ZCCM Investments Holdings PLC (“ZCCM-IH”) commences legal proceedings against Konkola Copper Mines PLC (“KCM”)

We refer to the ZCCM-IH and Konkola Copper Mines Plc (“KCM”) joint announcement dated 8th April 2013, regarding the signing of an agreement (“Settlement Agreement”) relating to KCM’s settlement of outstanding payments and contingent amounts payable under the Price Participation Agreements that existed prior to April 2013.

Further to the Joint Announcement, and in compliance with the requirements of the Securities Act, Cap 354 of the Laws of Zambia and the General Obligations of Disclosure under the Continuing Obligations of the Listings Rules of the Lusaka Stock Exchange, we wish to advise that on the 6th of June 2016, ZCCM-IH filed a Claim Form with the English High Court to recover outstanding sums in excess of US$100 million due to it from KCM, pursuant to the terms of the Settlement Agreement entered into in 2013.

ZCCM-IH anticipates a judgement from the English High Court in either Quarter 4 of 2016 or early Quarter 1 of 2017.

By Order of the Board
Chabby Chabala
Company Secretary

ZCCM-IH | Director’s Half Year Summary to 30 September 2015

Introduction

In compliance with the requirements of the “Securities Act, Cap 354 of the Laws of Zambia” and the Listing Rules of the Lusaka Stock Exchange, ZCCM Investments Holdings Plc. announces the unaudited results for the six months period ended 30th September 2015.

Financial Performance

The Group achieved a turnover of K208.4 million for the six month period ended 30th September 2015 which was 10% above the turnover of K188.6 million achieved during the six months to 30th September 2014. The increase in Group turnover was mainly as a result of an increase in turnover for Ndola Lime Company by 21% from K96.3 million to K116.5 million for the six months ended 30th September 2015., Dividends earned decreased by 56% to K11.9 million for the period ended 30th September 2015 (September 2014: K27.1 million. However Interest Income increased by 23% to K80 million (September 2014:K65.2 million).

The group recorded exchange gains of K1 316 million (2014: losses K66 million) during the period under review. This was due to the depreciation of the kwacha from K7.6250/$ at the start of April 2015 (April 2014:K6.1555/$) to K12.3815/$ as at the end of September 2015 (September 2014: K6.2705).

Dividends were earned from Kansanshi Mining Plc. (K11.9 million).

Interest earned from placements and fixed deposits amounted to K24.9 million (September 2014: K15.4 million). Other income was K4.8 million (September 2014: K9.9 million).This was mainly composed of Management fees amounting to K4.3 million (September 2014:K3.9 million). The cost of turnover was K156.7 million for the period to 30th September 2015 (September 2014: K129.6 million). The operating profit of K51.7 million was lower than the K59 million achieved during the same period in 2014.

The Group recorded share of losses of Associate Companies of K1 546.7 million (September 2014: Loss: K45.2 million).Overall the performance of the Associate companies was weak during the period. The significant share of losses of Associate companies were recorded from Kansanshi Mining Plc (K871.9 million), Konkola Copper Mine Plc (K546.42 million),Copperbelt Energy (K133.36 million) . The price of copper reduced to US$4,970 per ton as at 30 September 2015 compared to US$6,748 per ton as at 30th September 2014 representing a 26% decrease. As a result, the Group recorded an after tax loss of K696.5 million (September 2014: Loss K55.3 million)…

By Order of the Board

C Chabala
CCSO/Company Secretary
1 December 2015


Download the full Director’s Half Year Summary to 30 September 2015 below:

Director’s Half Year Summary to 30 September 2015

Proposed MRT regime will enhance tax collection, says Chamber of Mines

The new proposed changes to the Mineral Royalty Tax (MRT) regime will enhance the collection of mineral revenue by the government rather than compromise it, Chamber of Mines president Nathan Chishimba said recently. Chishimba was reacting to a media statement issued by a consortium of civil society organisations advising government not to implement the new proposed Mineral Royalty Tax regime on the grounds that it is “investor-led” and will “not maximize revenue in times of commodity price booms”.

Chishimba praised the government for the new proposed MRT regime, saying it recognized the need to balance increased tax revenue with continued employment and investment in new mining ventures. “One cannot separate mining tax revenue from mining investment, because it is the mining investment which ultimately produces the tax revenue,” said Chishimba. “A good tax is one which balances these two competing objectives.” Commenting on the civil society’s statement that “we need to make the most of what we have while we have it”, Chishimba said this short-term thinking was not necessarily good for the Zambian economy.

“The largest amount of tax revenue is always generated over the longer term, and this can only happen if mining companies are incentivized to invest over the longer term.” On the view that the new proposed MRT regime will “not maximize revenue collection in times of commodity price booms”, Chishimba said this reflected a misunderstanding of the role of MRT in the overall tax mix.

“MRT is a tax on production, not profit. It is pegged at a relatively low rate, and is not designed to maximize revenues in times of commodity price booms. Governments collect most of their revenue in times of commodity price booms from profit-based tax, which is much higher.”

Chishimba said the government was on the right track with the proposed MRT regime, and urged civil society to view it in the larger perspective of ongoing investment, employment and economic development.
“One has to balance taking as much as one can now with having a thriving industry into the future, and the government has at last recognized this,” said Chishimba.

Source: Mining News Zambia

Remarks by Dr. Pius C. Kasolo, at the African Development Bank Annual Meetings Welcome Cocktail

Monday, 23 May, 2016
InterContinental Hotel, Lusaka, Zambia

Distinguished invited guests, ladies and gentlemen

It is a great honor and privilege for me to address you on this wonderful occasion, during this historic event for Zambia, as we host the 2016 Annual Meetings of the African Development Bank which started today, under the theme “Energy and Climate Change”.I understand that the theme of this year’s meetings draws on one of the Bank’s “High 5” priority areas, which is, to “Light up and Power Africa”.

Allow me to extend a special welcome to our international delegates.

It is my sincere hope that you will have an opportunity to sample some of the rich Zambian hospitality as you attend these meetings.

Distinguished Ladies and Gentlemen

May I take this opportunity to briefly talk about ZCCM Investments Holdings Plc.

ZCCM-IH is a diversified investments holding company, which is listed on the Lusaka Stock Exchange, Paris Euronext and London Stock Exchanges. The Government of the Republic of Zambia (GRZ) indirectly holds 60.28% of the ZCCM-IH shares through the Industrial Development Corporation Ltd (IDC), and 17.25% of the shares directly through the Ministry of Finance, with the remaining 22.47% of the shares held by Institutions and private investors.

ZCCM-IH currently has an investment portfolio of 15 companies, including some of the biggest mines in Zambia, such as Kansanshi Mining Plc, Mopani Copper Mines Plc and Konkola Copper Mines Plc.  Our shareholdings in the 15 companies range from 10% to 100%, with commodities and services that are diversified in nature; such as copper, gold, cobalt, coal, power, telecommunications, limestone, environmental & technical consultancy, financial services and gemstones.

In our strategic diversification efforts, as a company, we have ventured into the energy sector.

Invited Guests, Ladies And Gentlemen

One of the projects under our investment portfolio is a thermal power plant at Maamba Collieries Limited, in the southern part of the country.

The Maamba thermal power plant Project which will be producing 300MW of power is expected to be completed in July this year. ZCCM-IH owns 35% of Maamba Collieries Limited, and with its partners, have invested close to 850 million United States dollars into this project. Further, as ZCCM-IH we are also looking at investing in other alternative energy sources which would in turn provide substantial benefits for our climate, our health, and our economy.

Distinguished Ladies and Gentlemen

In closing, it is my sincere hope that the outcomes of these meetings, as we debate the social and economic development of the continent in line with the theme, will ultimately contribute towards overcoming the current power deficit at a local, regional and continental level in order to foster economic development.

With these remarks, I wish you fruitful deliberations during the next four days of the Conference.

Thank you for listening and May the Good Lord bless you all.

Stage is set for Zambia Open Golf Championship

With only 10 days to go before the prestigious KCM 2016 Zambia Open tees off, all is set for Konkola Copper Mines (KCM) and the Nchanga Golf Club to host yet another major golf tournament.

The golf championship is scheduled to take place from Tuesday 31st May to Saturday 5th June 2016.

The Golf Championship has attracted over 130 international and local players who include former champions, Scottish Doug McGuigan, who scooped the last KCM Zambia Open staged at Nchanga Golf Club in 2011, the 2008 winner Tyrone Ferreira and Justin Harding the 2012 Champion.

From the local front, Zambia’s most celebrated golfers Madalitso Muthiya and his Ndola-born counterpart Dayne Moore will be leading the pack with the hope of snatching the coveted title.

The Zambia Golf Union (ZGU) has confirmed that 25 sponsors cutting across the telecommunications, banking, insurance, mining and construction sectors have come on board to help raise $480,000 out of $500,000 required to host a successful tournament.

ZGU President Jason Kazilimani has thanked the various partners for their response to the clarion call to support this tournament which is a major event on the Sunshine Tour calendar. He has appealed for more financial support.
Although we are just a few days from the tournament we are still appealing to other partners to come on board because the Nchanga Golf Club requires further financing to make this a memorable event that will not only boost the profile of golf and its development, but will make it a bigger and better event. I encourage Zambian companies to support this noble event.

KCM’s involvement in the Zambia is anchored on its extensive Corporate Social Responsibility (CSR) programme, underpinned on four pillars including sport.

CEO Stephen Din said recently “KCM supports sport because it is an excellent way to develop leadership. We are always looking to develop the next generation of leaders for Zambia and for our business. Golf is one of the sports which helps individuals to keep fit and provides an excellent platform for business interactions”.

First Quantum Minerals in Zambia, Unions agree on pay increases

First Quantum Minerals Ltd. agreed with a trio of unions on pay increases over three years for workers at its copper operations in Zambia.

Wages will rise in increments of 6 percent to 7 percent starting in January 2017 and education allowances will also be increased in stages, the company said in an e-mailed statement from London on Thursday.

Miners in Africa’s second-largest copper-producing country are struggling with higher production costs and lower metal prices, which are cutting into profits and have led companies to announce thousands of job cuts. Facing sluggish economic growth and soaring inflation, the government is under strain to ease public discontent before elections in August.

“Even though our profitability has been hit by falling copper prices and rising operational costs, the company understands the pressure that increasing costs of living place on its employees and their families,” FQM said in the statement.

FQM owns 80 percent of the Kansanshi mine, located about 180 kilometers (112 miles) northwest of the Copperbelt town of Chingola, which has the capacity to produce 340,000 tons of copper and 120,000 ounces of gold every year. Copper output at the mine declined 14 percent to 227,000 tons last year, which together with lower prices for the metal cut gross profit by 70 percent, the company said on Thursday.

Kansanshi, which has a workforce of 2,841, is the largest producer of copper on the continent, FQM said. ZCCM Investments Holdings, the company formed to hold Zambian state’s minority stakes in local copper mines, has the remaining ownership of Kansanshi, according to FQM’s website.

Source: Bloomberg

Stanchart gives ZMW 200,000 sponsorship towards the 2016 KCM Zambia Golf Open

he Standard Chartered Bank has given a sponsorship of ZMW 200,000 towards the KCM 2016 Zambia Golf Open scheduled to take place from 31st May to 4th June at the Nchanga Golf Club in Chingola.

The Bank expressed delight at being part of the prestigious tournament and anticipates that its sponsorship of this international tournament would contribute to its success.

Our support towards the 2016 Zambia Open Golf Tournament demonstrates Standard Chartered Bank’s commitment to sporting activities in Zambia. This sponsorship is also testimony to the high importance we attach to the Copperbelt region as a key business hub. This year we are proud to commemorate 110 years of doing business in Zambia, since we opened our first branch in Kalomo in 1906. We have no doubt that the Zambia Open Organizing Committee (ZOOC) will put on yet another formidable show this year, and we look forward to being part of this unique event.

Andrew Okai, CEO, Standard Chartered Bank Zambia.

And ZGU President Jason Kazilimani says Standard Chartered Bank’s generous donation will ensure a successful tournament that lives up to its reputation of being one of the most prestigious events on the Sunshine Tour calendar.

Mr. Kazilimani expressed gratitude towards the bank noting that it would be impossible to host the tournament without various sponsors coming on board and urged other companies to join Standard Chartered Bank in contributing to the hosting of the event, whose main sponsor is KCM Plc.

Although we are just a couple of weeks from the tournament we are still appealing to other partners to come on board because the Nchanga Golf Club requires further financing to make this a memorable event that will not only boost the profile of golf and its development, but will make it a bigger and better event. Those companies that have pledges should come forward and honour them. I encourage Zambian companies to support this noble event.

Jason Kazilimani, President, Zambia Golf Union

He also thanked Konkola Copper Mines (KCM) for once again accepting to be the major sponsor of this year’s Zambia Open Golf Championship, a major fixture on the Sunshine Tour annual calendar. Mr Kazilimani said that the event would enhance the development of golf in the country.

Chamber of Mines praise Government’s effort to save the Mining industry

The Zambia Chamber of Mines welcomes the changes to the new 2015 Mines and Minerals Development (Amendment) Act which was passed by parliament last Friday.

The Chamber maintains its position that the question of having an equitable fiscal regime that promotes the competitiveness of Zambia’s mining sector is not a zero sum choice between Government on the one hand and the mining industry on the other. Rather, it is one of making appropriate and well thought out choices that will result in a vibrant and competitive Zambian economy that promotes overall growth in the long term for Zambia. Given the pivotal importance of the mining industry in promoting long term diversified economic growth, the mining industry supports the forward thinking policy shift by Government, which will no doubt bear fruit in time to come.

We also note that the Government’s decision marks a significant shift in outlook towards the sector, and it can only be of benefit to the industry and the economy in the longer term.

However, given the intense competition we face as a country from other mining jurisdictions in the world, more needs to be done to ensure long-term competitiveness and renewed investment in the mining sector, which is key to securing growth. We are sure that if the country maintains the same momentum as exhibited by the outlook that resulted in the most recent change to the fiscal regime, this should be achievable in the next few years.

We believe the prevailing low price environment continues to present significant challenges for the mining sector over the short to medium term.

The gesture by the Government is a good lifeline that will provide much needed relief. The simplicity, stability, predictability, and ultimately the attractiveness of Zambia’s minerals fiscal policy environment and taxation regime, is vital to providing the assurances these investments require, especially given that copper mining in Zambia is a high cost business.

For the mining industry, this is critical: the instruments used within a taxation regime, and the rates at which taxes are set, together establish the incentives and disincentives a mining company faces in deciding whether and how much to invest, how many workers to employ, and what ore to extract – which in turn can affect the life-span of the mine.

If Zambia is to attract this needed investment its mining taxation levels, particularly Mineral Royalty Tax, must at the very least lie within global norms. Given Zambia’s specific production conditions, many would argue that an even bolder approach is necessary.

Since 2000, on the back of rising copper demand from China, the Zambian copper mining industry has led the nation’s development, spurring GDP growth and helping to achieve annual growth rates of 7% to 10%. The industry has ploughed more than US$14 billion into new mining ventures and trebled the country’s annual mining output to around 800 000 tonnes. This mining growth has been key in taking government tax revenue from less than half a billion Kwacha in 2000 to a peak of K8 billion ten years later.

“We are the basket which holds all the proverbial eggs. Working together we have to create a high-growth, diversified economy which spreads risk and opportunities across the economy creates more jobs and widens the tax base,” said Mr Nathan Chishimba, President of the Zambia Chamber of Mines.

“As we are seeing in the current crisis, Zambia should not be relying only on mining for its future,”Mr Chishimba said.

We commend the government for this new spirit of dialogue and cooperation, and we look forward to continuing to work together to solve these and future challenges.

Source: Mining News Zambia

Mopani to sink 2km shafts in Kitwe

MOPANI Copper Mines says it will sink two more shafts in excess of 2,000 metres at its Mufulira and Mindola Mines in Kitwe as part of its US$1.1 billion investment earmarked for high profile projects.

President Edgar Lungu last week launched a US$323 million Synclinorium Shaft that is aimed at extending the life of the mine at Nkana beyond the current expected depletion dates of the existing reserves by 25-30 years.

Announcing the projects, Mopani chief executive officer Johan Jansen said the two shafts that would be sunk at Mufuliraand Mindola would be the deepest ever sunk in Zambia and the deepest copper mines on the African continent.

“Investments from our major shareholders Glencore since 2000 stands US$3.04 billion and is one of the single largest private investments in Zambia. A further US$ 1.1 billion investment has been earmarked for a number of other high-profile projects over the coming years,” Jansen said.

He said the shafts would help make operations more efficient and cost effective.

He said like the Synclinorium Shaft, the two would add a further 25-30 years of mining life to Mindola and Mufulira mines.

“What we want is to develop a world class operation that is safe, efficient and cost effective as well through investment and value to our stakeholders,” Jansen said.

He further congratulated Mopani’s major contractor for the Synclinorium Shaft, Murray and Roberts, for delivery of a world-class project.

Jansen said through such huge projects, the company would continue to significantly contribute to the government treasury for many years, amongst many other benefits.

Further, Jansen said Mopani wanted to realise its vision to be a profitable, sustainable and world-class copper producer by 2023.

Source: The Post Zambia

ZCCM-IH announces plans for an ambitious diversification programme

ZCCM Investment Holdings PLC (ZCCM-IH) says it has embarked on an ambitious diversification programme which will see its interests extended to the manufacturing, power generation, agriculture and real estate sectors.

ZCCM-IH Chief Executive Officer, Dr. Pius Kasolo told delegates to the 2016 Investing in African Mining Indaba in Cape Town yesterday that the diversification programme as part of rebranding from a mining company which the institution has continued to be associated with.

Speaking when he made a presentation entitled ‘Diversifying the Investment Portfolio’, Dr. Kasolo said the programme has advanced with work on establishing Zambia’s biggest cement manufacturing company already started.

Dr. Kasolo said financing for the 5, 000 tonnes-per day-cement company which will be established at Ndola Lime Company Limited, has already been secured. The plant will be self-sufficient in electricity as it will have a 52 megawatt power plant constructed alongside the main project.

He said the cement company will utilise about 22 megawatts of the electricity generated while the excess will be sold.

Dr. Kasolo said that apart from helping to bring down the price of cement, the plan was also to cushion the suffering of mine employees on the Copperbelt who recently lost their jobs through retrenchment.

“The main task I was given at my appointment was to industrialise Zambia and I can assure you that we have started and we are well on course. It should be acknowledged that the lower the price of cement is, the more development you trigger because everyone including private citizens will be involved in construction,” Dr. Kasolo said.

He said, to leverage on the power deficit, ZCCM- IH has diversified into thermal power generation through Maamba Collieries Limited, in which it held 35% shareholding.

It currently has shareholding portfolio in 16 companies, including biggest mines such as Kansanshi mining plc, Mopani copper mines and Konkola copper mines.

ZCCM-IH, with its partners has invested close to $850 million at Maamba Collieries Ltd, to construct a thermal power plant which will produce 300MW of power by mid-2016 and 600MW once completed.

ZCCM IH has about, 2000Hetares of land in Lufwanyama with a water frontage on the Copperbelt Province, which has great potential for farming high yielding crops such as soyabeans, oilseeds and maize or livestock (cows and pigs) and fisheries (aquaculture).

“When privatisation occurred assets were issued to residents and companies as a form of payment. Certain assets were forgotten, and upon discovering that we have a number of properties, we decided to capitalise on them, upgrading and renting them out.”

Separately, Dr. Kasolo earlier disclosed that ZCCM-IH had partnered with locals in Luapula Province to explore for manganese. The project has already been funded and would soon start mining operations.

He said ZCCM-IH had a community gold mining project in North-western Province in which they had partnered with Chief Kasempa and with Chief Ingwe community in the Katoka Mema Gold Mining project.

Dr. Kasolo is part of the Zambian delegation led by Minister of Mines and Minerals Development, Mr. Christopher Yaluma, at the world’s biggest mining conference which is underway in Cape Town until 11th February, 2016.

Others are Deputy Minister of Mines and Mineral Resources, Mr. Richard Musukwa; Deputy Minister of Finance, Mr. Christopher Mvunga and Zambia’s High Commissioner to South Africa His Excellency Mr. Emmanuel Mwamba.

Mr. Mwamba stated that Zambia would present a strong and emphatic case to underline the fact that the country remained one of the most suitable, strong, and stable investment destinations in the world.
He pointed out that the Mining Indaba presented a perfect opportunity to market Zambia to the rest of the World.

He explained that Mr. Yaluma and his team had a busy week during which they will make presentations and speak at various highly strategic panel discussions.

Mr. Yaluma started with speaking at the 4th Annual Ministerial Symposium on Sunday; on 9th February, the Minister will attend the World Bank-organised Special Information Session dubbed Good Governance is Good Business while on 10th February, Mr Yaluma will lead a high-powered group that will team-up to make a country case study presentation on Zambia. Others in the team are Mr. Mvunga; Vedanta Resources Plc Chief Executive Officer, Mr. Tom Albanese; Dr. Kasolo; Gemfields Chief Executive Officer, and Mr. Ian Harebottle.

Mr. Yaluma has also held side meetings with various potential investors and interviews with both local and international media during which he laid out challenges and solutions being pursued by Government in the mining sector.

The conference has attracted speakers from all over the world that include Ministers of Mines, representatives from mine houses, the International Monetary Fund, the World Bank, Africa Development Bank and others.

Source: LusakaTimes