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KCM Liquidator stays as Vedanta’s petition to have him removed is rejected

The tribunal appointed in the arbitration proceedings in the matter of Vedanta versus ZCCH-IH which were commenced by the former, has rejected the application for the withdrawal of the matter as well as the removal of the liquidator, according to a statement from ZCCM-IH.

“Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcements dated 23 May 2019, concerning the filing by ZCCM-IH of a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”), the appointment by the Court of Mr. Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”) and the legal proceedings commenced in the High Court of South Africa and applications made to the Zambian High Court by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”)”, read a statement authorized by order of the Board issued by Company Secretary Chabby Chabala on 1st April 2020. “In compliance with the requirements of the Securities Act No. 41 of 2016, shareholders are informed that on 23 March 2020, the tribunal appointed in arbitration proceedings commenced by Vedanta against ZCCM-IH dismissed an application by Vedanta for an interim measure requiring ZCCM-IH to withdraw the Petition and procure the removal of the Provisional Liquidator from office”.

ZCCM-IH has indicated it will provide details of these proceedings in due course. KCM is currently under provisional liquidation, a process that was initiated by ZCCM-IH, a minority shareholder, which presented a petition for compulsory liquidation in the High Court on 21st May, 2019.

A comprehensive Ministerial statement on the petition was provided by Minister of Mines and Minerals Development, Richard Musukwa to Zambia’s parliament following the appointment of the liquidator.

“The petition included an application for the appointment of a provisional liquidator”, read the Minister’s statement. “The appointment of a provisional liquidator was necessitated by the need to protect assets in the interim period between the presentation of the petition and the determination of the matter”.

Prior to the petition application, the Minister stated that there was a technical audit that was conducted on the mine by a multifaceted team of professionals. “The audit was conducted by a technical audit committee appointed by the Government comprising experts in mineral resources management, mineral processing, governance, labour issues, mining engineers and business administrators including lawyers from various institutions such as the Government, academia, the legal profession, industry and various universities in our country”.

The technical team revealed the following areas of concern regarding the financial and operational health of Zambia’s wettest mine:

  • High Indebtedness and Threat of Insolvency
  • Non-Compliance to the Commitment to Bring In Foreign Direct Investment (FDI)
  • Lack of Investment to Develop New Ore Sources
  • Failure to Adopt Cost-Effective Means of Production
  • Lack of a Strategic Plan to Improve Operations at KCM

As the matter continues to play out, the Mines Minister’s message remains consistent. In February 2020, at the annual Cape Town Mining Indaba, he reiterated some of the challenges the country had faced with investor. “Zambia is a victim and it needs support. Vedanta Resources pledged to put in $300 million (R4.44 billion) they further pledged $500m and another $250m they did not bring that money”, read an extract from his response regarding the KCM debacle.

Source: Financial Insight Zambia
Investee Companies, Investee Company News

Govt grounds Luanshya Copper Mines

By BENNIE MUNDANDO
MY ministry has suspended all mining operations by Luanshya Copper Mines including ground clearing in the Roan Basin until the mine meets all the conditions of approval of the project, Mines Minister Richard Musukwa has said.
Mr. Musukwa told the Sunday Nation that the Roan Basin Pit is part of the five open pits comprising ore sources for the Muliashi Copper Project of LCM.
He said the other four open pits were Muliashi North Pit, Muliashi South Pit, Baluba East Pit, and Baluba Central Pit.
He said the Roan Basin Pit Site is overlain with critical surface infrastructure that includes the Cricket Club, the Tennis Club and lies in close proximity to the main General Offices, soccer field and residential houses.
He said the Zambia Environmental Management Agency (ZEMA), with input from Mines Safety Department, approved the Muliashi Copper Project by CLM through a letter dated November 10, 2010.
He said the project was approved subject to, amongst other conditions, that “CNMC Luanshya Copper Mines Plc shall not implement mining of the Roan Basin which was close to the general offices for the company and the residential areas within the Town Centre without submitting a specific plan that shall be approved by relevant authorities.”
“With total disregard of the condition in the Decision Letter, management commenced clearing the site for the Roan Basin Open Pit and in the process disturbed some surface infrastructure such as the Cricket Club and the Basketball Court. Management’s explanation for this action was that they first wanted to clear the surface area and not to commence mining operations.
“They further claimed that they wanted to ward off the illegal miners by maintaining their presence on the ground. The truth of the matter is that clearing of the ground is commencement of project implementation. The company is in clear breach of the condition of approval of the project by the Zambia Environmental Management Agency,” Mr. Musukwa said.
He said for this reason, the ministry had suspended all mining operations, including ground clearing in the Roan Basin, until the mine meets all the conditions of approval of the project.
“Further, appropriate sanctions (penalties) will be applied on the mine as provided for under the Mines and Minerals Development Act in addition to sanctions to be applied by the Zambia Environmental Management Agency,” Mr Musukwa said.

Source: Daily Nation
Investee Companies, Investee Company News

Kansanshi Mine donates 61,650 books to be distributed to school children in Solwezi

FQM’s Kansanshi Mine today unveiled 61,650 books made up of textbooks and leisure reading books to be distributed to school children in Solwezi. North Western Provincial minister Hon. Mubukwanu commended the mine for uplifting education standards in Solwezi and said the books would keep our children busy while their schools remain closed due to the COVID-19 pandemic. #FQMinvestsineducation.
Investee Companies, Investee Company News

MINING OPERATIONS SUSPENDED

By Robert Mwanza:

Government has suspended mining activities at the Roan Basin CNMC-Luanshya copper Mines PLC.

Mines Minister Richard Musukwa says this is because the firm has not met all the conditions of approval of the project.

Mr. Musukwa says it is sad that the firm had started to carry out some activities even before the project is fully approved.

To this effect, Mr. Musukwa says appropriate sanctions will be mated out on the mining company by Government.

In a statement to ZNBC News today, The Minister said with total disregard of the conditions, management started clearing the site for the roan basin open pit and in the process disturbed some surface infrastructure such as the cricket club and the basketball court.

However, management’s explanation for the action is that the firm wanted to clear the surface area and not to start mining operations.

According to the production projections submitted to the Ministry of Mines and Mineral Development, Mining of the Roan Basin is scheduled to start towards the end of the Muliashi Project in 2025.

Source: ZNBC
Investee Companies, Investee Company News

Mopani Copper Mines to review spending in the midst of the coronavirus threat

Mopani Copper Mines, a Zambia subsidiary of Glencore is set to do a comprehensive review which aims to minimise cash outflow to guard against uncertainty caused by the threat of coronavirus

“The rapid decline in the price of copper due to the impact of COVID-19 has now placed significant additional pressure on Mopani’s operations,” the company said in a statement.

Copper prices are set for their worst week since 2011 after sliding 10% so far.

The metal, often referred to as “Dr Copper” because it acts as a bellwether for the global economy, has been hit hard by the global slowdown caused by coronavirus.

Mopani said the review would give it the necessary financial flexibility to navigate the downturn.

The miner also said it had plans in place to reduce the risk of disruption to its operations from coronavirus. Several mines in Peru and one in Canada have shut due to the pandemic.

Mopani Copper Mines, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm ZCCM-IH.

Source: Zambia Mining Magazine
Investee Companies, Investee Company News

CEC | Post-BSA Market Announcement

In accordance with Section 81(1) of the Securities Act No. 41 of 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC” or “the Company”) advises the Company’s shareholders, and the market, that further to the Market Announcement issued by the Company on 2nd January 2020, the power purchase agreement or Bulk Supply Agreement (“BSA”) between CEC and ZESCO Limited (“ZESCO”), entered into on 21 November 1997 came to an end on Tuesday, 31st March 2020.

In the last circa seven weeks, CEC and a Government of the Republic of Zambia (“GRZ”) team which included ZESCO have been engaged in negotiations for a new power supply agreement. While the initial understanding was that the parties would work to put in place an interim agreement, it became clear during the negotiations that the intention was to agree a wholesomely new agreement with totally different terms. CEC believes that throughout the negotiation, it held its end of approaching the negotiations in good faith. At end of day on 31st March 2020, the parties had not reached agreement on account of certain terms seen as key requirements from either side and which so far are not acceptable to either party. On its part, CEC has faced some terms being demanded by the GRZ team which, if accepted, would be injurious to the CEC business and impact its ability to continue operating as a going concern.

In CEC’s view, achieving a mutually acceptable power supply agreement between the parties remains of strategic importance to the electricity sector and the country. Therefore, CEC remains confident that the parties will use the next several weeks to narrow the negotiation gap so as to achieve the much required new power supply agreement between them.

CEC wishes to assure its shareholders and all stakeholders that it will do its best to ensure that any agreement it enters into will be negotiated in good faith and reflect a fair outcome so as to ensure the business continues to operate as a going concern thereafter.

It is CEC’s understanding that in the meantime, both CEC and ZESCO remain committed to continue meeting their full obligations to their customers without service being affected in any way. On its part, CEC reiterates its total commitment to continue providing seamless power supply services to all its customers (mining and non-mining consumers) on the Copperbelt while the parties continue to seek resolution of the outstanding matters and follow through with conclusion of the negotiation for a new power supply agreement.

By Order of the Board

Julia C Z Chaila
Company Secretary

Issued in Lusaka, Zambia on Wednesday, 1st April 2020
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Konkola Copper Mines supports fight against Coronavirus

CHINGOLA, 31 March 2020: Konkola Copper Mines (KCM) has provided two clinics in Chingola and Chililabombwe, as holding centres for people who will be suspected to have Coronavirus (COVID-19) in the two districts, and one million two hundred thousand kwacha (K1.2 million) for medical equipment and supplies.

Acting Konkola Copper Mines General Manager Corporate Affairs Shapi Shachinda said the Nchanga South Clinic in Chingola will have a bed capacity of 28 with a possibility of putting up tents on the premises in order to increase capacity in the event of overwhelming numbers, while Clinic 5 in Chililabombwe will initially have at least 5 beds.

The two facilities will be handed to the Ministry of Health in the interim period as holding centres for future COVID-19 suspected cases and will be reverted to normal medical use as Out-patient facilities for KCM once the war against COVID-19 is won.

Mr Shachinda commented: ‘KCM is opening up the two clinics for purposes of holding people who will in the future be suspected to have the Coronavirus, while awaiting their transfer to the main Government isolation centre on the Copperbelt in Masaiti district. The company will also release K1.2 million for procurement of medical equipment and supplies.’

KCM will procure equipment such as ventilators, oxygen concentrators, data scopes, autoclaving machine, incinerator, hand-washing facilities for use during the fight against COVID-19, he said.

Konkola Copper Mines is supporting efforts by the new District Commissioner for Chingola, the Government’s and KCM medical teams to prepare for the management of any reported and confirmed cases of Coronavirus.

‘We have a huge responsibility as a corporate citizen to support the Government’s broader plans to protect people from contracting Coronavirus and to fight the virus in the event that some people would have contracted it in the future,’ Mr Shachinda said.

Konkola Copper Mines has put in place communication protocols to educate and enlighten more than 12,000 permanent employees and those working for its business partners on the prevention of COVID-19, including providing sanitizers in operational areas. The company has printed posters and banners in English and local languages with key messaging, and some of the initiatives will be rolled out to communities in the company’s areas of operation.

Source: Market Screener
All Posts, Industry News, ZCCM-IH, ZCCM-IH News

Mining firms in Zambia welcome tax relief measures

LUSAKA, March 31 (Xinhua) — Mining firms in Zambia on Tuesday welcomed the government’s decision to suspend export duty on precious metals and import duty on mineral concentrates in order to cushion the mining sector.

Last Friday, Finance Minister Bwalya Ng’andu announced that the government will suspend export duty on precious metals and import duty on mineral concentrates to cushion the mining sector.

The Zambia Chamber of Mines, an association of mining firms, said the move was the first step in the direction that must necessarily lead to a broader relief package similar to that being deployed by other countries in the face of the coronavirus.

“The value of this announcement is greatly geared towards making better use of latent tertiary ore smelting and refining capacity while the bulk of the industry’s core primary mining and metallurgical processing continues to need cashflow relief to make it through this fight for survival,” Sokwani Chilembo, the chief executive officer of the association said.

He said the response was a crucial recognition on the part of government that it must change tack from its prior focus on raising taxes at all costs.

Zambia, Africa’s second largest copper producer, introduced the taxes which came into effect in January 2020. Mining firms rejected the taxes saying they will kill the industry.

Analysts have since welcomed the government’s decision saying it will bring relief to the mining sector.

Source: Xinhua
Investee Companies, Investee Company News

KCM Joins Covid 19 Fight

ZANIS—Konkola Copper Mines (KCM) has set aside K1.2 million for stocking all consumables and supplies that will be used in the fight against coronavirus at Nchanga South Clinic which the mining company has surrendered to government as a quarantine centre for suspected case of the deadly virus.

KCM acting General Manager Corporate Affairs Shapi Shachinda said the mining firm has decided to offer the facility to government during this period until the COVID 19 cases are over.

Mr. Shachinda told ZANIS that the funds released will be used to ensure that the facility has all the supplies needed.

He said the facility, which was an outpatient department for the mining firm, will be used as a quarantine centre for COVID 19 suspected cases in a bid to fight the pandemic.

He explained that additionally, KCM has also put up activities to sensitise workers on precautionary measures to combat the further spread of the coronavirus.

And Chingola District Commissioner Agnes Tonga, who toured the facility, has thanked KCM for supplementing government’s efforts in fighting COVID 19.

Ms. Tonga added that if all stakeholders could emulate KCM by partnering with government, the deadly disease can be contained.

Source: ZNBC
All Posts, Industry News, ZCCM-IH News

Effects of COVID-19 Disease on the Zambian Mining Industry

ZCCM Investments Holdings Plc (ZCCM-IH) has said that the company intends to appeal against the Ruling of the Lusaka High Court delivered on 23 March 2020 regarding a matter the firm commenced in 2016, against First Quantum Minerals Limited (FQM Ltd), FQM Finance Limited, Philip Pascall, Arthur Mathias Pascall, Clive Newall, Martin Rowley, and Kansanshi Mining Plc.

In a statement released to the media, ZCCM-IH said that the defendants’ conduct, allegedly, among others, that the defendants on several occasions fraudulently engaged in transactions totaling in excess of $2 billion for the benefit of the FQM Group, is detrimental to ZCCM-IH’s interests and those of the nation, and remained committed to protecting the said interests, adding that it will be appealing against the Ruling.

In 2016, ZCCM-IH started the process of claiming up to $1.4 billion from First Quantum Minerals Ltd accusing the firm of engaging in fraud. The claim included $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, 2016.

ZCCM-IH 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.

In papers filed in the Lusaka High Court on Oct. 28 2016, ZCCM-IH said that First Quantum used the money as cheap financing for its other operations.

ZCCM-IH is triple listed on 3 stock exchanges: the Lusaka Securities Exchange (Primary listing) and on the London Stock Exchange and the Euronext Access (Paris – Marche Libre) (Secondary Listings).

Government holds directly 17.25% shares and its 60.28% shares is held through the Industrial development Corporation (IDC) in Zambia, with the remaining 22.47% held by institutional and private individual shareholders.

ZCCM-IH currently has an investment portfolio of 22 companies, including Kansanshi Mining Plc (20%), Mopani Copper Mines Plc (10%) and Konkola Copper Mines Plc (20.6). Its shareholdings in these companies range from 10% to 100%, with commodities and services that are diversified in nature, including copper, gold, cobalt, coal and power, limestone, mining consultancy, financial services and gemstones.

Source: Lusaka Times