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Annual Report Summaries

Maamba Colliers LTD Extract from 2018 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of K1,172.00 million (US$122.73 million) for the year ending 31st March 2018 [(2017: K100.38 (US$10.18 million)] and had profit after tax of K148.87 million (US$15.59 million) [(2017:K211.2 million (US$2.15 million)]. The increase in revenue and profits was due to the recording of all revenue and costs from the Thermal Power Plant from the commercial operating date in August 2017. The company’s assets exceeded its liabilities by K1,172.1 million (US$123.50 million) as at 31st March 2018 (2017: K1,037.1 million (US$107.92 million). Additionally, the company had accumulated losses amounting to K675 million (US$70.69 million) [(2017: K842.72million (US$87.69 million)].

During the year under review, the 300MW Thermal Power Plant together with the 330kV Transmission Line and Kariba Water Pumping System were taken over from the respective Engineering, Procurement and Construction (EPC) Contractors by MCL. MCL is now operating and maintaining the facilities through its Operations and Maintenance (O&M) Contractor.

MCL extracted 530,030 tonnes of high grade coal (2017: 355,126 tonnes) and 120,893 tonnes of low grade coal (2017: 188,325 tonnes). Coal transported to the Power Plant was at 1,076,216 tonnes (2017: 555,810 tonnes). The Coal Handling and Processing Plant throughput was at 168,934 tonnes (2017: 199,487 tonnes).

The revenue and financial position of the company is expected to improve going forward given the commissioning of the Thermal Power Plant.

There were no dividends declared during the year under review (2017: Nil).
Annual Report Summaries

Kansanshi Mining Plc Extract from 2018 Annual Report

Kansanshi Mining Plc (KMP) had sales revenue of K15.66 billion (US$1.64 billion) [(2016: K 14.51 billion US$1.5 billion)] for the financial year ended 31st December 2017. Gross profit of K6,263.65 million (US$656 million) was higher than that the K1,929.18 million (US$188 million) reported in 2016 on a combination of the increase in sales revenues and lower operating costs.

Copper production for the financial year ended 31st December 2017 was 250,801 tonnes, 1% lower than 2016 (253,272 tonnes) primarily due to lower plant recovery on the sulphide circuit, reflecting the drive to improve the concentrate quality and treatment of weathered material and lower copper recovery on the oxide circuit caused by changes in the ore mineralogy. Copper production was also impacted by reduced mixed final tails processed through the leaching circuit before and during the third quarter smelter shutdown to manage the onsite acid inventory.

Gold production was 140,595 ounces, about 5% lower than in 2016 mainly due to lower concentrate production. AISC (All-in Sustaining Cost) of $1.54 per lb. was $0.03 per lb. lower than 2016. Higher deferred stripping and royalties, treatment and refining charges and a lower gold by-product credit were offset by a credit to site administration costs. The credit followed a review of recoverable costs and operational provisions in the second and third quarters. Higher royalty costs resulted from higher royalty rates, which range from 4% to 6% depending on the underlying copper price.

The Kansanshi Smelter achieved record production and throughput in 2017, having treated 1,211,740 DMT (Dry Metric Tonnes) of concentrate, a 6% increase over 2016 despite the planned third quarter shutdown. Production totalled 297,553 tonnes of copper anode and 1,128,000 tonnes of sulphuric acid, each 16% and 2% higher respectively than 2016. The quality of concentrate treated improved significantly with over 26% copper in concentrate grade compared to 23% recorded during 2016. The overall copper recovery rate achieved was 96%. Production in 2018 is expected to be approximately 240,000 tonnes of copper, and approximately 145,000 ounces of gold. The High Pressure Leach circuit is expected to be in operation throughout 2018, with a 70-day planned maintenance shutdown for relining expected to occur during the second and third quarter of 2018.

At the Board meeting held on 22 March 2018, the Directors proposed dividend payments of K740 million (US$78 million), split as K180 million (US$19 million) related to the year-end 31st December 2016 and K560 million (US$59 million) for the year ended 31st December 2017.
Annual Report Summaries

CNMC Luanshya Copper Mines Extract from 2018 Annual Report

CNMC Luanshya Copper Mines Plc (CNMC) recorded a turnover of K2,559 million (US$268 million) for the year ended 31st December 2017 (2016: K1,701 million (US$172 million). The profit after tax was K 353 million (US$37 million) (2016: K3.79 million (US$ 0.397 million loss)).

CNMC planned to produce 33,000 tonnes of copper in 2017, the actual volume produced was 43,177 tonnes as a result of increased mined volumes at Muliashi mine. Baluba mine remained under care and maintenance during the year with the total care and maintenance costs being K121.26 million (US$12.9 million) in 2017. Works to bring it back into production commenced in the first quarter of 2018.

There were no dividends declared during the year under review (2016: Nil).

Corporate Announcements

ZCCM-IH | Appointment of Board Chairman

In accordance with Section 3.59 of the Lusaka Securities Exchange Listings Requirements, ZCCM Investments Holding Plc (ZCCM-IH) is pleased to announce the appointment of Mr. Eric Suwilanji Silwamba, SC as Board Chairman of the Company effective 6 March 2018.

Mr Silwamba is the Principal Partner at Messrs Eric Silwamba, Jalasi and Linyama Legal Practitioners. He holds a Bachelor of Laws Degree with Merit (LL.B) from the University of Zambia. Mr Silwamba is an Advocate of the High Court of Zambia enjoying the rank and dignity of State Counsel. He has over 30 years’ extensive experience in both private and public practice. Mr Silwamba was elected Member of Parliament for Ndola Central Parliamentary Constituency in October 1991 and was re-elected in 1996 and 2001. He served in very senior positions in government including as former Deputy Minister of Information and Broadcasting Services, Deputy Minister (Special Duties) Office of the President, Minister of Presidential Affairs and Minister of Justice and Government Chief Whip. Mr. Silwamba has had the opportunity of handling some of the most complex and high-profile litigation in Zambia that relate to mining, commercial law, tax, administrative, criminal and constitutional law. He is also a member of the Chartered Institute of Arbitrators of the United Kingdom and a qualified legal draftsperson.

By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on Thursday, 29th March 2018

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
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Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on Thursday, 29th March 2018

Industry News

Electric vehicles are poised to unleash a cobalt boom

EACH new electric vehicle (EV) uses about 10kg (22 lbs) of cobalt. More than half of the world’s reserves and production of the metal are in one dangerously unstable country, the Democratic Republic of Congo. Moreover, four-fifths of the cobalt sulphates and oxides used to make the cathodes for lithium-ion batteries are refined in China. China has already proven willing to restrict exports of rare-earth metals to foreign firms. And although China is not thought to be cornering or manipulating the market for cobalt, growing global demand has still sent the the element’s price soaring.

Non-Chinese battery manufacturers have already begun looking for ways to protect themselves from potential shortages. Their best answer to date is another metal closely associated with cobalt: nickel. Some firms are now producing cobalt-lite cathodes, by raising the nickel content to as much as eight times the amount of cobalt. This allows the battery to run longer on a single charge—but also increases the risk it will burst into flames. So far, the price of nickel has remained flat. But according to McKinsey, a consultancy, by 2025 EV-related demand for nickel is expected to rise 16-fold.

Source: The Economist
Annual Report Summaries

CEC Africa Extract from 2018 Annual Report

Revenue for year ended 31st December 2017 largely remained relatively flat at K2,070.2 million (US$216.8 million), a 6% decrease from the previous year. This is despite the slight improvement in billing efficiency at Abuja Electricity Distribution Company Plc (AEDC) on the back of low energy supply growth.

The company incurred a net loss for the year ended 31 December 2017 of K2,578.5 million (US$270.05 million) [(2016: Loss K 942.73 million (US$91.87 million)] and, at that date the company’s total liabilities exceeded total assets by K3,171.58 million (US$318.65 million) [(2016: K479.58 million (US$48.60 million)]and the current liabilities exceeded its current assets by K6,279.87 million (US$631.00 million) (2016: K3,331.73 million US$337.63 million).

The Group continued to expend significant effort to further restructure the US Dollar denominated acquisition finance facility that was obtained from UBA to finance the acquisition of 60% of AEDC through KANN Utility Company Limited (KANN). Interest payments on the facility are current.
In Nigeria, the implementation of the Power Sector Recovery Program (PSRP) commenced signalling the commitment of the Federal Government to ensure commercial viability of the entire power sector value chain, including, ultimately delivering optimal benefit to the end users. In the short to medium term, it is expected that the application of the PSRP principles will turn the CEC Africa asset, the Abuja Electricity Distribution Company Plc (AEDC) into a profit making entity.

No dividends were declared and paid by the Company during the year (2016: Nil).

Corporate Announcements

ZCCM-IH | Further Cautionary renewal

ZCCM Investments Holdings PLC’s (“ZCCM-IH”) Legal Proceedings against First Quantum Minerals Limited, FQM Finance Limited, Philip K.R. Pascall, Arthur Mathias Pascall, Clive Newall, Martin R. Rowley and Kansanshi Mining PLC.

On 28 October 2016, ZCCM-IH commenced Legal Proceedings in the High Court of Zambia against First Quantum Minerals Limited, FQM Finance Limited, Philip K.R. Pascall, Arthur Mathias Pascall, Clive Newall, Martin R. Rowley and Kansanshi Mining PLC for various Claims arising from transactions between Kansanshi Mining Plc and FQM Finance Limited. The Defendants applied to set aside the Writ of Summons and Statement of Claim for irregularity (“the Defendants’ Applications”).

Further to the Cautionary Renewal released by ZCCM-IH on 14th November 2017 and in compliance with the requirements of the Securities Act No 41 of 2016 and the General Obligations of Disclosure under the Continuing Obligations of the Listings Requirements of the Lusaka Securities Exchange , shareholders are informed that on 25th January 2018, the High Court dismissed the Defendant’s Applications . Shareholders will be updated of any further developments regarding the proceedings.

Shareholders of ZCCM-IH are accordingly advised to exercise caution when dealing in securities of the Company until further information is published.

By Order of the Board
Chabby Chabala
Company Secretary


Issued in Lusaka, Zambia on 6 February 2018

Lusaka Securities Exchange Sponsoring Broker
T | +260-211-232456
E | advisory@sbz.com.zm
W | www.sbz.com.zm
Stockbrokers Zambia Limited (SBZ) is a founder member of the Lusaka Securities Exchange and is regulated by the Securities and Exchange Commission of Zambia

First Issued on 1 November 2016

Investee Company News

50 families to pave way for 600m Masaiti Cement Plant

ABOUT 50 Households are expected to be displaced to pave way for the construction of a US$600 million dollar Cement factory in Masaiti District on the Copperbelt Province.
ZCCM Investment Holding (IH) Cement Stirring Committee Chairperson.

Mwila Lumbwe said ZCCM-IH is partnering with Central African Cement Limited which is spearheading the development of the project in Masaiti.

In July last year, President Edgar Lungu graced the ground breaking ceremony of the $600 million cement project.

Mr Lumbwe said the project that would take 36 months to complete, would create a thousand jobs in various fields during construction phase and after completion, 400 permanent jobs would be created.

“It is our hope that the people in Chief Chiwala’s area will benefit from the new opportunities that will be created by Central African Cement,” he said.

Mr Lumbwe said the 47 households that would be displaced were in the factory area adding that others that farmed in the same area, would also be compensated, and the value minimum for construction for each house hold would be K108, 000.

He also said the project was said to revive Ndola Lime with the intention of having Ndola Lime supply Lime stone which was the basic product which would help in Cement production.

Mr Lumbwe said it would significantly enhance the capacity of Ndola Lime Company.

He said the Cement factory was one of a few real value added industries in the country because a lot of other products were imported.

Mr Lumbwe said it would enhance value chain in terms of procurement because lime stone would be procured from Ndola Lime while gemstone procured from a gemstone supplier in Mpika which would locally enhance business climate on the Copperbelt.

He said essentially the plant would generate 57 mega watts of power which would be significant for the Zambian economy.

Mr Lumbwe said the plant would use 20 mega watts leaving a surplus of 38 mega watts which would be released into the grid and possibly exported, adding that the plant would bring opportunities for the Zambian economy at large.

Copperbelt Permanent Secretary Bright Nundwe said the factory would sit 75 hectares adding that no one would be affected in terms of displacement and decent houses would be built for them before relocation.

“This is a very good project, but the moment someone starts mourning it will be bad so there must be proper issues of significant planning.

Before a machine lands on any piece of land, ensure that the people displaced have where to go. Make sure the people are excited and not mistreated,” he said.

Mr Nundwe further added that the project should be well sustained and in order because Copperbelt was the heartbeat of Zambia.

Source: Times of Zambia
Investee Company News

CNMC Luanshya Copper Mine to pump US$13 million to reopen Baluba Mine

China Nonferrous Mining Corporation Luanshya Copper Mine says US$ 13 million will be pumped into the reopening of Baluba mine.

CNMC Luanshya Copper Mine Deputy Chief Executive Officer, Wang Jingjun said the firm was looking forward to reopen Baluba mine this year after the increase in copper prices on the international market.

Mr. Wang has stated that the reopening of Baluba mine will be enhanced by concerted efforts with the government and the community of Luanshya town.

He has appealed to members of the public to take time to understand and appreciate the challenges the mining company was facing such us increment in the price of sulphuric acid, electricity tariffs by Copperbelt Energy Corporation and paying back of the loan especially now that the operations of Baluba mine were about to resume.

And Luanshya Mayor Nathan Chanda is happy with china nonferrous Mining Corporation, Luanshya copper mine’s plans to reopen Baluba mine in 2018.

Speaking during a meeting with CNMC Luanshya Copper Mine Deputy Chief Executive Officer, Wang Jingjun held at the Mine’s Head Office in Luanshya on Thursday, Mr. Chanda has called on CNMC Luanshya copper mines to support local suppliers and contractors once Baluba opens.

Mr Chanda also urged the mine to employ as many local people as possible in the Baluba mine workforce and first consider all those who are on forced leave and those who may had left on voluntary separation scheme.

Source: Lusaka Times

Industry News

Audit of investments welcomed

The Mine Suppliers and Contractors Association of Zambia says it supports intentions by Government to launch an investment monitoring policy to audit levels of investment and production of mineral resources.

Association President Augustine Mubanga says the move is progressive and will help boost the mining sectors contribution to the national treasury.

Mr. Mubanga told ZNBC News in Kitwe that the country will only derive maximum benefits from its mineral wealth if adequate measures are put in place to monitor the activities of investors.

He said local suppliers and contractors have been side-lined by some mine conglomerates in the awarding of contracts in preference to foreign entities.

During a media briefing, Copperbelt Province Minister Bowman Lusambo indicated that most mining companies have NOT been making significant investments in their areas of operations.

This follows reports that some named mining firms are abandoning their capital projects to illegally mine from the dump sites left by the defunct Zambia Consolidated Copper Mines-ZCCM.

Source: ZNBC