Annual Report Summaries

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).  
Annual Report Summaries, Investee Companies

Mushe Milling Company Limited Extract from 2020 Annual Report

In September 2019, ZCCM-IH Plc and Multi Invectec Solutions (“Multi Invectec”) executed a Share Purchase Agreement (“SPA”) which saw ZCCM-IH acquire 100% shareholding in Mushe Milling Limited. Mushe Milling Limited (MML) earned a total of ZMW 107.46 million in revenue for the year ended 31st December 2020 (31 December 2019: ZMW36.69 million). MMCL recorded a net loss of ZMW36.58 million (31 December 2019: ZMW12.63 million loss).  
Annual Report Summaries, Investee Companies

Chibuluma Mines Plc Extract from 2020 Annual Report

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, Metorex Executive Committee and Jinchuan Group Limited, jointly resolved to place the operations of Chibuluma Mine Plc under care and maintenance with effect from 1 July 2020. All Chibuluma Mine employees were consequently declared redundant with only a few re-employed on short-term contracts for the care and maintenance period.  

In September 2020, in order to assess the viability of re-opening Chifupu Mine, Chibuluma Mines engaged Integrated Geological Solutions of South Africa (IGS) to conduct an evaluation of the Chifupu Mine resources and reserves.  

This indicated that the current resources amount to 3,118,000 tonnes of Copper Ore, with an average Grade of 2%, containing 65,478 tonnes of Copper metal. And recoverable reserves of 1.346 million tonnes of Copper Ore, with an average grade of 1.83%, containing 24,592 tonnes of Copper metal. Subsequently, Chibuluma Mines in conjunction with Metorex (Pty) Limited engaged the services of Ernest and Young (EY) to conduct a valuation of Chibuluma Mines Plc including the reserves at Chifupu Mine and the assets at the processing plant.  

The EY valuation report indicated that based on current mining costs and current (forecast) Copper prices, re-opening Chifupu Mine operations would result in an overall loss of USD 28 million over the 5-year period to 2025.  

No dividends were paid for the financial year ended 31st December 2020 (December 2019: nil).  
Annual Report Summaries, Investee Companies

Lubambe Copper Mine Limited Extract from 2020 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenue of ZMW2,145.18 million (US$115.15 million) for the year ended 31 December 2020 [December 2019: ZMW997.12 million (US$ 74.85 million)]. The loss for the year was at ZMW1,580.03 million (US$84.81 million) US$28.34 million [2019: ZMW871.68 million (US$65.44 million)]  

During the year under review, ZCCM-IH continued to engage with Morgan Stanley regarding EMR’s intention to offer some equity to new partners. The ZCCM-IH Board approved Lubambe’s additional US$25 million loan from Trafigura, bringing Lubambe’s total indebtedness to $75 million.  

Dividends declared and paid during the year amounted to nil (December 2019: nil).
Annual Report Summaries, Investee Companies

Kariba Minerals Limited (KLM) Extract from 2020 Annual Report

For the period under review, Kariba Minerals Limited (Kariba) reported total revenues of ZMW12.44 million (2019: ZMW4.18 million) with a net loss of ZMW11.19 million (2019: ZMW48.64 million profit).  

During the period under review, ZCCM-IH provided an extension on the USD550,000 cash cover for Kariba’s USD500,000 working capital facility with Investrust Bank Plc. The facility was set to expire during the period under review, and KML requested for the extension of the facility for an additional 12 months. This was requested due to challenges the business faced during the financial year caused by the adverse effects of the Covid-19 pandemic and the suspension of exports for a prolonged period.  

There were no dividends declared during the year under review (December 2019: Nil).  
Annual Report Summaries, Investee Companies

Copperbelt Energy Corporation Plc (CEC) Extract from 2020 Annual Report

The Bulk Supply Agreement between CEC and ZESCO expired on 31st March 2020. A new agreement was not signed as the two parties could not agree on terms and conditions that were acceptable to both. This is likely to impact CEC negatively especially when it comes to planning for CAPEX.  

ZCCM-IH is monitoring the impact of the new Energy Regulation Board (ERB) and Electricity Acts are going to have on the operations of CEC with the key one being the increased powers granted to the ERB and the government to have more oversight in important dynamics such as tariff rates and Power Purchase Agreements (PPA’s) with end users including the mines.  

During the year under review CEC reported total revenue of ZMW6,910.59 million (US$370.93 million), [ 2019: ZMW4,101.92 million (US$307.93 million)] and profit after tax of ZMW104.5 million (US$5.61 million), [December 2019: ZMW26.90 million (US$2.02 million) loss]. 

During the year, the CEC share price opened at ZMW 1.25 per share closing at ZMW 1.10.  

Dividends declared and paid during the year amounted to ZMW164.9 million (US$8.2 million) (December 2019: nil).  
Annual Report Summaries, Investee Companies

Zambia Gold Company Limited (ZGC) Extract from 2020 Annual Report

Zambia Gold Company (ZGC) commenced operations in the year 2020 and reported revenue of ZMW59.70 million for the period ended 31 December 2020. The revenue was generated from the first sale of 47.96Kg of gold to the Bank of Zambia. The net profit recorded for the year was ZMW32.02 million. Since production commenced in July 2020, ZGC has been conducting exploration activities to determine the available resource. ZGC continued with the second phase of hiring key staff including a Procurement Officer, Company Accountant, Metallurgist and Technical Officer, as well as establishing a corporate office in Lusaka. No dividend was declared or paid during the year.  
Annual Report Summaries, Investee Companies

CNMC Luanshya Copper Mines Plc (CLM) Extract from 2020 Annual Report

CLM increased its production volumes in 2020 with total copper output of 55,976 tonnes, up from 55,000 tonnes in 2019. This was due to increased mining activities and increased slag reclamation at Muliashi and Baluba.  

During the year, revenue increased to ZMW6,435.79 million (US$345.45 million) from ZMW2,992.91 million (U$S 224.67 million) as at December 2019 with net profit increasing to ZMW784.97 million (US$42.13 million) from ZMW 274.91 million (US$20.64 million).  

In the quarter under review, ZCCM-IH signed a loan facility with CLM. With a positive equity position, the company shall continue to explore the possibility of dividend payments in 2021 so as to reduce this loan amount.  

No dividends were declared during the year (31 December 2019: nil).