CAPE TOWN – Zambian Mines Minister Richard Musukwa on Wednesday wooed investors at the Investing In African Mining Indaba to take advantage of the country’s resource potential despite the government’s provisional liquidation of the Konkola Copper Mines (KCM) for failure to pay dividends.

KCM, which is 20.6 percent owned by state-owned Zambian Consolidated Copper Mines (ZCCM) and 79.4 percent owned by Vedanta Resources, is at the centre of an ongoing litigation battle by the London-headquartered company to regain it.

Musukwa said Zambia remained a stable investment destination for serious investors.

“Serious investors need to consider Zambia as an opportune destination. With Vedanta, Zambia is dealing with an investor that broke the law,” said Musukwa.

“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. What do you want the Zambian government to do?”

Musukwa said that Zambia was one of the top 10 best performers in Africa as rated by the World Banks’ 2020 Ease of Doing Business Report.

Last May, ZCCM filed a petition in the High Court of Zambia to wind up KCM on “just and equitable” grounds.

ZCCM also obtained an ex parte order from the High Court of Zambia, appointing a provisional liquidator of KCM pending the hearing of the petition.

Since all the significant decision-making powers, including carrying on the business of KCM and taking control over all the assets of KCM, rests with the Provisional Liquidator, Vedanta previously said that it believed that the appointment of the Provisional Liquidator had caused a loss of its control over KCM.

The company deconsolidated KCM last May.

Musukwa said that Zambia was a host to investors from Canada, Australia, India and China.

“You are welcome to Zambia if you follow the law,” he said, adding that the company broke the law.

“When we give you a mining licence, we give you the conditions of the grant. If the conditions of the grant are broken, because we are Africans we must watch you break the law? We deserve African and international support to ensure that Vedanta Resources pays the price. The failure of Vedanta Resources to operationalise its mine plan is criminal.”

Source: Bussiness Report- Independent Online

ANALYSIS: HELEN LUBAMBA
MINING’S status as one of the main pillars of Zambia’s economy can hardly be over-emphasised.
After Government, the extractive industry is the country’s largest employer. The sector’s contribution towards employment extends beyond its direct workforce to include contractors in the mining value chain and other businesses down-stream.
The industry plays a crucial role in stimulating development in the areas of its operation, as new roads, housing projects and utilities are built to service the mines and surrounding communities, contributing to the overall development of the country.
However, for the country’s mineral resources to maintain this impact, mining companies must invest for the future, invest in capital projects, and invest in the very latest technology to remain competitive.
That is why the world’s mining executives, along with government experts and financiers, converged on Cape Town recently for the industry’s most important annual gathering – the Mining Indaba.
I am joined by colleagues there from both Stanbic Bank Zambia and our parent group Standard Bank to network with industry leaders and gain further insight into what they need from us as a bank.
There is need for stakeholders to put in place measures that will not only ensure the survival of the mining sector but also increase its contribution to national gross domestic product (GDP) by facilitating its growth as a viable business.
And as anyone in business knows, growing an enterprise requires fresh capital injections both for asset investment and general operational expenses. Mining companies by the nature of their size need this in much larger quantities than most businesses.
Crucially, that investment is not only large, but also long-term, hence the need for a steadfast financial partner that will work hand in hand with the sector and understands the challenges, cyclical nature of the business, and the need for stable funding.
Both Government and private sector firms have invested heavily in Zambia’s mining sector to help maintain stability and sustainable growth. Financial partners must be prepared to support the mining sector during times of good fortune as well as during the downturns in whatever format these may present themselves. To this end, financial partners need to critically assess and select the mining firms that they would have a high probability of standing next to through the cycles.
Stanbic Bank Zambia has in the last decade invested more than US$3 billion in the mining sector’s growth – illustrating the value placed on the industry by the bank. It is the sector key to driving Zambia’s growth. However, growth in the mining sector is typically a source of both excitement and stress as the age-old debate on whether mines are contributing enough to the treasury often follows any upturn in the sector.
A taxing situation
In 2018, Government announced an upward adjustment in mining taxes in the 2019 national budget. This was heavily criticised by some mining companies that felt the new taxes would render their operation unviable economically.
While the mines claimed they would need to scale back expansion projects and cut their labour force to save costs and remain operational, Government insisted that there was no evidence the new taxes would cripple mining operations.
The uncertainty of how the new tax system would affect mining operations demonstrated that there was still a lot of work to be done in promoting higher levels of transparency and deeper engagement among all stakeholders in the industry. Critical for this sector is a consistent, long-term tax regime, as frequent changes are disruptive to an industry that requires long-term planning and investment.
This is what makes events like the 2020 Investment in African Mining Indaba so important. Such forums create a platform for mining companies, policy makers, value chain players and other stakeholders to discuss issues affecting the sector helping improve transparency and trust as a result of improved collaboration and engagement.
As a major player in Zambia’s mining sector, Stanbic Bank participates in such platforms to maintain its contact with key stakeholders in the extractive industry.
By remaining in frequent contact with industry players, we can keep our business strategy in line with the sector’s needs which enable us to deliver the best services through customised solutions and products contributing to the industry’s growth and economic development.
Stronger local capacity imperative
For the value of mining to have a meaningful impact on Zambia, there is need for local communities to take a leading role in shaping and growing the sector and spread its benefits to the rest of the country.
Stanbic Bank has over the years directed resources to help intensify the extractive industry’s multiplier effect through innovative, efficient and unique services at personal, SME and corporate levels. As a responsible citizen it is also key for us to partner with mining companies that have clearly outlined sustainability policies around social upliftment and environmental protection.
The bank has partnered with various value chain players to develop strategies that make it easier for them to identify and harness business opportunities in mining.
Through this support, suppliers – especially those in mining towns – can increase their capacity to fulfil contractual obligations, hence creating more opportunities for investment that eventually trickle down to the community.
Annually, the bank holds its annual Stanbic Mining and Economic Roadshow which is a multi-stakeholder and multi-sectoral roadshow designed to engage the main stakeholders in the industry and supporting industries.
During the event, Stanbic sends its sector experts to Zambia’s mining towns to participate in discussions on issues affecting the industry as well as help create modalities to strengthen the relationship between mining companies, suppliers, government agencies and communities. It’s an opportunity for the bank and our group partners to see what is happening on the ground, engage with our clients and impart our views and forecasts of the state of the sector in the context of the wider global economic environment.
Mining has the potential to leave Zambia with a skilled labour force to propel the country’s development, and the goal is to help ensure mining remains a viable business in Zambia and that the public benefit from the country’s mineral wealth.
We can achieve this only through intensive training and education both at the grassroot and professional levels. As a country, we ought to do more to expose our young people to the opportunities in mining and the value chain to make the sector’s growth and contribution to the economy sustainable.
It is up to everyone to help push this agenda for the good of the country.
As a bank that proudly calls Zambia our home, Stanbic Bank will continue to provide support to the sector at all levels. The bank is committed to developing new ways to help stimulate growth in the mining industry by pushing the boundaries of innovation to deliver quality sector-specific solutions for industry players.

The author is head of corporate and investment banking at Stanbic Bank Zambia.

Source: Zambia Daily Mail

Mining commerce is alive! This is part of what the annual Mining Indaba, currently going on at the illustrious Cape Town International Convention Center seeks out to achieve.

Now in its 26^th year, this year’s event has found the South African economy at crossroads. The big talking point is energy for South Africa. They, like Zambia, are currently faced with energy poverty. Mining success is heavily dependent on consistent supply. This inevitability feeds into the growth trajectory. As of 2019, South Africa’s GDP stood at approximately US$ 70.613 billion, according to the World Bank, while Zambia’s came in at US$32 billion.

The event organizers have over the years strived to continuously improve return on investment and time for participants. That is why this year, they added a nice touch of launching a newly designed online matchmaking platform, to bring investors and industry closer together. Furthermore, this year, the legal fraternity now has what is known as a General Counsel Forum which they have done in conjunction with Africa Legal. Notably, Baker Mckenzie whose work in energy and mining has been phenomenal, is playing a large role as one of the sponsors of the event.

This year’s event also strives to bring topical issues such as the impact of Mining Investment on the Millenials. Sitting through this discussion, one of the key takeaways was that as opposed to informing this particular generation about the significance of mining, the extractive industry needs to listen to them and focus on some of the key concerns they have to issues such as sustainability of the sector and environmental impact.

During the morning event, President Félix Tshisekedi, was one of the main speakers on the opening day. He came with a message of Congo being open for mining. Speaking to some of the delegates from congo in the mining sector, one of their biggest concerns was energy. Recently, one of the two contractors engaged to build the long-awaited Inga Dam project pulled out following concerns over the feasibility study and pricing of the EPC contract, according to a high ranking source spoken to at the Mining Indaba who works for the Ministry of Mines in Congo, on 3^rd February 2020.

On Tuesday, delegates will listen to Zambia’s Minister of Mines as he explains what Zambia’s strategic intent is going forward on Mining. This will be Zambia’s opportunity to sell the mining story in Zambia. ZCCM IH has recently made a number of announcements around its investment in the Gold mining sector. This is a key focus area that head of the ZCCM IH delegation, CFO Chilandu Sakala, will be speaking to prospective partners and investors. Her company is re-writing the narrative of how mining can be conducted in Zambia but building a complete local value chain that can be the difference for Zambian in years to come.

Source: Financial Insight Zambia