Investee Companies

Annual Report Summaries

Mopani Copper Mines Plc Extract from 2019 Annual Report

During the financial year ending 31st December 2018, Mopani Copper Mines (MCM) recorded net revenue of ZMW9.43billion (US$842.04 million) (2017: ZMW3.95 billion US$352.60 million).
The net loss for the period under review was at ZMW8.09 billion (US$ 722.85 million) (2017: ZMW2.77 billion US$ 290.12 million net loss).
During the year ending 31st December 2018, MCM produced a total of 59,302 tonnes of copper from own sources and 60,188 tonnes of copper from external third-party concentrates (2017:
41,738 tonnes from own sources and 57,131 tonnes of copper from third party concentrates). The significant growth in revenue is attributable to the scheduled increase in production at the recently developed mine sites.
Through gearing, MCM initiated heavy capital expenditure projects in efforts of developing the Mufulira Deeps and the Synclinorium Shaft over the last financial years. This has resulted in finance costs reducing net profits for the period under review amongst other factors. The value of shareholder loans as at 31st December 2018 was ZMW39.53 billion (US$ 3,242.66
million).
With working capital balances excluding VAT at a 5-year low of ZMW 792.35 million (US$ 65.00 million) as at 31st December 2018, cash constraints have affected the ability to scale
production at the newly commissioned mine sites to optimal levels.
There were no dividends paid during the financial year ended 31st December 2018 (2017: Nil).
Annual Report Summaries

Lubambe Copper Mines Extract from 2019 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenues of ZMW1.24 billion (US$110.79 million) for the year ending 31 March 2019 (2018: ZMW517.37 million (US$54.18
million), falling below the budget of US$155 million but increasing from US$98.72 million in 2017. Operating costs were US$129 million, nearly at par with the budget of just below
US$130 million. Costs in 2017 were US$107.01 million. The year on year rise in costs was due to increased production volumes as well as mine redesign activities.
The loss for the year was ZMW 556.92million (US$49.74 million) (2018: loss ZMW 350.34 million (US$36.7 million))
In 2018 Lubambe had made substantial leaps in changing its mining and processing systems in a bid to raise production. Total copper ore mined was 1,316,109 tonnes, up from 840, 376 tonnes in 2017. Total contained copper produced was 23,689 tonnes, below the targeted 25,941 tonnes but significantly higher than the 14,891 tonnes produced in 2017.
Lubambe has continued to implement changes to the existing mine that should translate into the mine becoming profitable for the first time in 2020. In 2019, works on completing the Concept Study on the Extension Project will be accelerated so as to increase the certainty of the resource and prepare it for a Pre-Feasibility Study
There were no dividends declared during the year under review (2018: Nil)
Annual Report Summaries

KCM Extract from 2019 Annual Report

Konkola Copper Mines (KCM) reported total revenue of ZMW12.25 billion (US$1,084.80 million) for the financial year ended 31 March 2019 [2018: ZMW12.2 billion (US$1,283.0 million)]. The reduction in revenue was as a result of below budget custom production as well as below budget combined concentrate tonnage available for treatment in the smelter. This had an adverse impact on sulphuric acid production which in turn impacted on copper production at the Tailings Leach Plant. KCM’s total mine production for the year was recorded at 177,035 tonnes (2018:144,664 tonnes). Loss after tax was ZMW3.72 billion (US$ 332.2 million) [(2018: ZMW1.102 billion loss (US$131.6 million)].
Annual Report Summaries

NFC Africa Mining Plc Extract from 2019 Annual Report

NFCA recorded a net revenue of ZMW 1.78 billion (US$159.3 million) for the financial year ending 31st December 2018 (2017: ZMW 1.52 billion (US$159.6)). Profit after tax was ZMW89.57 million (US$ 8.0 million), (2017: ZMW153.74 million US$16.1million). Despite the decline in profitability, the financial performance remained positive and marginally exceeded targets that were set for the 2018 financial year. The production target in 2018 was 1.5 million tonnes of processed ore against the actual completion of 1.504 million tonnes while Copper in concentrate 2018 target was 27,000 tonnes against Copper actual figures closing at 27,600 tonnes.
The production did not include significant amounts of copper that came from the South East Ore Body as was initially anticipated. Despite management having projected significant Copper production from the South East Ore Body Plant by the end of the year, this was not the case. However, significant progress was made and management continues to focus on
bringing this project to completion to ensure increased production for the mine.
There were no dividends paid during the year ended 31st December 2018 (2017: Nil).
Annual Report Summaries

Kariba Minerals Ltd Extract from 2019 Annual Report

Kariba Minerals Limited (KML) reported total revenue of ZMW20.95 million for the year ended 31 March 2019 (2018: ZMW17.18 million). KML reported a net loss of ZMW11.77 million
during the financial period under review (2018: ZMW10.22 million loss).
For the financial year ended 31st December 2018, Kariba Minerals produced a total of 804,124 Kg of rough amethyst. During the same financial year, Kariba held one auction in February 2018 in Jaipur, India. Due to regulatory changes in India’s gemstone industry, no further auctions were held for the year. Revenue for the period is attributable to direct sales of Kariba’s established clientele.
Subsequent to the year end, ZCCM-IH increased its stake in KML to 100% by acquiring a further 50% shares.
There were no dividends declared during the financial year under review (2018: Nil).
Annual Report Summaries

Kansanshi Mining Plc Extract from 2019 Annual Report

Kansanshi Mining Plc (KMP) had sales revenue of ZMW18.36 billion (US$1.64 billion) for the financial year ended 31 March 2019 [2018: (ZMW16.08 billion) (US$ 1.68 billion)]. This was
lower by 3% from 2018 reflecting lower copper sales volumes partially offset by higher realized metal prices. Net profit after tax of ZMW3.12 billion (US$278.87 million) was lower than the
ZMW3.93 billion (US$411.52 million) reported in 2018 reflecting lower sales revenues.
Copper production for the financial year ended 31st December 2018 was 251,522 tonnes, slightly higher than 2017 (250,801 tonnes) primarily due to higher throughput and grade on the
sulphide and mixed ore circuits, as well as higher recoveries on the oxide circuit due to higher acid availability from the smelter compared to 2017. No concentrate was processed through
the high-pressure leach due to the processing of tarnished sulphide material.
Gold production was 130,019 ounces, about 8% lower than in 2017 mainly due to lower gold feed grades. Gold plant improvements commenced during the fourth quarter and will continue during the first quarter of 2019.
Cash costs were reduced due to acid sales and there being no major smelter shutdown in 2018, partially offset by higher fuel costs. AISC (All-in Sustaining Cost) of $1.55 per lb. was $0.07 per lb. lower than 2017 reflecting lower C1 cash cost and deferred stripping, partially offset by higher sustaining capital expenditures and royalty costs.
The Kansanshi Smelter achieved record production and throughput in 2018, having treated 1,381,637 DMT (Dry Metric Tonnes) of concentrate, a 14% increase over 2017 exceeding design capacity of 1.2 million DMT. The overall copper recovery rate achieved was 97%. During the year, the smelter processed 11,682 DMT of concentrate purchased from third parties to ensure smelter maintains maximum feed rate and acid production levels during the wet season.
A dividend of ZMW223.8 million (US$ 20 million) was declared for year ended 31 March 2019 [(2018: ZMW745.68 million) (US$78 million)]
Annual Report Summaries

CNMC Luanshya Copper Mines Extract from 2019 Annual Report

CNMC Luanshya Copper Mines Plc (CNMC) recorded a turnover of ZMW3.39billion (US$303.19 million) for the year ended 31st March 2019 (2018: ZMW2.22 billion (US$232.1 million). The
profit after tax was ZMW366.04 million (US$32.69 million), (2018: ZMW444.81million (US$ 46.58 million)). The increase in revenue and profitability was as a result of increased production
during the year as output at Baluba and the slag reclamation project complimented production from Muliashi open pit mine.
Total 2018 copper production increased to 47,256 tonnes from 43,177 in 2017. Focus has been placed on managing the high production costs at Baluba by balancing it out with production from slag reclamation. There were no dividends declared during the year ended 31 December 2018 (2017: Nil)
Annual Report Summaries

Chibuluma Mines Extract from 2019 Annual Report

Revenue for the financial year ended 31st December 2018 was US$65.8 million (2017: US$70.3 million). Net loss over the period under review was US$17.95 million (2017: profit of US$7.03 million).
The decrease in revenue is attributed to factors including lower payable contained Copper produced, finalisation of invoices at lower Copper prices than provisionally invoiced, lower grade of Copper mined through the crown pillar ores and limited third party ore for production. The decrease in Net profit for the period was attributable to the asset impairment of US$24.5 million following the completion of the 2018 statutory financial audit and an impairment review of mine assets completed by Jinchuan Head Office and Deloitte. The Chibuluma South ore reserve continued to be depleted during the year with life of mine now only 2 years. In 2018, the company continued its survival plan through higher recoveries from crown pillar mining. The company continues to stockpile this ore with the aim for further tests on how best it should be processed. Through Lufwanyama Mining Manufacturing and Trading Services Limited (LMMTS), a subsidiary of CMP, exploratory work is being carried out in North-Western in line with the company’s survival plan. No dividends were paid for the financial year ended 31st December 2018 (2017: nil).
Annual Report Summaries

Chambishi Metals Extract from 2019 Annual Report

The Company recorded EBITDA of ZMW169.06 million (US$15.1 million) for the year ended 31st December 2018 compared to ZMW242.95 million (US$21.7 million) in 2017. Copper produced for the 12 months to 31st December 2018 was 37,006 tonnes compared to 36,153 tonnes in 2017 and 1,614 tonnes of cobalt was produced vs 2,520 tonnes in 2017. There were no dividends paid during the year under review (2017: Nil).
Investee Company News

KCM Employs 100 Workers on Permanent Basis

By JOHN SAKALA
Konkola Copper Mines has migrated 101 people from fixed term contract workers to permanent and pensionable employment.

Those migrated are employees at the Tailings Leach Plant (TLP) and Nchanga Concentrators in Chingola, as part of reorganization currently taking place to improve operations.

KCM Provisional Liquidator Milingo Lungu said KCM conducted employment interviews with an intention to employ over 100 operators in the processing plants at Nchanga Business Unit in Chingola.

Mr Lungu said the current conversion of contract workers to permanent employees follows another recruitment conducted in October 2019, when 64 contract workers were converted to full-time employees, specifically for the Konkola deep underground mine dewatering works.

He said the new entrants on the job market will replace most of employees who have retired or left the company for other reasons in the last few months.

Since the announcement of the liquidation on May 21, 2019, the Provisional Liquidator and the KCM management have placed higher on the priority list the employment of new job entrants in order to empower Zambians with employment, whenever there are employment vacancies.

KCM has set its eyes on rejuvenating the company to ensure it continues to occupy its place as a major industry player and make a significant contribution to the growth of the mining sector and the economy of Zambia.

Source: The Independent Observer