasolo.

He further reiterated that ZCCM-IH coupled with the “Clean Water for Zambia” project will help transform society’s livelihoods by encouraging horticulture farming at small scale by providing irrigation treadle pumps in areas where boreholes will be sunk. Families already into this enterprise with be given a boost, instead of using buckets for watering, they will use treadle pumps which will help increase their productivity. In executing this project, ZCCM-IH is working with NGOs who are currently on the ground working with various horticultural communities. These NGOs are Kickstart (Zambia) (the makers and promoters of the treadle pumps) and Profit+ (who will offer training to the selected potential farmers).

In this regard, 10 women clubs representing more than 280 horticulture farmers received irrigation treadle pumps. In order to make this project sustainable, Profit+ also received 5 treadle pumps which will be given to five lead farmers, who will help train the 10 clubs. Apart from this, the organization will guide these farmers to grow horticultural products that are on demand on the market such as red onion, which is currently being imported. Profit+ will also help in linking these farmers to off-takers on the market. The farmers thanked ZCCM-IH for the noble gesture, stating that the treadle pumps would go a long way in changing their livelihoods.

Eastern Province Permanent Secretary, Chanda Kasolo expressed gratitude to ZCCM-IH for sinking of a borehole and donating the 25 money maker irrigation treadle pumps. Mr Kasolo said all these efforts would go a long way in changing the lives of communities in a sustainable manner.

Maamba commissioning to end load shedding

THE commissioning of 150 megawatts of the 300MW coal-fired power plant at Maamba Collieries Limited is a milestone in the country’s diversification of energy production.

Like President Lungu said during the commissioning of the 150 megawatts yesterday, Zambia is on course to becoming a net exporter of electricity and energy-related products.

We are delighted that commissioning of the plant in Sinazongwe district represents the diversification of the country’s mix which now includes solar, wind, thermal, coal and many others.

Zambia had for a long time depended heavily on hydro energy but the dry spell in the last few years, especially during the 2014- 2015 rainy season, has taught the country lessons in electricity diversification.

The dry spell had a devastating impact on hydro power. The reduction on water levels in our reservoir translated into reduced energy use because power plants operate for fewer hours.

That is why President Lungu said yesterday that the country’s dependence on hydro-power has consequences when we experience low rains, which has justified the diversification towards other forms of energy.

However, diversification should be attractive to the private sector to make their business profitable.

President Lungu hinted yesterday at Government considering cost-effective tariffs in the power sector.

Zambia has the lowest tariffs in the Southern African Development Community and should the status quo continue, the country will continue experiencing power deficits as power developers will continue to shun the country.

So far, Zambia is on course towards power diversification going by the various efforts being made by the government which has provided a conducive environment, as well as its partners and the private sector.

The Industrial Development Corporation (IDC) is in the process of developing at least 600 MW of solar power to help mitigate the country’s electricity shortage.

This is part of Government’s determination to finding a lasting solution to the power crisis.

The International Finance Corporation (IFC) of the World Bank and IDC Zambia have signed a memorandum of understanding to explore the development of two independent 50MW solar power projects in Zambia through the scaling solar programme.

Zambia Sugar Plc, on the other hand, is pondering expanding thermal power generation capacity from the current 30MW to 50MW.

This is in response to the current power reduction on the national electricity grid caused by low water levels in major hydro stations in Zambia.

The sugar company currently produces 30MW of electricity from sugar factory residues.

Through interventions such as Maamba Collieries, the IDC and Ndola Energy Company Limited, which intends to expand its power generation capacity to over 100MW, Zambia is indeed on course to reducing its dependence on hydro energy.

Credit should go to the Patriotic Front government and President Lungu in particular for ensuring that the country diversifies its sources of power.

Power drives the main economic sectors and it is gratifying that the mining, agricultural and manufacturing sectors will now be supplied with the power they need.

That will undoubtedly increase production, which will in turn improve the country’s forex earning and ultimately spur economic development.

The rationing of power has now been effectively ended.

Source: Zambia Daily Mail

Glencore lifts suspension of output at Zambia copper mine- trade union

Lusaka – Glencore’s Zambian Mopani Copper Mines unit has lifted its suspension of production at an underground mine that followed the death of three miners in an accident, a labour union official said on Saturday.

“The suspension of output across all Mopani Copper Mines operations was lifted at midnight after all employees involved in production were briefed on the importance of following safety rules,” the official from the Mine Workers’ Union of Zambia told Reuters. He declined to be named.

Reuters

Source: News 24 Zambia

Zambia’s mining sector remains conducive for FDI

By Tichaona Kurewa

Harare – The latest assessment of Zambia’s mining sector governance and investment attractiveness shows the Southern African country remains an appealing investment destination owing to its favourable geology, decades of mining history, political stability and low risk of expropriation, high levels of security; and a relatively favourable economic environment, the Mining Investment and Governance Review (MInGov) has shown.

MInGov’s development is led by the World Bank with the assistance of Adam Smith International (ASI) in collaboration with the African Centre for Economic Transformation (ACET), the Natural Resource Governance Institute (NRGI) and the Fraunhofer Institute.

The SADC member state has a long history of mining, which dates back to the colonial era and a large reserves of copper, emeralds and other mineral deposits. It also has a very good potential for further discoveries. Mining sector accounts for 12 percent of Zambia’s gross domestic product (GDP) and 70 percent of the total export value.

The sector is also a significant source of government revenue and formal employment, both directly and indirectly.

Continuing to attract investment in the sector is crucial to the country’s growth since it constitutes 62 percent of foreign direct investment. MInGov findings revealed that Zambia is a conflict-free nation making it more attractive to foreign direct investment.

“The country is an attractive place for investment due to favourable geology, its long history of mining, its political stability, and a relatively favourable economic environment.

Zambia is also safe and secure since the country’s independence in 1964 there has never been a war,” the report shows.

However, the same review also pointed out bottlenecks restraining the mining sector’s growth potential in that country.

“Priority areas for improvement include stability of its mining and fiscal policy; the development of domestic procurement policies; improved budget transparency; and frameworks for improved infrastructure development, particularly energy infrastructure,” it says.

“Integrating the mineral sector into national development planning is a crucial driver for sustainable development in Zambia.”

World Bank Country Manager for Zambia, Ina Ruthenberg, says more can still be done for the country to fully benefit from its mineral resources.

“Zambia is rich in minerals but we haven’t fully managed to convert that wealth for the benefit of the people,” says Ruthenberg.

“We need to know where to improve and what changes to make so we can harness this wealth to benefit not only current, but also future generations of Zambians.”

According to the review, the positive aspects of the Zambian mining sector are overshadowed by a lack of transparency and accountability regarding revenue management, a lack of consistency surrounding fiscal policy, and lack of support for diversifying the economy and leveraging of infrastructure for the general population.

MInGov gives government and regional public organisations access to policy and institutional analyses that affect the sustainable development of the mining sector, including its investment climate, effectiveness of public institutions in developing and monitoring the sector, as well as the costs and benefits to stakeholders.

Investors, mining companies and other companies in the sector benefit from access to country-specific, relevant governance data, policies and practices of governments that affect investment risk and decision-making in the sector.

Mining makes up a substantial part of the economies of many SADC countries and has the potential to deliver significant development benefits when managed in a holistic, sustainable manner. Responsible mining can lift people out of poverty by offering economic opportunity, jobs and training.

It generates tax revenues that governments can spend on services like health education, infrastructure and other social programmes.

The infrastructure can be shared with local communities to supply electricity and water as well as providing a robust road network.

Other SADC countries where mining is predominant include Botswana, Zimbabwe, Namibia and South Africa.

Source: The Southern Times

KCM supports growth for manufacturers of leather products

KONKOLA Copper Mines (KCM) has announced the signing of a Memorandum of Understanding (MoU) with the Copperbelt Leather Industry Cluster to establish the Leather Sector Cottage Industry Clustering and Incubation Project.

The company says the objective of the assistance to the leather association is to facilitate the creation and development of viable cottage industries in the Leather Sector. About 200 Small and Medium Scale Enterprises (SMEs) will also receive training for making leather products like safety shoes and gloves for the mining industry when they build necessary capacity in the future.

The project will target shoe cobblers, shoe makers and the youth who will primarily be identified from the communities where KCM operates.

Commenting on the project, KCM Manager Community Relations Brian Siatubi said: “the signing of the MoU is a significant step in KCM’s plans to help improve the lives of Zambians through economic diversification. The project will contribute to employment generation which is critical to support sustainable livelihoods in the communities.”

Mr Siatubi said KCM would provide the initial capital requirement of one hundred and twenty one thousand kwacha (K121, 000.00) to procure leather-making equipment and machinery required by the Copperbelt Leather Industry Cluster project.

“Our long-term goal is to support the growth of the leather industry so that SMEs can be supplying leather products like safety boots and gloves to the mining sector in the next few years. The support and growth of local industry fits into KCM and Vedanta Resources’ long-term vision to continue mining in Zambia for the next 50 years,” Mr Siatubi said.

Copperbelt Leather Industry Cluster Coordinator Preston Viswamo hailed KCM’s assistance as ‘a major milestone’ in pursuit of the growth of his association.

Commenting on the signing of the MoU, Mr Viswamo said: “it is a milestone because this partnership with KCM will strengthen us in terms of delivering services to the SMEs in the leather sector. The relationship with KCM is going to advance our operations and enable us to grow, especially our members in Chingola. It will allow us to create market linkages for the Chingola cluster with the main one in Kitwe.”

Source: Mwebantu

FQM’s Sentinel leading future copper mining ventures in Zambia

First Quantum Minerals’ new $2.1-billion Sentinel mine in Zambia is the one of the most-ambitious ventures for the country’s mining industry.

This is according to the Zambia Chamber of Mines which states that the Sentinel mine is the single-largest upfront infrastructure investment in Zambia since the Kariba dam.

And by virtue of its technological sophistication; it is a blueprint for the future of mining in Zambia because it shows that it can be economically viable to mine a low-grade copper deposit.

Sentinel mine is located in the town it gave birth to – Kalumbila – and for this reason is often referred to as Kalumbila mine.

The Sentinel mine started operating in September 2015, and is currently producing around 150 000 tpa of copper. It expects to reach full production of up to 300 000 t in 2017; of both concentrate and plated copper.

Owned by First Quantum Minerals (FQM), the mine took five years to build where thousands of contractors were employed and more than 265 000 t of equipment was transported to the site, in 14 500 massive truckloads.

There was no existing power grid, so more than 600 km of power lines had to be constructed, running halfway across the country down to the west of Lusaka.

However, instead of burning the timber, FQM built a sawmill which employs 120 people and uses the wood to make fence poles, furniture and other wood products.

The Sentinel project consumed prodigious quantities of cement, fuel and food; launched many local businesses large and small; created employment and kick-started the creation of an entire local economy where none previously existed.

“Sentinel mine puts Zambia at the forefront of global mining technology,” says John Dean, commercial manager.

“It sets new standards in efficiency, productivity and training, and sets a precedent for future copper-mining ventures in Zambia,” says Dean.

Sentinel mine’s technology

Sentinel mine is a low-grade, open-pit mine – the ore contains only 0.51% of copper.

Yet the mine is anticipated to produce a long-term return on investment because it has been designed from scratch, carries no legacy issues, and uses the most sophisticated mining technology in the world.

Everything is advanced: the big drill rigs allow explosives to be placed at greater depths, the trucks are gigantic, and carry heavier loads. The steel-ball mills are the world’s largest and grind larger quantities of ore.

In addition, the conveyor belts are long and carry more material further, the world’s largest semi-mobile rope shovels scoop out 120 t of ore at a time from the pit and can fill a 250 t truck in under a minute.

“It’s all about speed, efficiency and economies of scale,” says Dean. “The mine would not be viable without this level of technology.”

The technology is expensive – and dangerous – and proper training is required.

For example, the drivers of the heavy haul trucks learn their craft in sophisticated equipment in state-of-the-art simulators which use virtual reality to replicate real-world conditions.

In one simulator session, a driver is learning to drive in heavy rain and muddy terrain.

As the rain beats down on the windscreen and the truck struggles up a hill, the system faithfully records the driver’s movements, offers advice via screen prompts and records his score.

In a room alongside, the rest of the team watch the session in real time on a bank of computer screens.

All drivers have to do simulator training every two years as a refresher course, if they’ve been away from work for more than a month, or if their daily driving reports show too many errors.

“Sentinel is not just about sophisticated technology,” says Dean. “It’s also about operations, maintenance, working practices, employee productivity – and having access to affordable and reliable energy,” he adds.

Energy is an emotive issue at Sentinel. Despite having built nearly 600 km of powerlines, Sentinel has yet to be fully connected to the national grid by electricity supplier Zesco.

The mine is currently running on reduced supply, and needs about 30% more energy to operate at full capacity – especially as most of its sophisticated machinery and equipment uses electric power rather than diesel fuel.

Nevertheless, even at current production levels, Sentinel’s contribution to national output confirms North-Western province’s reputation as the country’s largest copper-producing region.

Its three mines – FQM Sentinel, FQM Kansanshi and Barrick Lumwana – together produce nearly 500 000 tpa of copper, which is about 70% of Zambia’s annual production of 711 000 t.

“Fifteen years ago, there was no mining industry to speak of in North-Western province,” says Dean.

“Today, several billion dollars of investment later, that has changed completely. The province has become the new Copperbelt. Sentinel is the most recent example of that shift,” he concludes.

Source: Mining Review Africa

First Quantum sets new quarterly records for production, sales

JOHANNESBURG (miningweekly.com) – Canadian base metals producer First Quantum Minerals (FQM) set a new quarterly record for copper production and sales of 131 349 t and 132 030 t, respectively, in the three months to June 30, surpassing previous records set in the first quarter of this year.

The company’s Sentinel copper mine, in Zambia, recorded a 53% production increase quarter-on-quarter, which FQM attributed to “steady operational and power supply improvements”.

FQM also recorded its highest quarterly production since the third quarter of 2014 at its 80%-owned Kansanshi Mining’s eponymous copper mine, owing to increased smelter availability and sulphuric acid supply from the mine’s smelter operation.

Meanwhile, the company’s higher sales volume quarter-on-quarter was mostly due to increased production at Sentinel.

The company announced comparative earnings of $38-million and cash flows from continuing operating activities of $304-million for the three months.

Further, FQM has completed two main initiatives in its strategy to survive volatile market conditions and sustained lower commodity prices. Firstly, the company put in place a new $1.82-billion debt facility equally comprising a term loan and a revolving credit facility. This new facility, which has improved the company’s financial covenants and amortisation schedule, matures in December 2019 and replaces the previous $3-billion facility.

Secondly, FQM completed the sale of Kevitsa nickel mine, in Finland, to Swedish mining company Boliden for $712-million in cash, plus restricted cash and working capital adjustments, of which $663-million was received in June this year. The remaining amount is due to be received in the current quarter.

FQM chairperson and CEO Philip Pascall noted that the company would maintain its “strong performance” as its focus on these priorities paid off.

He added that all of the company’s operations had shown cost and efficiency improvements, though he acknowledged that the Kansanshi smelter’s operation had the greatest impact on the company’s performance.

This was because the Kansanshi smelter provided additional acid at very little cost. “The extra acid helps recovery of mixed and high acid-consuming oxide ores. The combination of higher recoveries, negligible acid cost and the lower smelting treatment costs make a significant difference,” Pascall explained.

He also noted that the successful sale of Kevitsa and senior debt facility refinancing further strengthened the company’s financial position, “hence its ability to continue developing the Cobre Panama copper project, in Panama, amid volatile market conditions and sustained lower commodity prices”.

“Going forward, we are making progress with the complex process of arranging project financing for Cobre Panama. We will continue to be alert to any opportunities for further cost savings and improvements in profitability and cash flow,” Pascall concluded.

Source: Mining Weekly