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Industry News

Mining investment audit coming

Government will launch an investment monitoring policy to audit the levels of investments recorded in the mining sector on the Cooperbelt.

This follows reports of some named mines abandoning their projects to illegally mine from the dump sites left by Zambia consolidated Copper Mines -ZCCM.

Copperbelt Minister Bowman Lusambo says Government has observed that most mining companies have not made significant investments in their areas of operations.

Mr Lusambo says this is why some mining companies are clearing waste famously known as black mountain left by the defunct ZCCM instead of producing from their areas of investment.

He said the audit to be carried out jointly by the Ministry of Mines and Commerce will establish the levels of foreign direct investment into the sector on the Copperbelt.

Mr. Lusambo said this at a media briefing in Ndola.

Meanwhile, Mr Lusambo has urged mining companies to compel all foreign contractors to partner with Zambians in local business transactions.

Mr Lusambo said it is not right for mining companies to offer businesses to foreign contractors at the expense of local suppliers and contractors.

Source: ZNBC

Industry News

Gold mining to create jobs

Ministry of Commerce Permanent Secretary Kayula Siame says the formalization of illegal gold mining in Rufunsa will bring about economic development and job creation amongst youths in the country.

Ms. Siame says Zambians have been left out in the mining of various minerals in the country and that time has come for the locals to benefit from their God given natural resources.

She was speaking when she presented cooperative certificates to three newly formed mining cooperatives in Rufunsa.

Ms. Siame said illegal mining has also robbed the country a lot of money in taxes.

She said government wants Zambians to benefit from their resources unlike the current situation where foreigners are getting everything.

And ministry of mines permanent secretary Paul Chanda said Zambians should take advantage of government’s new mining policies to register their firms for them to participate in the mining industry.

Mr. Chanda said government will empower the newly formed cooperatives with equipment and capital for them to be producing reflectively.

He said government though the ZCCM-IH will also provide market for the minerals so that miners would not labour to look for market.

And earlier registrar of cooperatives Justin Mwansa said the formation of cooperatives by small mining entities will improve capacity building and enhance productivity.

Mr. Mwansa called for more miners to come up with cooperatives so that dividends can remain in the country.

Source: ZNBC

Industry News

Rufunsa Mine can create jobs

Ministry of Commerce Permanent Secretary Kayula Siame says the formalization of illegal gold mining in Rufunsa will bring about economic development and job creation amongst the youths.

Speaking when she presented cooperative certificates to three newly formed mining cooperatives in Rufunsa, Ms Siame said Zambians have been left out in the mining of various minerals in the country and that time has come for the locals to benefit from their God given natural resources.

Ms. Siame said illegal mining has also robbed the country a lot of money in taxes.

She says government wants Zambians to benefit from their resources unlike the current situation where foreigners are getting everything.

And ministry of mines permanent secretary Paul Chanda said Zambians should take advantage of government’s new mining policies to register their firms for them to participate in the mining industry.

Mr. Chanda said government will empower the newly formed cooperatives with equipment and capital for them to be producing effectively.

He said government though the ZCCM-IH will also provide market for the minerals so that miners would not labour to look for market.

Earlier registrar of cooperatives Justin Mwansa said the formation of cooperatives by small mining entities will improve capacity and enhance productivity.

Mr. Mwansa called for more miners to come up with cooperatives so that dividends can remain in the country.

Source: ZNBC

Corporate Announcements

ZCCM-IH | Directors’ Interim Summary for Period Ended 30th September 2017

Introduction

In compliance with the requirements of the “Securities Act, Cap 354 of the Laws of Zambia” and the Listing Rules of the Lusaka Securities Exchange, ZCCM Investments Holdings Plc (ZCCM-IH) announces the unaudited results for the six months’ period ended 30th September 2017.

Financial Performance

The Group recorded a turnover of K37.7 million for the six-month period ended 30th September 2017 which was 42% below the turnover of K65.5 million reported during the six months to 30th September 2016. The lower Group turnover was mainly as a result of a decrease in turnover for Ndola Lime Company Limited by 41% from K62.5 million to K36.7 million for the period under review. The Group recorded an operating loss of K123 million (Sept 2016: loss K65.1 million) No Dividends were earned for the period ended 30th September 2017 (September 2016: Nil)…

Operations and Strategic developments

(I) Proposed Joint Venture for setting up of a Cement Manufacturing Company
As part of ZCCM-IH’s strategy to diversify its portfolio, the Company is progressing towards finalizing a Joint Venture partnership which will culminate into setting up of a Cement Manufacturing Company.

ZCCM-IH intends to hold 35% of the shares while its Chinese Partner will have 65%. The planned production capacity of the Plant will be 5000 tonnes per day of Clinker with a 50 MW Thermal Power Plant. Furthermore, the proposed plant will be installed with a waste heat recovery system which will add another 7.5 MW of power. It is expected that the Plant will take 3 years to construct and employ over 1000 people during construction. Once completed, the plant is expected to employ about 400 people.

Commencement of construction is conditional upon financial closure.

(II) Disposal of ARM & Vale’s indirect interest in Lubambe Copper Mine Ltd (Lubambe)
African Rainbow Minerals (ARM) and Vale International SA (Vale) concluded an agreement to dispose ARM and Vale’s combined 80% beneficial interest in Lubambe to EMR Capital
Limited (EMR). The 80% beneficial interest in Lubambe, which is held in equal shares by ARM and Vale included the equity holding in Lubambe as well as loans to Lubambe. Lubambe is owned 40% by ARM and 40% by VALE, both as beneficial owners and 20% by ZCCM-IH…

By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 10 January 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 10 January 2018

Download the original SENS Announcement

ZCCM-IH Interims to 30 September 2017.pdf

Investee Company News, ZCCM-IH News

KCM pays ZCCM-IH $70 million

KALONDE NYATI, Lusaka
KONKOLA Copper Mines (KCM) has paid out about US$70 million to ZCCM-Investment Holdings (IH) in claims as at December last year.

ZCCM-IH chief executive officer Pius Kasolo said in an interview on Monday that KCM has been making monthly payments to the company.

In 2016, the English High Court granted default judgment in favour of ZCCM-IH in its claim against KCM, brought pursuant to a settlement agreement entered by the parties in 2013, for a sum of US$103 million.

The claim relates to outstanding payments under a 2013 copper price participation settlement agreement between ZCCM-IH and KCM.

Source: Zambia Daily Mail Limited

Corporate Announcements

ZCCM-IH | Trading Statement

In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of ZCCM-IH hereby advises the Shareholders of the Company that the
Earnings Per Share (EPS) for the six months period ended 30 September 2017 are approximately 165% higher than for the six months period ended 30 September 2016.

The movement in earnings is mostly due to the continued improvement in performance for most major mining companies in ZCCM-IH’s portfolio. This improved performance is
attributable to stability in energy supply and the increase in copper prices on the international market (London Metal Exchange) by 33% over the 12 months from 30 September 2016 to 30 September 2017.

Shareholders are advised that the information contained in this trading statement has not been reviewed or reported on by the external auditors of the Company.

The Company expects its results for the six months period ended 30 September 2017 to be released via the LuSE SENS and published in the local press on or about 11 January
2018. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until publication of the results.

By Order of the Board

C Chabala
Company Secretary

Issued in Lusaka, Zambia on 9 January 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 9 January 2018

Download the original SENS Announcement

Investee Company News

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Source: SATPRNEWS

Corporate Announcements

ZCCM-IH | Unaudited provisional financial statements for the year ended 31 March 2017

In compliance with the requirements of the Listing Rules of the Lusaka Securities Exchange, ZCCM-IH Plc announces its unaudited Provisional Annual Financial Statements for the year ended 31 March 2017. Below are extracts from the results.

COMMENTARY

  • The Group’s performance improved during the year owing to increase in copper production for most major mining companies. This was due to stability in energy supply and an improvement in copper prices on the world market. The copper price increased by 23% from US$4,848/ton in March 2016 to US$5,956/ton in March 2017.

  • The Group recorded an operating profit of K1, 703 million (2016 Loss: K858 million), mainly attributable to the recovery of K1, 923 million impairment from investee companies whose performance improved during the year.

  • The Group’s share of losses of equity accounted investees significantly reduced by 91% from K2, 210 million in 2016 to K194 million in 2017.

  • Profit after tax was K1,764 million (2016: Loss K2,912 million).

  • Total assets marginally increased by 8% from K9, 797 million to K10, 575 million largely on account of the recovery of the copper price participation receivable that was impaired in the preceding year.

  • The Ndola Lime Company Limited recapitalization project is still undergoing a hot commissioning, though the process has been met with a lot of challenges.

  • In February 2016, ZCCM-IH undertook to subscribe for all shares not subscribed for by other Investrust Bank Plc (Investrust) shareholders in the Investrust Rights Offer. This resulted in an increase in ZCCM-IH’s shareholding in Investrust from 10.6% to 48.6%. As a result, ZCCM-IH was required to proceed with a Mandatory Offer to all the other shareholders in Investrust in accordance with Rule 56 of the Third Schedule of the Securities (Takeovers and Mergers) Rules, Statutory Instrument No 170 of 1993, issued pursuant to the Securities Act, Chapter 354 of the Laws of Zambia.

    The process is expected to be concluded by end of March 2018.

  • Subsequent to the period under review, ZCCM-IH’s subsidiary Mawe Exploration and Technical Services Limited which was scheduled for dissolution in prior year was formally in dissolved in April 2017.

OUTLOOK
Copper prices are expected to increase steadily premised on increased demand from high copper consumer countries. ZCCM-IH’s performance is expected to improve as a result of the improvement in copper prices which drive the performance of the mining portfolio. Furthermore, as a result of good rains experienced during the 2016/17 season, the generation capacity of hydroelectricity is expected to improve thereby stabilising energy supply.

The recovery in copper prices as well as stability in energy supply will contribute to the growth in copper production which in turn will lead to growth in copper exports. The expected growth is further confirmed by additional investments of over $ 2 billion over the next several years announced by major multinational investors in the mining sector of Zambia.

In response to the positive outlook, ZCCM-IH will implement a new Strategic Plan hinged on expansion of its investment footprint in various sectors of the economy including mining with a focus on industrialisation, energy, agriculture, manufacturing, real estate and financial services.

By Order of the Board
Chabby Chabala
Company Secretary
Issued in Lusaka, Zambia on 2 January 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 2 January 2018

Download the original SENS Announcement

ZCCM-IH Provisional Abridged to 31 March 2017

Investee Company News

Konkola Copper Mines commissions new x-ray facilities

Konkola Copper Mines has commissioned new, state of the art x-ray medical facilities at its Nchanga South Hospital in Zambia valued at over US$135 000.

The x-ray facilities are expected to speed up radiological diagnostic services for the Konkola Copper Mines medical services which currently serve a catchment population of over 63 000 in four towns, namely: Chililabombwe, Chingola, Kitwe and Nampundwe.

Chingola District Commissioner Mary Chibesa, who commissioned the facilities, said that the facilities would not only benefit mine employees and commended Konkola Copper Mines for their longstanding partnership with the government to delivering quality healthcare.

“My government appreciates the long standing relationship with Konkola Copper Mines and it is our desire to sustain this mutual cooperation aimed at improving the quality of life of the Zambian people,” she said.

Acting Konkola Copper Mines CEO, Enock Mponda, reiterated the company’s commitment to the health and safety of its employees as top priority and stated that the company would continue to ensure that the health and safety of its workforce remained paramount as it embarks on its rigorous growth plan.

“The health and safety of our people is the number one priority for management. By firstly providing our employees with the best possible health care and ensuring that everyone is healthy and well, only then can we can focus on growing production and taking Konkola Copper Mines to even greater heights,” he said.

Konkola Copper Mines manager for medical services Edward Chilekwa hailed the new facilities as a big step in raising the standards of radiological diagnostic services and overall patient care at the Konkola Copper Mines medical facilities.

“The x-ray machine is something we have been looking forward to and it couldn’t have come at a better time than this as it will help us improve diagnostic quality. I am positive that this upgrade will enable our staff to serve patients in much more efficient manner,” said Dr. Chilekwa.

Source: Mining Review

Industry News

Mining in 2018: Copper price to power on

The price of copper ended 2017 near a four-year high of $3.30 a pound ($7,260 per tonne) extending the bull run in the red metal for a second year. Measured from its multi-year lows struck at the beginning of 2016, copper has gained more than 70% in value.

What happened in 2017

The run started on hopes (since dashed) of massive infrastructure investment in the US following the presidential election, but strikes in Q1, which at one point saw nearly a tenth of global production go offline, really set the tone for the year.

By mid-year the rally was flagging, but talk of a Chinese ban on scrap imports saw the price take off again. The year-end surge may have been mostly due to dollar weakness but the buoyant mood evident throughout the year (not least among speculators on futures markets) was underpinned by prospects of a demand spike in coming years on the back of an electric vehicle boom.

How things could change in 2018 (and beyond)

2017 is likely to have been the first year in 12 to see a decline in global mine production, but growth should return this year as world number two producer Peru adds some 300,000 in new production, mines like Norilsk’s Bystrinsky mine in Russia ramp up output, Glencore restarts its Zambian operations and greenfield commissioning such as First Quantum’s Cobre Panama mine begins to factor into supply projections.
“The markets where technology hasn’t substantially shortened the supply cycle, and where cost are rising, (i.e. copper) have the greatest long-term upside in prices”
But as happened last year labour action is likely to crimp any projected output growth. Wage negotiations could trigger disruptions at mines producing about 40% of global supply according to Barclays. INTL FCStone is penciling in a 1.26m tonne or 6% disruption allowance and most analysts see widening – if smallish – deficits.

The upside:

  • Factories around the world are buzzing – the JP Morgan composite PMI index is at its highest since February 2011 – and concerted global economic growth could hit 4% this year
  • Warehouse and exchange inventories are under control – Comex is up sharply, but Shanghai is down despite winter refinery shutdowns and at 200,000 tonnes, LME is nowhere near peaks seen during copper’s bear years
  • China’s pollution clampdown and shake-up of state-owned industry open up gaps for producers elsewhere – refined imports have held up surprisingly well and concentrate shipments are at record highs hitting 1.8m tonnes in November
  • The switch to electric vehicles, the build out of EV infrastructure (Beijing’s promised 4.8m charge points by 2020) and green energy investment lives up to the hype
  • Long-standing industry issues are not going away: Declining grades, rising costs, dirty concentrates, water and other environmental concerns, stricter regulations, community opposition, agonizingly slow project permitting processes and exploration activity still in the doldrums

On the downside:

  • Cooler heads prevail and Chile’s biggest ever year of copper mine wage negotiations concludes without major disruptions
  • The Chinese construction market correction turns into full-blown slump, transport slows and the scrapping of subsidies puts the brakes on EV sales – the biggest sources of demand for the metal in a country that consumes nearly half the global total
  • Higher prices encourage Chinese miners to ramp up output, domestic secondary supply rises and the purported ban on scrap imports never materialize
  • Copper from large scale expansions – Oyu Tolgoi and Grasberg going underground spring to mind – and greenfield projects like Udokan, Wafi-Golpu and Quellaveco – reach the market before new wave of demand from EVs does.

Key event to watch in 2018

Mid-year wage negotiations at Escondida – the globe’s only 1m tonne copper mine – crippled by a 44-day strike last year.

All bets are off if…

The promised $500 billion infrastructure investment program in the US gets off the ground, especially if the money goes into the electricity grid (not gonna happen)

Quote for the year

“The markets where technology hasn’t substantially shortened the supply cycle, and where cost are rising, (i.e. copper) have the greatest long-term upside in prices. The lack of investment over the past few years implies that copper mine production is likely to decelerate notably after 2019, given its long-cycle nature” – Goldman Sachs

MINING.com’s call

Above $3.50 ($7,800 a tonne) by the end of 2018 and a rising trend into 2019. And that may be conservative.

Source: Mining