ZAMBIA’S formalisation of the gold industry is gaining momentum with ZCCM-Investment Holdings (IH) starting buying gold from artisanal miners.
Last week, the holding company started buying gold from miners although the volumes bought so far are yet to be quantified.https://epaper.daily-mail.co.zm/

Source: Zambia Daily Mail

ZCCM-IH recently held a press briefing and media tour of the gold testing and processing laboratory.

The briefing was addressed by ZCCM-IH Chief Executive Officer, Mr. Mabvuto Chipata and Karma Mining Services and Rural Development/Consolidated Gold Company Chief Executive Officer, Mr. Faisal Keer.

Speaking at the event, Mr. Chipata informed the media that ZCCM-IH has embarked on an ambitious investment programme to harness the gold potential in the country as mandated by Government, and that so far the company has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalisation of gold mining and trading activities.

He announced that ZCCM-IH is offering a competitive price, starting from K550 per gram, and depending on the purity using thorough technical assaying methods, the price may be higher as compared to prices found on the ground.

Mr. Chipata further encouraged anyone with gold to come forward and sell to ZCCM-IH as the company will guide such individuals on how they can regularise their activities so that they are compliant with the relevant regulations.

And speaking earlier Mr. Faisal Keer noted that the lab was critical in the process as it is meant to determine the gold content accurately in the ore that will be received from the various miners, for them to get a fair share and value for their material.

He called upon members of the public to utilise the facility and take their samples for testing.

Consolidated Gold Company of Zambia Limited is a Joint Venture partnership between ZCCM-IH (45%) and Karma Mining Services and Rural Development (55%) with a purpose of developing a gold processing and trading operation in Zambia.

ZCCM IH in collaboration with Karma Mining Services and Rural Development Limited in Consolidated Gold Company Limited has established a gold testing laboratory following the group’s announcements that it intended to diversify into other commodities through strategic partnerships.

Earlier in the year, in the week that saw ZCCM IH Group CEO Mabvuto Chipata declare a profit for the year of K448 million and a K53 million dividend for the financial year ending March 2019 at their Annual General Meeting, the CEO announced the Group’s gold intentions.

“ZCCM-IH has started buying gold from artisanal and small scale gold miners from various places. This is part of the steps towards the formalisation of the artisanal gold miners”, according to a press invitation issued by Loisa M Kakoma, ZCCM IH Head of Public Relations on 10 March 2020.

The opening of the lab is only the beginning of what Financial Insight believes is ZCCM IH’s carefully crafted roadmap of becoming a forceful gold player in the value chain. A value chain links the steps a product takes from the primary producer to the consumer. It includes research and development, input suppliers and finance. For example, the gold value chain spans the production steps from the ore in the ground to the retailing of the fine gold jewelry. This is the reason why opening up a gold laboratory is so important to ZCCM IH’s ambitions.

By starting with small scale miners, the Group is essentially re-writing the way mining ought to be conducted in Zambia by putting in place structures and captures of the essence of value creation at each stage in a formalized manner. This is the sensitivity of traceability that is demanded by the industry as it was elaborately echoed at the February 2020 mining indaba by Mark Bristow, President of Barrick Mining. Traceability, which is a facet of supply chain management, is one type of Cost of Chain model whereby the material in the chain can be traced back to its actual sources. Depending on the solution deployed, it enables mining organizations to make informed, actionable decisions, better engage with their employees and communities and more efficiently manage resources.

With the opening up of the lab and the signing of strategic joint ventures, the Group will also be embarking on “other efforts include providing technical expertise, access to earthmoving machinery and production equipment to small scale gold miners”.

In achieving the latter, ZCCM-IH with its partner Karma Mining Services and Rural Development Limited in Consolidated Gold Company Limited have set-up a laboratory aimed at establishing gold content in ore to be purchased from artisanal and small-scale gold miners.

During the laboratory media tour and press briefing on the gold project in Rufunsa, Mr Faisal Keer, CEO of Consolidated Gold Company Limited said that the laboratory is critical as it is meant to determine gold content accurately in the ore that will be received from various miners, for them to get a fair share and value for their material. The main objective of this is to curb the smuggling of gold out of the country, provide an open market and competitive prices for the artisanal and small-scale gold miners and ultimately take stock of the gold output from artisanal and small-scale miners.

ZCCM-IH and Karma Mining Services and Rural Development have entered a joint venture partnership through the incorporation of consolidated gold company of Zambia Limited, which both have a shareholding of 45% and 55% respectively. The purpose of this joint venture is to develop a gold processing and trading operation in Zambia and they are working closely with the Ministry of mines to make this a success.

Embarking on an ambitious investment program to harness the gold potential in the country as mandated by the government, the following has been done. Firstly, they have started preliminary activities in the Kasenseli area in Mwinilunga and from the samples that have been collected so far, the results have been positive. To add on, the collabo has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalization of gold mining and trading activities.

During his speech, Mabvuto Chipata, ZCCM-IH CEO, mentions that so far, moving into the market to buy gold has been received favorably by the artisanal miners and encouraged anyone with gold to come forward and sell to them. This also includes household miners, as this will help and guide such individuals on how they can properly extract gold from their various items in a safe and profitable manner as well as regularize their activities so that they are compliant with the relevant regulations.

Source: Financial Insight Zambia

The Karma Mining Services and Rural Development – KMSRD joint venture – JV with ZCCM Investment Holdings to form a gold company “Consolidated Gold Company of Zambia – CGCZ Ltd” for the purpose of developing a gold processing operation in Zambia will take off by end of March 2020.

The company in which ZCCM-IH have a shareholding of 45% and 55% for KMSRD respectively has invested about US$ 3.5 million into a laboratory which has been set to determine the gold content accurately in the ore that will be received from various miners for them to get a fair share and value for their material.

Addressing the media in Lusaka on March 11, 2020, attended by the Zambian Business Times – ZBT, KMSRD Chief Executive Officer – CEO for the gold mining company – CGCZ Faisal Keer disclosed that about $250,000 has been invested in setting up a lab that will be able to process about 30 samples per day.

This partnership comes after ZCCM-IH announced its initiative to start buying gold from artisanal and small scale miners across the country as one of the steps towards formalization of gold mining and trading activities in Zambia.

Faisal said the lab will also enable the general public have their samples tested adding that the gold company has also procured ten gold mining mini- processing plants to be set-up in Rufunsa and other gold mining areas. The company has also procured some earth moving equipment.

He added that the gold mining processing plants have a capacity of processing 30 tonnes if gold per day and will be operational by first week of April, stating that out of the target from the gold mining plant is to produce 300 grams of gold per day, that translates into approximately 7.5 kgs per month.

“Once we have received the mineral processing license which is in the process and most likely to be out by end of this month, we will then proceed to setting up the Gold leaching plant in Rufunsa aimed at chemically processing the gold stock piles with a capacity of processing about 8,000 tonnes” he said.

At the same event, ZCCM-IH Chief Executive Officer Mabvuto Chipata said the company’s partnership with Karma Mining Services and Rural Development will go a long way as it has over 20 years of experience in gold processing and has developed several gold processing, production and trading operations.

He added that this investment is in line with ZCCM-IH’s strategic objective in mining chain value creation which is to diversify the company’s investments away from copper linked investments to other minerals such as gold and other precious metals.

Source: Zambian Business Times

ZCCM-IH and Karma Mining Services and Rural Development have entered have joint venture partnership through the incorporation of Consolidated Gold Company (CGC) of Zambia with 45% and 55% shareholding.
The company has invested $3.5 million in setting up a lab, procurement of gold milling plants and earth moving equipment. The gold milling plants have a capacity of processing 30 tonnes per day, and will be operational by the first week of April 2020.the target from the gold milling plants is to produce 300 grams of gold per day, that translates into approximately 7.5 kgs per month.,
During the laboratory media tour ZCCM-IH (CEO) Chief Executive Officer Mabvuto Chipata stated that this joint venture is to develop a gold processing and trading operation in Zambia.
“The operation of the project accords ZCCM-IH an opportunity to participate in the value chain of the gold sector through gold processing,” Chipata said.
He further said that the investment is in line with one of ZCCM-IH‘s strategic objectives in mining value creation which is to diversify the company’s investments away from copper linked investment to other minerals such as gold and other precious metals.
The total project investment is about $3.5 million.
Meanwhile CGC (CEO) Chief Executive Officer Faisal Keer said that this laboratory is targeted at the operations working with small scale gold miners.
“This lab is critical which is meant to determine the gold content accurately in the ore that received from the miners to get a faire share and value for their minerals,” keer said.
Keer also said that the company is helping licenced small scale gold miners in the area,
“And also providing access to earth machinery in order to increase gold ore production and aiming to transfer technical skills to the miners who are dealing in lode gold or quartz vein gold mining,” he added.
So far the company has invested about $250,000 in setting up the facility.
And eight gold mining and panning sites across the country to undertake a scoping exercise. Based on the scoping exercise ZCCM-IH has started purchasing gold in Rufunsa, Vubwi, Mumbwa and Luano.
The national target for gold from both primary and secondary sources is 40 tonnes and secondary sources on artisanal and small scale gold miners which is about 43% from the national target.

Zambia’s mining investment firm ZCCM Investment Holdings has announced that it has started buying gold from artisanal and small-scale miners across the country in what is seen as a follow up move to formalize gold mining and trading that has been happening in some parts of the country.

In an advisement circulated on March 6, 2019, ZCCM – IH is providing an open market and competitive prices for the gold hence gold sellers across the country are encouraged to take their gold to the firm for sale, but no further details have been availed.

ZCCM-IH had last year in December announced that it would set up centers for buying gold in strategic areas with deposits as a first step towards bringing artisanal and small-scale miners into the formal market.

When the Zambian Business Times – ZBT reached out to the mining investment firm, its Public Relations Manager Loisa Kakoma stated that the company is planning to hold a press briefing on the matter during this week where they will share more details on how the whole operation will be carried out.

ZCCM-IH buying of gold has also been linked to the central bank (Bank of Zambia – BOZ) which had in December 2019 announced that it is in the process of resuming the buying of gold to serve as an alternative to forex reserves.

The Bank governor Dr. Denny Kalyalya told ZBT in an exclusive interview back then that the move is a way of diversifying from the risk of only relying on holding of the US dollar reserves which is currently the main forex reserve held.

The BOZ governor however did not disclose the target value of gold reserves to bought and stock piled in 2020 stating that discussions with suppliers and modalities are still underway.

According to a research done by ZBT, gold reserves would complement the current US dollar held reserves which are now mostly generated from minerals royalties levied on copper exports. Gold reserves would become more efficient to stock pile as they would be bought using local currency with the country leveraging the current mining at existing large scale copper and gold mines at Kansanshi and Lumwana.

Other areas reported to have notable gold deposits are Mwinilunga in the North Western Province, Mumbwa and Luano in Central province, Rufunsa and Luangwa in Lusaka province and Petauke in the Eastern Province.

Government has indicated that Zambia aims to produce 40,000kg of gold in 2020 alone from primary and secondary sources including artisanal and small-scale miners.

Source: Zambia Business Times

On Friday, the 6th of March 2020, Zambia’s two-decade old mining company, ZCCM Investments Holdings, 77.7 per cent owned by the Zambian Government, had issued a statement saying that the Zambia’s investment wing had begun to purchase gold from unofficial traders or miners alongside small-scale unregulated miners aimed at formalizing the largely unregulated sector, demand of which has inflated by many folds over the recent past in line with a soaring gold futures’ prices reigning near their nearly seven-year peak.

In point of fact, latest announcement from ZCCM came against a chaotic backdrop in the informal gold mining industry in Africa, while a number of Government across the African continent had been scuffling to deal with unofficial mining of golds, which has also been triggering a number of tormenting issues such as a significant level of environmental risk and health hazards to the miners alongside an en masse flow of illicit money that has been curbing out critical revenues of the nations after having smuggled for sales.

Meanwhile, as Ethiopian artisanal gold buying market has been purchasing the precious metal at a higher price than the markets are offering to lure miners away from black markets, adding that the artisanal gold miners could bring in illegal or unofficially mined gold in to its Lusaka office, ZCCM-IH said in an advertisement on Friday (March 6th), “ZCCM-IH is providing an open market and competitive prices for gold. Looking forward to doing business with you! It is cash on delivery, spread the word! ”

Source: Financial Word

Angola’s new diamond trading policy generated an average annual growth of gross revenue of about 8.5% in the past two years.

According to a media statement issued by Sodiam – the National Diamond Trading Company of Angola-, while in the 2016-2017 period gross revenue grew by 2.3%, in 2017-2018 it grew 10.8%, totalling $1.22 billion, and in 2018-2019 it grew by 6.2%, totalling $1.29 billion.

The positive results follow a 2018 decree that eliminated the figure of ‘preferred customer’ and implemented new ways of selling diamonds.

Before, preferential customers who were chosen by the head of state were the only ones who could buy diamonds from Sodiam at discounted prices and within specific quotas. This led to monopoly practices and corruption.

“In this period from 2012 to 2017, eight companies operated exclusively in Angola, under the status of preferential customer, and from 2013 to 2017, the companies Iaxon, Relactant and Odyssey, together, acquired more than 50% of the diamond production,” the media brief states.

To put a halt on such practices, the 2018 decree proposed a new sale modality that involves contracts or sights, auctions/tenders and spot. To take part in this, Sodiam clients register online on the state company’s website and undergo financial and security checks.

The base sales reference price is defined through an agreement between the producer, Sodiam and an independent evaluator. The purchase is only effective if its offer is equal to or higher than the base sales reference price.

According to the National Diamond Trading Company of Angola, besides the rise in revenues, the new set of measures has sparked interest with more than 120 companies registered in Sodiam’s customer portfolio and three new polishing factories opened in the country.

Source: Mining.Com

In the first week of March 2020 trading on the LuSE, we see hope for the equities market as it was not completely dominated by the Bond market. Opening the market with a score of 98% to 2% as compared to week one of February with the bond market which scored 100% of sales.

 Equity Market Update

In the week ended 06th March 2020, a total of 5,087,040 shares were transacted in 67 trades, yielding a market turnover of K4,360,121. Trading activity was recorded in AIRTEL, COPPERBELT ENERGY CORPORATION, LAFARGE, STANDARD CHARTERED BANK LIMITED, ZAMBEEF, ZANACO and ZAMBIA SUGAR.

During the week, the company with the highest Market Capitalisation on the LuSE was AIRTEL which also had a high Price to Earnings ratio signaling continued overvaluation of the telecoms company

However, of the traded companies during the week, ZAMBEEF had the highest earnings per share despite having one of the lowest share prices.

The LASI closed the first week at 4260.56, which was a point higher than the previous week (last Friday of February) which was at 4250.48.

The LuSE All Share Index (LASI) closed at 4,260.56 points. The market closed on a capitalization of K57,363,640,096 including Shoprite Holdings and K23,124,434,116 excluding Shoprite Holdings.

The equities market opened on a low as compared to the first week of February, which recorded a total of 51,550,940 shares transacted in 109 trades, yielding a market turnover of K32,059,252.

Bond Market Update 6^th March 2020

During the week, bonds of a total face value of K487,260,000 were transacted in 13 trades, yielding a market value sales of K242,792,000. Sales in the opening week of March were almost 10 times stronger than the previous week which positions the current month well should sales continue to be strong in comparison to the dipped performance of February 2020.

Important announcements                           

PUMA ENERGY ZAMBIA PLC

Pursuant to section 3.59 of the LuSE Listing Requirements, the Board of Directors of Puma Energy Zambia Plc (“the Board”) wishes to announce the resignation of Mr Sidy Bane as Director of the Board effective 28 February 2020. Furthermore, the Board would like to announce the appointment of Mr Mike Baker and Mr Patricio Chababo as Directors of the Board effective 2 March 2020.

ZAMBIAN BREWERIES PLC

The Board of Directors of Zambian Breweries Plc (“the Board”) wishes to advise Shareholders that for the period ended 31st December 2019, the earnings per share is expected to be 81% lower than that of the corresponding period last year for the Company. Earnings for the same period based on profit from continuing operations and adjusted for once-off are expected to be 27% higher.

ZAMBIAN BREWERIES PLC

NOTICE IS HEREBY GIVEN that the 26th Annual General Meeting (AGM) of the members of Zambian Breweries. Plc will be held at the Southern Sun Ridgeway Hotel, Lusaka, Zambia, on Thursday, 26th March 2020, commencing at 09:00 hours, for purposes of transacting the following business:

STANDARD CHARTERED BANK ZAMBIA PLC

In accordance with the Lusaka Securities Exchange (“LuSE”) Listings Requirements, the Board of Directors of Standard Chartered Bank Zambia PLC (“the Bank”) hereby advises the Shareholders of the Company that the Earnings per Share for the financial year ended 31 December 2019 is approximately 95% lower than for the financial year ended 31 December 2018.

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