Press Statements by ZCCM-IH and KCM during a Joint press briefing over the Default Judgment against the latter

ZCCM-IH Offices, Lusaka – Konkola Copper Mines (KCM) is one of Zambia’s largest copper producers and one of the largest private sector employers in the country, with operations in four locations, namely Chingola, Chililabombwe, Kitwe and Nampundwe.

The majority shareholder of KCM is London-listed Vedanta Resources, which holds a 79.4% stake, while ZCCM-IH has a 20.6% shareholding in KCM.

KCM and ZCCM-IH have been engaged in discussions with regards to the price participation settlement agreement, which was entered into by both parties in December 2012.

On Friday 16th December, the High Court in London requested KCM to settle this amount with ZCCM-IH and resolve this matter within 28 days.

I am standing here today as part of a joint press briefing with the CEO of ZCCM-IH, Dr Pius Kasolo, to assure all of our stakeholders that we are working together to resolve this matter amicably and to reassure everyone that there is no risk to the KCM business.

We remain fully committed to fulfilling our financial obligations.

Vedanta remains committed to the Group’s operations in Zambia, which is reflected by the significant investment of over $3 billion in KCM since 2004.

Vedanta and KCM have a 50 year vision to continue mining copper in Zambia and we look forward to further strengthening our relations with all stakeholders, including ZCCM-IH.

Mr Steven Din
Chief Executive Officer

Press Statements by ZCCM-IH and KCM during a Joint press briefing over the Default Judgment against the latter

ZCCM-IH Office, Lusaka – As you may be aware, ZCCM Investments Holdings Plc (ZCCM-IH) obtained a Judgment against Konkola Copper Mines Plc (KCM) in the sum of about $ 103 Million to be paid within 30 days, as a result of unpaid sums due to ZCCM-IH dating back to 2012.

I must mention and emphasize that ZCCM-IH is not in the business of litigating, but in the business of enhancing value for its shareholders.

In the quest to achieve this, there are instances where misunderstandings between parties have to be resolved by an independent body, which in this instance was the courts of law.

This should not be taken as a deliberate attack on our partners or indeed a quest to injure them. The action was undertaken because we are also answerable to our shareholders and various stakeholders which include the Zambian people.

ZCCM-IH remains committed to ensuring that the KCM operations continue in the country, and to provide the necessary support to them, to ensure that we enhance the value of our stake in the Company.

Following the judgment and this joint briefing, we wish to state that the business relationship between ZCCM-IH and KCM will continue, but also to remind our partners that we will do what is necessary to protect our interests.

Going forward, both ZCCM-IH and KCM have committed to manage the business, in a manner that is mutually beneficial to all the parties involved.

Dr. Pius C. Kasolo
Chief Executive Officer

ZCCM-IH | Announcement default judgement against KCM

We refer to the Market Update where the market was advised that ZCCM-IH had filed a Claim Form with the English High Court to recover outstanding sums in excess of US$100 million due to it from Konkola Copper Mines Plc (KCM) pursuant to the terms of the Settlement Agreement entered into in 2013.

We now advise that ZCCM-IH has been successful in its application for default judgment. KCM has been ordered (on 16 December 2016) to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days. The total amount to be paid by KCM amounts to approximately US$103 million. KCM has also been ordered to reimburse ZCCM-IH 80% of the costs it has incurred in pursuing its claim.

Further directions have been given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM.

By Order of the Board
C Chabala
Company Secretary


Issued in Lusaka, Zambia on 20 December 2016

Lusaka Securities Exchange Sponsoring Broker
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First Issued on 19 December 2016

Vedanta Unit Told to Pay Zambian State Company $103 Million

Vedanta Resources Plc’s Zambian unit must pay the southern African country’s majority state-owned mining investment company about $103 million after a London ruling related to a copper-price agreement.

ZCCM Investments Holdings obtained a default judgment in the U.K.’s High Court of Justice against Konkola Copper Mines on Dec. 16, it said in an e-mailed statement Monday. KCM said in an e-mailed statement on Tuesday that it’s consulting with ZCCM-IH and “other relevant stakeholders to resolve all outstanding issues within 30 days, in accordance with the court’s ruling.”

KCM hadn’t paid the money owed under the copper-price participation deal because of “operational and financial challenges,” ZCCM-IH, which has a 20.6 percent shareholding in Konkola, said in its 2015 annual report. The Vedanta unit was in talks with ZCCM-IH and the government to pay the claim, which needed to be settled from available cash flows, KCM Chief Executive Officer Steven Din said Nov. 10. The company was at that point hoping to resolve the matter out of court, after ZCCM-IH filed the case in June, he told investors on a call.

“We are working together to resolve this matter amicably,” Din told reporters at a joint press briefing with ZCCM-IH in Lusaka, Zambia’s capital, on Tuesday.

The court ruled that ZCCM-IH is entitled to recover more money from KCM if it’s found that the company transferred funds to Vedanta, which would have been in breach of the pricing agreement.

ZCCM-IH is also claiming damages from First Quantum Minerals’ Kansanshi unit in Zambia, in which it has a 20 percent shareholding, in the Lusaka High Court, and has started arbitration proceedings in London over the same matter related to a loan it said Kansanshi gave First Quantum that wasn’t at arm’s length terms. First Quantum denies any wrongdoing.


Source: Bloomberg

Mine boosts rural town in Zambia

The mining town of Solwezi, 633 Kilometres North West of Zambia’s capital Lusaka, has been transformed into an active centre of business eyeing markets beyond borders.

Host to three mining giant outlets, Kansanshi, Lumwana Kalumbila, the provincial capital is attracting trade from neighbouring Angola in the west and Democratic Republic of the Congo (DRC) in the North.

Until recently Kalumbila mine was part of Solwezi but the government has hived it off from there creating a new district all together.

“But even then Solwezi still has a foothold in there (Kalumbila) in that every little thing that residents of Kalumbila need they have to travel here,” said a local trader Amon Bwembya Kikupa.

Within a few years, three shopping malls have sprung up along a litany of development structures from hotels, lodges, and filling stations to new restaurants.

A new civic centre building has been constructed while many government blocks have been rehabilitated if not replaced by modern ones.

A number of banks have set up camp there while those who moved earlier have opened up new buildings.

A recently constructed $2million City mall just on the edge of the town towards Kasempa and Mwinilunga roads has not only added impetus to the status of the district but has given a complete new outlook of the former low level rural town.

Like many parts of Zambia Solwezi has witnessed a housing construction boom that has wiped out huge areas of idle land including some shanty townships and replaced them with new modern housing units.

As mining thrives in the area other businesses are proportionally sprouting locally and spilling activities into neighbouring Angola and the DRC.

Since the Angolan civil war ended followed by a long period of tranquil Angola has embarked a countrywide reconstruction programme which has benefitted even some Zambians who have gone to work there.

On their part Zambians have stepped up trade in foodstuffs such as eggs, Tomatoes and other vegetables in need in the former Portuguese colony.

To enhance trade deals and cement cultural relations between the two countries the office for the Angolan Consular general has been opened in Solwezi.

The office has played a critical role in helping refugees wishing to return home.

On the other side, the 160 Kilometre stretch from Solwezi to Kipushi, the Congolese border town is a hive of activity as cross border trade thrives people of Kolwezi in the DRC and Solwezi in Zambia.

The North western province as a whole has in recent years seen an increase in maize production and residents of Kipushi and other border areas are beneficiaries of the grain sold to communities through informal and formal deals.

Beans and sorghum are common delicacies from Solwezi and the rest of the province found among consumers in the DRC.

A North Western Province Chamber of Commerce official said an interview recently the organization was working with the Zambia Development Agency (ZDA) to enhance business liaison between Angola. Zambia and the DRC, through trade missions.

Beyond that the DRC enjoys the largest swathe of copper-rich land called the Lufilian Arc which borders with Zambia.

The arch extends from Copperbelt and North Western province into DRC’s Katanga province . Solwezi lies within this arch while on the other side there is Kolwezi, thus the mining activities in the arch have therefore strengthened relationships between peoples of the two countries.

It is common to find trucks ferrying huge mining equipment from South Africa using the Solwezi –Kipushi route into the DRC.

Similarly a lot of mineral exports are funneled from the DRC through Solwezi to the Copperbelt onward to further South.

A recent visit to Solwezi however, revealed that a lot more is needed to make more accessible the north western province, dubbed the new Copperbelt,

Within the district civic leaders under the now adopted decentralization policy, have serious challenges to improve roads.

Resources have to be mobilized from mining companies there and other operators to achieve the task.

Except for the main highway that runs in the middle of the city centre, and about a 10 Kilometre stretch from the main road to Kansanshi mine most of the roads are not tarred, thus glazing the positive development the town has seen in recent years.


Source: Herald Express

First Quantum Faces $1.4 Billion Claim From Zambian Firm

ZCCM Investments Holdings, the state-controlled Zambian company that holds minority stakes in most of the country’s copper mines, plans to claim as much $1.4 billion from First Quantum Minerals Ltd. after accusing the Vancouver-based company of fraud. The Canadian company’s stock fell.

The claim includes $228 million in interest on $2.3 billion of loans that ZCCM-IH said First Quantum wrongly borrowed from the Kansanshi copper mine, as well as 20 percent of the principal amount, or $570 million, according to an internal company presentation, dated Nov. 4, obtained by Bloomberg.

The company is also seeking $260 million as part of a tax liability the Zambia Revenue Authority said Kansanshi owed it, as well as the cost of the mine borrowing money commercially that ZCCM-IH said could have been avoided.

ZCCM-IH, in which the Zambian government has a 77 percent stake, said in papers filed in the Lusaka High Court on Oct. 28 that First Quantum used the money as cheap financing for its other operations. ZCCM-IH also last month filed a notice of arbitration against Kansanshi in London over the same matter. ZCCM-IH owns 20 percent of Kansanshi. No figure was mentioned in the court filings.

First Quantum says the claims are “inflammatory, vexatious and untrue,” and that the loans were at fair market rate. First Quantum is in talks with Zambian government representatives to resolve the matter, it said in a Nov. 11 statement. It declined to comment on Monday.

The company’s shares fell 4.6 percent to C$13.57 by Tuesday’s close in Toronto.

FQM, as the company is known, is disregarding the rights of minority owners in ZCCM-IH in dealing directly with government, Philippe Bibard, a spokesman for a minority shareholder group based in France, said by phone Nov. 11.


Source: Bloomberg

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…

 


Download the full announcement below.

Load shedding to reduce once Maamba switches on mid-November-ZESCO

Power utility ZESCO says the national grid will be boosted by the injection of about 270 MW of power from Maamba coal fired power plant starting mid-November 2016.

ZESCO Senior Manager Marketing and Public Relations Bessie Banda said this will result in a remarkable reduction in the national power deficit and subsequently in the extended load shedding that has been experienced in the last few weeks in some parts of the country.

Ms. Banda said Maamba Collieries Limited has constructed a 300 MW mine mouth coal fired power plant in Sinazongwe District of Southern Province.

She said two generators of 150 MW output have been installed at the power station. When fully commissioned, the power plant will produce 300 MW out of which 270 MW will be injected into the Zambian electricity grid.

Ms. Banda said the other 30 MW will be utilised at the Maamba plant adding that the first generator at Maamba was commissioned on 24 July 2016 while the second generator is ready and being prepared for synchronization to the national grid.

“Since commissioning, the first generator at Maamba has produced and dispatched about 65,346MWh into the Zambian power grid and ZESCO has been buying this power. However, on 9 October, the Southern part of the Zambian grid that is connected to Maamba power station was separated from the rest of the national grid to enable completion of the transmission line upgrade works between Muzuma and Kafue Town,” Ms Banda said.

“Consequently, power from Maamba became unavailable to the national grid thereby temporarily aggravating the power deficit the country is facing. Maamba is currently only supplying parts of Southern and Western Provinces.”

Ms. Banda said the line upgrade works have been undertaken in order to increase the transmission capacity from Muzuma in readiness for evacuation of the 270 MW from Maamba as well as the additional power to be generated under Maamba Phase II.

“The transmission line upgrade works between Muzuma and Kafue Town will be completed by 11 November, 2016 when the line will be restored to service. It is expected that the current load shedding will be reduced once these works are completed.”


Source: Lusaka Times

VIT varsity inks MoU with Zambian firm

Chennai: VIT University has entered into an MoU with Konkola Copper Mines (KCM), Zambia, to enable students get hands-on training.

A press note said following the successful education imparted by VIT to 15 students sponsored by KCM in 2011 and 15 students in 2014, the Zamibian company has again sponsored 14 students this year.

This would enable develop skilled technical manpower. The MoU was signed by Steven Din, chief executive officer, KCM and Dr G Viswanathan, Chancellor, VIT University, recently.

The release said they will undergo studies on various disciplines of engineering at VIT University. Steven Din later took a tour of the campus and its facilities including the library, laboratories and hostels.

He met all the sponsored students over an interactive lunch. Konkola Copper Mines plc (KCM), one of Africa’s largest integrated copper producers, is a subsidiary of London-listed Vedanta Resources Plc, one of the world’s largest diversified natural resources companies.

VIT Vice-Chancellor Dr Anand A Samuel, Pro Vice-Chancellors V Raju and S Narayanan were among those present.

(Caption: VIT Chancellor Dr G Viswanathan and KCM chief executive officer Steven Din after signing the MoU.)


Source: News Today

UNZA students win mining awards

UNIVERSITY of Zambia fourth year student Absalom Tembo has scooped the 2015/2016 Konkola Copper Mines Plc prize for the overall final year student in the School of Mines. During the School of Mines Student award-giving ceremony held on Friday at UNZA veterinary lecture theatre, James Chulombo won the Konkola Copper Mines Plc prize for the best graduating student in Geology while Katongo Kangwa came out as the best graduating student in Mining Engineering.

Absalom Tembo again got the award for the best graduating student in Metallurgy and Mineral Processing and Parson Banda won the Mopani Copper Mines prize for the best final year project in Geology.

The best final year project in Mining Engineering award sponsored by Mopani Copper Mines went to Brighton Samatemba while Kennedy Chansa was awarded the best project final year project in Metallurgy and Mineral Processing.


Source: Daily Mail