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‘Erratic power supply’, delayed vat refunds cost Chambishi Metals PLC revenue, affects mine expansion-ZCCM IH

Erratic power supply coupled with unpaid for US$23 million owed in Value Added Tax forced Chambishi Metals Plc, a unit of Enya Holdings Ltd. to incur losses during the just ended financial year, Zambia’s Holding company-ZCCM IH says in a report.

ZRA has withheld over US$600 million in value-added tax repayments to mining companies that have failed to provide importer documentation required to qualify them for VAT reclaim on the zero-rated copper exports.

In its report ahead of the planned Annual General Meeting (AGM) on 7 October in Lusaka, ZCCM IH, which holds 10 percent shares in the copper, cobalt and nickel producer says the Copperbelt based Chambishi metals lost US$9.5 million as a result of erratic power supplied to the mines.

Copperbelt Energy Corp. buys power from the country’s utility, Zesco and sells an average 520 megawatts daily to mines operating on the Copperbelt, Chambishi Metals Plc inclusive, to run and produce various metals including copper for onward exports to the international metal market.

According to the report, ZCCCM IH adds that the erratic power supply affected copper cobalt and nickel production at the miner during the financial year ended 31 March 2014, the report said citing ZCCN IH acting Chief Executive Officer, Mabvuto Chipata.

Accordingly, the erratic power outturn resulted in the mine losing out 3, 300 tons of Copper and 410 tons of Cobalt said Mr Chipata adding that during the year under review, Chambishi Metals Plc faced two notable strategic challenge.
“Chambishi’s copper production performance continued to be adversely affected by power fluctuations, which the company estimated resulted in losses amounting to $9.5million, of which $6.8 million resulted from lost production of 3,300 tons of Copper and 410 tons of Cobalt,” Chipata added.

The problem was compounded by the delayed resolution of the monies owed to various mining companies in Zambia by Government in value Added Tax (VAT) and the miner is one of those affected by the withheld tax refunds.

According to the report by Chipata, Chambishi Metals Plc is owed $6.5 million by ZRA in audit claims carried out during the period 2006 to 2011.

Additionally, it is owed a further $23 million by ZRA as at March 2014 relating to a Value Added Tax (VAT) refund, all which have contributed to the poor liquidity of the company.

“The matter remains unresolved but given that Chambishi estimates that 90 percent of its input costs are VAT related and deductable, the suspension has had a material effect on its day to day operations,” Chipata stated in his report.

Non Ferrous Mining Africa (NFA)’s capital expenditure on the South East Ore Body (SEOB) project is estimated at US$61.6 million during the year ended 31 March this year.

The expected investment cost for the project was estimated at approximately US$830 million and the project is expected when completed in or around 2017, create about 5,000 jobs.

Loan financing of US$548 million is being arranged from the Export-Import Bank of China to partially finance the South East Ore Body project with the balance coming from internally generated funds,” Chipata adds of the project.

The SEOB project involves mining and processing of copper ore to concentrate stage for onward processing into finished copper cathodes at the Zambian smelters within Chambishi, Mufulira and Kitwe.

ZCCM-IH has 10 percent equity in Chambishi Metals Plc while Enya Holding BV (ENRC Group, which once owned Luanshya Copper Mines before abandoning it at the height of the global financial crisis, owns 90 percent in the Chambish project.

Chambishi is a mining, tolling and refining company with extensive copper and cobalt reserves. It has undertaken several improvement and expansion projects that will streamline its operations and increase both the cobalt and copper production.

Source: Mining News Zambia
ZCCM-IH News

ZCCM-IH Pays first dividends to shareholders since inception

Zambia Consolidated Copper Mines Investment Holdings (ZCCM IH), the country’s mine holding company has since inception over 10 years ago paid dividends to the country, the company says on its website according to Bloomberg News wire.

According to the report, the company (MLZM), the company formed to hold the Zambian state’s minority stakes in local copper mines, has for this year managed to raise capital to pay dividends to the state since 2000.

The government will receive 220 million kwacha ($35 million), helping to bolster state revenues that Finance Minister Alexander Chikwanda last month said were “severely constrained.” Bloomberg cites finance minister Alexander Chikwanda as saying recently.

The company which is scheduled to hold its Annual General Meeting on 7 October in Lusaka this year disclosed the dividend in the 2014 annual report posted to its website. It’s the first since its formation, according to ZCCM data.

Zambia, Africa’s biggest copper producer after the Democratic Republic of Congo, owns 87.5 percent of ZCCM Investments.

The company holds stakes ranging from 10 percent to 30 percent in businesses that moved into private hands in the 1990s after the government reversed former president Kenneth Kaunda’s nationalization program.

ZCCM Investments Holdings Plc (ZCCM-IH) is one of Zambia’s prime investments holdings companies with the majority of its investments in the copper mining sector of Zambia. It is quoted on the Lusaka, London and Euronext Stock Exchanges.

The Company’s shareholders are the Government of the Republic of Zambia (GRZ) with 87.6% shareholding and private equity holders with 12.4%. Minority shareholders are spread throughout the world in various locations. ZCCM-IH is a successor company to Zambia Consolidated Copper Mines Limited (ZCCM Ltd).

Prior to privatization in 2000, ZCCM Ltd was a consolidated copper mining conglomerate which owned and operated a number of mining divisions which at privatization were sold off as independent mining companies.

ZCCM Ltd was majority owned 60.3% by the Government of the Republic of Zambia, 27.3% by Zambia Copper Investments Ltd (ZCI), an associate company of Anglo American Plc and 12.4% by private investors.

According to data on ZCCM IH website, the company owns 100 percent stake in Ndola Lime Company, 35 percent in Maamba Collieries Limited, 20.6 percent in Konkola Copper Mines, 20 percent in power provider to mines on the Copperbelt-Copperbelt Energy Corporation or ( CEC), 20 percent shares in Kansanshi Copper mine, a unit of First Quantum Minerals and 20 percent in Luanshya Copper Mine.

Other mines are 15 percent in Chambish Non Metals Corporation (CNMC), Luanshya Copper Mines, 15 percent, 10 percent in Non Ferrous Corporation Africa (NFCA plc), 10 percent in Chambishi Metals Limited and 10 percent in Mopani Copper Mines Limited, a unit of commodity trader, Glencore Xstratra.

Source: Zambian Mining Magazine
Investee Company News

Enviro company limits dust at Zambia copper mine

Environmental management company I-Cat Environmental Solutions is supplying Zambian copper mine Kansanshi, owned and operated by mining companies First Quantum Minerals and ZCCM-IH, with its GreenGrip gravel road sealant.

The sealant eliminates dust on the mine’s semipermanent roads, preventing the adverse effects of dust on miners and reducing maintenance costs caused by dust-related failures, explains I-Cat Zambia director Chris Smit.

He notes that GreenGrip, which is an environment-friendly polymer-based product, was first applied at the mine in June 2013.

“Normally, mines use water to get rid of dust, but by applying GreenGrip, you prolong the effect, as GreenGrip has a special ingredient mixed with the polymer that binds soil and seals the road.

Dust is a huge problem on Zambian mines, particularly at this time of year, owing to the dry and windy conditions

– Chris Smit

“Instead of water bowser trucks constantly spraying water, GreenGrip needs to be applied only once every two to three days, depending on the dust levels at the mine. This significantly reduces maintenance and associated costs,” Smit tells Mining Weekly.

He notes that, while Zambia currently has air-quality laws in place, Zambian mines do not often adhere to them. This, however, is starting to change, says Smit, as international companies, which need to adhere to a country’s laws to remain operational, are becoming more prevalent in Zambia’s mining industry.

Smit highlights that dust is a huge problem on Zambian mines, particularly at this time of year, owing to the dry and windy conditions.

“Many people work in plant and pit areas, and on haulage roads, which are very dusty. Dust affects their health and, by applying these products, mines can reduce the dust levels by 40% to 50%, making a significant difference to the health of mine personnel,” he emphasises.

Smit adds that temporary roads, particularly around pit areas, that are not treated with GreenGrip are, however, treated with RDC 20, which is a more cost-effective dust palliative product offered by I-Cat.

Supplying Zambian Mines
He notes that I-Cat has been supplying the Zambian market since 2011 with its liquid soil additive RDC 20, which binds fine soil into heavier particles to prevent dust from becoming airborne. I-Cat has also introduced its new bitumen-based GreenBit product, which can primarily be used on main haulage roads to prevent roads from being washed away by rain.

“Owing to heavy rainfall in Zambia, GreenBit was developed in 2013 for application on main haulage roads and is currently being used on ferrous metals miner Assmang’s Bruce and King mines, in the Northern Cape, South Africa, with huge success. We apply this product to roads in Zambia to stabilise the roads during rainy seasons,” he explains.

GreenBit, as the name suggests, has an additive mixed with a lower dose of bitumen, which reduces the environmentally harmful impact of the more traditional bitumen-based products.

“We are an environment-friendly company and, as such, we strive to supply products to mines that have the same effects as a bitumen road – commonly known as asphalt – but with lower toxicity levels.

“Our mission is to prevent environ- mentally harmful products from spilling into runoff streams and dams, which is why we developed green products such as GreenGrip and RDC 20.

I-Cat Zambia has been registered with the Zambian Environmental Management Agency (Zema) since 2012 and all its products have been tested and declared environment-friendly by Zema.

Source: Mining Weekly
Investee Company News

First Quantum, Metorex mining increase Copper production, turnover in Zambia

Two of some of the leading multinational mining companies operating in Zambia, Africa’s leading copper producer, have found a niche for their investment and have this year increased mineral production and also increased their earnings.

First Quantum Minerals Limited, the Australian listed and diversified miner, with operations in Zambia at Kansanshi and the new ‘Greenfield’ US$2 billion Kalumbila Mine in north western province increased its copper production by four percent during the last three months to 30 June this year to 107,808 tons compared to 103.694 tons three months prior.

Copper sales per ton rose over 10 percent to US$114,449 against US$95,491 during three months ending 30 June this year at Kansanshi mine in Zambia as the cash cost of copper production per pound also increased to US$1.45 against an earlier US$1.34 three months earlier.

Nickel production in contained tons dropped to 10,651 against 11,927 three months earlier, although realized copper prices/per pound rose to US$12,223 against US$10,875 recorded three months prior to 30 June, the company said.

Gold sales rose US$60,135 against US$59,381 during the three months to 30 June this year while gold production dropped 60,723 ounces against 63,567 ounces three months prior to the period under review, it said in its report.

Sales revenues increased to US$945.1 million against US$869.3 million during the three months ending 30 June with gross profit rising to US$293 million against US$201.1 million.

Expected group production has been revised to be between 418,000 and 444,000 tons of copper, 45,000 and 48,000 tons for nickel, 221,000 tons and 242,000 tons for gold between 55,000 and 60,000 tons for Zinc respectively.

It has revised its capital expenditure for the group at US$2.4 billion from an initial US$2.2 billion, excluding capitalization of any pre-commercial production and capitalized interest.

Metorex Minerals Ltd. achieved a turnover of US$60.4 million at its owners Chibuluma Mine in Zambia during the six months ending 30 June this year as profit before tax re declined to US$14,490 at the end of the six months ending 30 June this year from US$15,888 recorded a year earlier.

Despite recording an increased production of the red metal to five percent, turnover for the company during its operations over six months remained flat chiefly on account of reduction in average copper price.

At 30 June, this year, Metorex Ltd’s Chibuluma mine spent US$3.8 million on development of its ‘Greenfield’ Chifupu copper project on the outskirts and south of Kalulushi on the Copperbelt, intended to extend the mine lifespan to the year 2020 from the estimated 2017.

To boost mine operations and increase copper outturn Metorex Mining, the owners of the Chibuluma mine have approved about US$24 million to be spent on the development phase of the Chifupu project and ensure it is done as scheduled, says Eustus Munsaka, Metorex’s Chief Financial Officer in his report.

During the period the company paid US$5.882 million to shareholders in interim dividends.

First Quantum Minerals and Metorex are among the multinational miners that emerged into Zambia after the privatization of the mining conglomerate-Zambia Consolidated Copper Mines (ZCCM) in the late 1990s as Zambia sought to promote private sector ownership of the mines in the copper-rich country.

Since the privatization of the mines, an investment of US$8 billion has been ploughed into the mines with copper production projected to rise to 1.5 million tons by next year and later rise to over 5 million tons by 2022, according to projections by the chamber of mines of Zambia, basing on the oncoming projects at various mining companies in the country.

Source: Mining News Zambia
Investee Company News

Mopani Copper Mines injects US$15 million in artisanal training scheme

Mopani Copper Mines, a unit of global commodity trader and diversified miner, Glencore Xstratra, has injected more than US$15 million in reviving an artisan training school in Mufulira, one of its operational areas following calls by the Government to improve skills training in the country and reduce on the industry relying on expatriates.

Previously, Zambian mines under the then Roan Consolidated Copper Mines (RCM) and Nchanga Consolidated Copper Mines (NCCM)-which together formed Zambia Consolidated Copper Mines (ZCCM), various mining companies had established training skills centres in various towns.

This was meant to encourage Zambians to learn various trades as part of the country’s effort to reduce on labour outsourcing, which saw many Zambians learn the ‘various trades’ and rose to senior ranks.

Among some of the Zambians that rose to senior positions at the time of ZCCM included then Superintendent, Albano Mutati, Pius Mambo and Francis Kaunda, among others as part of the Zambianisation of jobs by then President Kenneth Kaunda ostensibly to encourage the locals to run the mines.

However, with the continued outcry from Government on the need for the industry to maximize on locals to take up senior jobs and reduce on outsourcing, which has seen various Zambians fail to rise to senior positions, Mopani Copper Mines has taken a step ahead in meeting the desires of the Government.

In a statement by the miner, US$15 million (about K90 million) has been ploughed into constructing (reviving) a central training centre in Mufulira, which the company then under RCM had before the unbundling of the ZCCM conglomerate, to mitigate the critical shortage of artisan skills across Zambia’s mining industry.
Mopani Copper Mines chief executive officer, Danny Callow, says the continued growth of the copper mining industry in Zambia has led to a shortage of key technical skills and unavailability of suitably qualified and experienced local artisans. This situation necessitated the establishment of the training centre.

Callow stated that the training centre had been equipped with the world’s best engineering equipment and had so far enrolled over 140 students in its first intake. A total of 200 apprentices would be enrolled by the end of 2014.

Additionally, the Technical, Education, Vocation and Engineering Training Authority (TEVETA) accredited Centre, has come in handy and is offering courses under Mechanical Engineering that include, Fitting and Machining, Plating and welding, Heavy Mining Equipment Diesel Mechanics and Rigger Rope man. In Electrical Engineering, the school will offer courses in Electrical, Auto Electrical and Instrumentation.

The course being offered to the miners, Callow, added would last between two and three years. This was similarly the trend before under ZCCM, in which many Zambians learnt various trades ranging from fitting, electrical, boiler makers, metal fabricators and welders, among others.

It is envisaged, according to the syllabus being offered that the first class of fully trained artisans is expected to graduate in 2016 in which training will be accessible to Zambian school leavers and other local candidates seeking qualifications leading to a career within the mining industry.

According to Callow, the miner would spend a minimum of approximately US$20,000 annually on each apprentice in standard training and other related costs. Other than offering the training for free, Mopani would also provide the students with upkeep allowances, meals and accommodation and recreation facilities.

More than 30 years ago since Zambia’s mining industry became active, leading the country into becoming Africa’s leading copper producer-a feat it has maintained for the past 26 years, Zambia had well-established and funded training institutes that produced highly-qualified artisans and technicians for the mining industry.

Regrettably, the slowdown in copper prices on the international metal market in the 1970s which saw Zambia contribute a paltry 250,000 tons per annum from an average 700,000 tons earlier led to reduced investment in mining and training infrastructure.

Zambia was eventually forced to abandon artisanal training programmes on account that most undergraduates opted to pursue engineering courses at university level, Callow notes in his statement adding that the few remaining artisans could not satisfy the growing industry demand which led to the increased cost of hiring artisans.

During a recent workshop in Kitwe, northern Zambia, Chamber of Mines of Zambia President Emmanuel Mutati, an engineer himself, lamented the low skilled manpower-especially at Artisanal levels a situation he said needed to be reviewed to prop up the industry.

He attributed the decline to the development of the mines in north western Zambia, which has taken most of the skilled laborers to start up new projects in the area, now dubbed “The new Copperbelt” because of its vast mineral resources including gold and uranium.

Source: Mining News Zambia
Industry News

Zambia’s IDC Plans Bond Sales for State-Owned Companies

Zambia’s Industrial Development Corp. said it plans to sell bonds and stakes in state-owned companies to boost investment and economic growth in Africa’s second-largest copper producer.

The IDC, as the company is known, plans to restore profits at the loss-making government entities and reinvest any dividends, Charles Mate, corporate affairs director, said in an interview in Lusaka today. The creation of the IDC this year doesn’t signal a return to nationalization, said Andrew Chipwende, operations director.

“With the IDC we will probably be undertaking privatization even more vigorously,” through publicly listing more state-owned companies, Chipwende said. “We are actually setting a platform to undertake even further privatization.”

Zambian President Michael Sata, who was voted into office in 2011 on pledges to reduce unemployment and poverty, announced plans for the IDC and a sovereign wealth fund in January. Less than 1 million of the 14 million population in the southern African nation are formally employed, according to government estimates.
“There is a fundamental desire for job creation,” Mate, who was managing director at Stockbrokers Zambia Ltd. before joining the IDC, said. “We have an unemployment crisis.”

One of the companies being housed in the IDC is ZCCM Investments Holdings Plc, which was created to hold minority stakes in mines after the government reversed the nationalization policies of former President Kenneth Kaunda. Others entities include Zambia Railways Ltd., Zambia State Insurance Co., and Zambia Forestry and Forest Industries Corp.

New industries the IDC plans to invest in through partnering with private companies include agriculture, horticulture, manufacturing, renewable energy and tourism, according to Chipwende and Mate. Zambia is seeking to reduce dependence on copper, which accounts for about two-thirds of export earnings.
Most of the profits the IDC makes will go toward Zambia’s sovereign wealth fund, managed by the central bank, and the rest will be reinvested, said Chipwende.
Industry News

Copper output in Zambia declines 2 percent-Central Bank

Zambia’s copper outturn has continued to fluctuate-barely days after the country; Africa’s leading copper producer, raised its bar of the red metal on the international metal market, according to the Lusaka-based Bank of Zambia.

According to the data by the Central Bank-copper production from Zambia took a downturn-declining 2.5 percent in the first quarter this year compared to a year earlier, says Bank of Zambia Governor, Michael Gondwe.

In his address to Lusaka-based journalists, August 5, the Bank says copper output dropped 2.5 percent to 276, 075.0 tons from 283,042.3 in the first quarter of 2014. On a year-to-date basis, copper production stood at 559,117.3 tons representing 16 per cent higher than the 480, 892.6 tons produced in the first half of 2013.

Earlier, Bank of Zambia stated on its website that copper production in Zambia rose to over 400,000 metric tons in the first quarter of 2014 from around 300,000 tons produced in the same period last year.

Copper production rose to 473,249 metric tons between January and May from 399, 515 tons produced in the same period last year, the Lusaka-based bank stated.

The development was chiefly attributed to the increase in the mineral output to new developments currently taking place in the mining sector across the country. Copper production increased by 18 percent on year, during the period under review. “Copper export earnings grew by 7.4 percent to US$3,209.1 million during the first five months of the year from US$2,987.5 million recorded over the same period last year, driven by higher export volumes,” the Bank said according to data posted on its website recently.

Copper export volumes, at 477.485.3 metric tons, were 19.4 percent higher than 399,919.8 metric tons recorded during the corresponding period in 2013. The average realised price of copper, however, declined by 10 percent to US$6,720.86 per ton from US$7,471.77 registered during the same period last year.

However, it said the decline in copper prices by 9.1 percent to the US$6,691.00 per ton as at June 11 this year from US$7,360 per ton at the end of December 2013, impacted on market sentiment.

Government policy would remain focused on diversifying the export base through supportive interventions in economic sectors and activities with the greatest potential for exports.
Investee Company News

Local contractor commends joint venture partnership initiative by Mopani

Mopani Copper Mines Plc has implemented a number of programmes aimed at empowering and building capacity of local contractors and other small and medium enterprises in Zambia. The Company is encouraging formation of joint venture partnerships between local contractors and internationally-recognized and well-established foreign firms wishing to do business with the mining company. This has cheered the local contractors who have commended Mopani for coming up with the initiative.

One such joint venture supported by Mopani is between Shawonga Enterprises Limited of Zambia (33.3%) and ZINPRO Engineering of South Africa (66.7%). The two have partnered to form ZINPRO Zambia Limited, a company specialized in Shaft and structural steel rehabilitation works. ZINPRO Zambia has been engaged by Mopani to undertake massive refurbishment of the shaft infrastructure which Mopani inherited in a highly dilapidated state at privitisation.

Mopani Chief Executive Officer explains the company’s policy on joint ventures and the benefits that will be derived from supporting these partnerships:

“We have a deliberate policy that encourages foreign manufacturing companies wishing to do business with us to partner with local companies or involve Zambians in their shareholding structures. This, we believe, will help to build capacity of local companies, encourage skills transfer and give a competitive edge to the local firms whilst improving quality and efficiency,” said Mr. Callow.

Mr. Callow said initially attention was directed at improving processing plants and that time had come to address mining related issues.

“At privitisation we inherited highly dilapidated infrastructure both on surface and underground. Our major focus initially was to upgrade the Smelter to eliminate SO2 emissions and improve its efficiency. This project was completed 15 months ahead of schedule in March 2014 and is currently doing very well.

“Our focus now is to improve efficiency and productivity of underground operations. Maintenance of vertical shaft infrastructure is a highly specialised job and there is lack of local skills in this regard due to many years of lack of investment. Every month Mopani loses about 6000 metric tons of copper due to shaft shutdowns to facilitate maintenance.

“By bringing in shaft experts, ZINPRO Zambia Limited, Mopani will address the problem of frequent shutdowns and achieve continued production and less maintenance costs. This will also make shaft maintenance skills available in Zambia through the exchange that will take place as a result of the partnership,” Said Mr. Callow.

ZINPRO Zambia Operations Director, MrLondon Mwafulilwa has hailed Mopani for coming up with the initiative of supporting joint ventures. He has reiterated that the move will benefit all stakeholders involved, including the nation.

“First and foremost this venture is important to our Company because we are able to realize the full potential of the skills that are available, blend them with those of experienced hands and be able to participate in improving productivity in the mining industry as well as grow the mining support base. We are also able to provide employment and develop the local skills of the Zambian personnel,” said Mr Mwafulilwa.

He also reiterated that by partnering with ZINPRO Engineering, the local company has been able to upgrade its profile and working culture and expects a lot of future benefits.

“The ZINPRO Team has brought on board experience and an adorable working culture which most of our technical people do not have. The approach to how we look at the entire business has changed because we now drive solutions as compared to merely seeking contract opportunities.

“In the long term, there will be appropriate technology transfer and in the next 5/10 years we should have in the country dependable and reliable teams to be able to manage such projects without external expertise.”

Mr Mwafulilwa appealed to other local contractors to be consistent and prove their worth as opposed to seeking quick rewards. He further commended Mopani for the initiative.

“It is important for local contractors to remain focused and concentrate on their core business. This is the only way the mining industry will benefit from their input as they become specialists in their fields.

“Shawonga Enterprises Limited has been consistent for over 22 years of operation and therefore gained the necessary recognition from the players in the industry to a point where we are now able to contribute positively to the growth of the industry.

“I would like to commend Mopani for supporting such ventures as they create sustainable growth and support for the mining industry which can then be passed on from generation to generation. This is good not only for the mining industry, but the country as a whole especially that such specialised skills are getting fewer and fewer globally.

In order to promote efficiency in mining, Mopani is promoting other joint ventures between International world class contractors and solid, dependable local Zambian Contractors to form a Zambian owned, world-class mining contracting company by introducing expert skills and resources. This should lead to improved effectiveness and efficiency. The Company is further encouraging value addition and local procurement by empowering local manufacturers of various mining inputs such as cables, mill balls among other things.

Other local contractor development initiatives by Mopani include giving preference to local contractors before a tender can be extended to foreign contractors, Conducting capacity building workshops and trainings in addition to creating new business linkages for local contractors by assisting them to do business with other sister mines across the borders.

“Formation of joint venture partnerships, where Zambian companies take an equity stake, and add significant Zambian expertise to the newly formed company, create a win-win situation for all stakeholders. Empowering local contractors is a great step forward in developing the mining industry in Zambia in line with Government’s local content strategy,” Said Mr. Callow.

Source: Mining News Zambia
Corporate Announcements

ZCCM-IH | Renounceable Claw­back Rights Offer

RESULTS OF THE RENOUNCEABLE CLAW­BACK RIGHTS
OFFER

INTRODUCTION
ZCCM­IH shareholders are referred to the Declaration Announcement dated Friday, 11 April 2014, and the Finalisation Announcement dated Wednesday, 16 April 2014, as well as the Circular to Shareholders dated Monday, 12 May 2014, setting out the details of the ZCCM­IH Renounceable Claw­back Rights Offer of 8,920,957 “B” Ordinary Shares subscribed for by the National Pension Scheme Authority (“NAPSA”), on the basis of 4 (four) new Ordinary Shares for every 5 (five) Ordinary Shares already held as at the Record Date, Friday, 09 May 2014, at a subscription price of ZMW 29.23 per new Ordinary Share.
The Claw­back Rights Offer opened on Monday, 12 May 2014 and the closing date was extended from Friday, 13 June 2014 to Friday, 27 June 2014 following delays with the postal delivery of the Claw­back Rights Offer Circular document to shareholders. The extension was, therefore, necessitated by the need to ensure that all shareholders were given sufficient time and opportunity to take any one of the prescribed courses of action set out in the Circular.

RESULTS
The results of the Claw­back Rights Offer are as follows:

SUMMARY RESULTS Number of Claw‐Back
Rights Offer Shares		 Percentage of Claw‐Back
Rights Offer Shares
Claw‐back Rights Offer Shares available for subscription 8,920,957 100.0%
Total Claw‐back Rights Offer Shares subscribed for by minorities 651,545 7.3%
Claw‐back Rights Offer Shares allocated to NAPSA 8,269,412 92.7%

ISSUE OF CLAW­BACK RIGHTS OFFER SHARES
The new Claw­back Rights Offer Shares will be issued on Friday, 25 July 2014 and listed on the Lusaka Stock Exchange (“LuSE”) on Monday, 28 July 2014.

Qualifying Shareholders registered as such on the Record Date (or their renouncees), who validly subscribed for Claw­back Rights Offer Shares, will have their LuSE Central Shares Depository accounts credited with the new Ordinary Shares by Monday, 28 July 2014.

Lusaka, Zambia ­ 24 JULY 2014
Investee Company News

Metorex Chibuluma Mines to spend US$26 million for explorations, official

Metorex Mining Limited, the South African based mid-tier mining group plans to spend over US$26 million to undertake exploration activities at its Chibuluma mine in Zambia over the next two years, says a mine official.

General Manager Jack Sikamo said while the company already spent US$12.7 million in strategic capital expenditure from 2010 to 2013, more resources have been earmarked in capital expenditure for 2014 and 2015.

In a paper presented during a workshop in Lusaka for various stakeholders recently, Sikamo stated that the company is also looking for acquisitions, explorations and joint venture partnerships with local or foreign companies to expand its operations in the country.

However, the miner is facing key challenges in the operations of the mining companies, among others, falls of ground, copper price reduction and increasing cost of production.

Government legislation without engagement, current resources mined out by 2020, skills retention, underground collisions, men/machines, safety, supervisor safety culture, historically supervisor- dependent and equipment availability and reliability are other challenges facing Metorex Mining Limited, a company established in 1995.

Chibuluma mine, formerly under Zambia Consolidated Copper Mines (ZCCM) and which produced 18,000 metric tonnes of copper last year, is expected to ramp up production to 19,000 metric tons of the red metal this year.

Metorex, a fully, owned subsidiary of Jinchuan International, was created with a vision to expand and explore activities in African base metal industry, based primarily on copper and cobalt production.

The company employing over 3,700 employees, generated group gross revenue US$408 million on copper sales of 45,000 metric tons and 3,000 metric tons of cobalt in 2012. It seeks to increase its outturn despite the challenges faced.

Chibuluma Mines plc is a modern mechanized underground copper mine owned 85 percent by Jinchuan Group Company Limited and 15 percent by ZCCM-IH plc.

The planned extensive exploration work is expected to extend its mine life by several years and significantly increase its minable reserves of both cobalt and copper.

Metorex Mining Limited, the South African based mid-tier mining group plans to spend over US$26 million to undertake exploration activities at its Chibuluma mine in Zambia over the next two years, says a mine official.

General Manager Jack Sikamo said while the company already spent US$12.7 million in strategic capital expenditure from 2010 to 2013, more resources have been earmarked in capital expenditure for 2014 and 2015.

In a paper presented during a workshop in Lusaka for various stakeholders recently, Sikamo stated that the company is also looking for acquisitions, explorations and joint venture partnerships with local or foreign companies to expand its operations in the country.

However, the miner is facing key challenges in the operations of the mining companies, among others, falls of ground, copper price reduction and increasing cost of production.

Government legislation without engagement, current resources mined out by 2020, skills retention, underground collisions, men/machines, safety, supervisor safety culture, historically supervisor- dependent and equipment availability and reliability are other challenges facing Metorex Mining Limited, a company established in 1995.

Chibuluma mine, formerly under Zambia Consolidated Copper Mines (ZCCM) and which produced 18,000 metric tonnes of copper last year, is expected to ramp up production to 19,000 metric tons of the red metal this year.

Metorex, a fully, owned subsidiary of Jinchuan International, was created with a vision to expand and explore activities in African base metal industry, based primarily on copper and cobalt production.

The company employing over 3,700 employees, generated group gross revenue US$408 million on copper sales of 45,000 metric tons and 3,000 metric tons of cobalt in 2012. It seeks to increase its outturn despite the challenges faced.

Chibuluma Mines plc is a modern mechanized underground copper mine 85 percent owned by Jinchuan Group Company Limited and 15 percent by ZCCM-IH plc.

The planned extensive exploration work is expected to extend its mine life by several years and significantly increase its minable reserves of both cobalt and copper.

Source: Mining News Zambia