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)
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)].
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).
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).
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)]
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)
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).
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).
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.
When ZCCM IH announced that it forecast that the Earnings Per Share (“EPS”) for the Group and Company financial year ended 31 March 2019 were expected to be approximately 47% and 125% respectively, lower than the financial year ended 31 March 2018, Financial Insight predicted that Investors in the company would be keen to know which investments were likely to be the cause in the erosion in value.
Although the latest SENS announcement published on 13th December 2019 advises shareholders that investee company’s underperformance by way of impairment, it does not mention which companies these are.
CEO Mabvuto Chipata
If an investor were to follow the bread crumbs, the obvious place to start would be the 2018 annual report which was released at the Annual General Meeting in January 2019 by the former CEO Dr. Pius Kasolo who was subsequently replaced by the Chief Investment Officer Mabvuto Chipata.
Mr. Chipata, who was then responsible for all the 17 investee companies knows that the group has struggled to prop up Ndola Lime’s performance. According to the 2018 annual report, the Ndola Lime LC investment reported total revenues for the financial year ended 31st March 2018 of K60.1 million and realized a loss after tax of K190 million. The reason for this weak performance was below budget sales figures, huge financial costs and penalties on overdue statutory obligations.
Furthermore, the plant suffered a major setback which Mr. Chipata lamented about when he spoke to the founder of Financial Insight in January 2019 in an exclusive interview when he was asked regarding the 21st September 2017 Vertical Kiln 2 (VK2) incident where it was engulfed in flames. This particular incident damaged several components of the kiln, rendering it dysfunctional. The setback was immense considering VK1 had just undergone refurbishments to its refractory bricks but could not be fired up due to NLC’s lack of working capital which inevitability led to the grounding of production.
Another struggling asset is the Investrust Bank Plc investment. The last annual report indicated that the Bank had recorded a 19.9% decrease in net interest income to K48.91 million during the year ended 31st December 2017 compared to K40.82 million in 2016. Hereafter ZCCM-IH increased its shareholding in Investrust from 45.4% to 71.4% through mandatory offer that commenced on 9th April 2018 and closed on 30th April 2018. With a commanding position in the boardroom, the 2019 performance will be interesting to see when ZCCM IH announces the investee companies’ individual performance.
A glitzy investment that will have investors pondering over is the Kariba Minerals Limited investment who reported back to back net losses for 2018 and 2017 of K17.18 million and K20.64 million respectively. Investors will remember that in February 2018 in Jaipur, India, KML held an auction at which a total of 3.35 tonnes of high-grade amethyst valued at US$270,000 was sold. For this investment, the introduction of new grading levels at auctions appears to be a source of additional value creation as the appetite for varying grades of the rare gems increases.
Its investment in the energy sector will also be under scrutiny. ZCCM IH’s associate company, CEC Africa Investment’s Limited suffered a net loss for the year ended 31 December 2017 of K2,578.5 million and has liabilities that exceed total assets by K3.171.58 raising the issue of going concern. This underperformance has been largely attributed to the wrath of the Naira (macroeconomic environment) and electricity regulation still work in progress.
Chairman E Silwamba SC.
Insiders indicate that the Annual General Meeting for the investment company is scheduled for Q1 2020 which will give investors in the company an opportunity to probe the Eric Suwilanji Silwamba, SC led board.
