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Why the acquisition of 90% of additional shares in Mopani by ZCCM IH is a timing masterstroke

In the era of ‘irrational’ economics, astute investors must keep an eye on the happenings in the macro environment to make sound investments. Although not a traditional risk associated with happenings in the macro, the global shutdown that Covid 19 caused meant that commodities would only see a northward trajectory when the world opened up.

Copper has experienced a bullish run that has seen it rise to levels last seen over 8 years ago. According to an article published on CNBC early this year, “The demand for copper has been on the rise and is expected to go further up with top copper consumer China getting back to business after a long holiday and optimism of a stronger global economic recovery in view of COVID-19 vaccine roll-outs”.

Therefore, this means that investors who have been keeping a close eye on these developments and are involved in transactions such as acquisitions of commodity extraction assets such as mines are destined for an unprecedented windfall.

On Tuesday 30th March 2021, the ZCCM IH Board will host its investors at an Extra Ordinary General Meeting (EGM) to seek its shareholders’ approval for the Transaction whereby it will acquire 90% of the issued shares of Mopani Copper Mines Plc (“Mopani”) (being all of the issued shares in Mopani which it currently does not own) from Carlisa Investments Corporation (“Carlisa”).

This transaction is one of many complex transactions that ZCCM IH has structured since its establishment. The transaction is backed by its recently released strategy which will see the investment house more active in an extractive industry that is poised for a boom in this decade. The nostalgic transaction represents an opportunity for ZCCM-IH to transform from a pure investment company to owning and operating a major mining asset in Zambia.

Shareholders in ZCCM IH will have the opportunity of seeking clarity from the Board regarding some of the intricacies of the transaction. At face value, the transaction will ZCCM IH increase its shareholding implying going forward, the woes it faced as a minority shareholder of not having its voice heard will now be the loudest voice in the board room. This is critical if the investment house is going to be able to extract better value from its underlying assets and remedy some of the previous challenges it had when it was the smallest voice in the boardroom.

Shareholders will also be reminded about how the asset they are now increasing their shareholding in was capitalized. Extractive industries are capital intensive and often not financed from cashflows due to the nature of the business as well as the working capital cycle of the value chain. Historically, Mopani has been funded by shareholder loans from Carlisa and Glencore Group. As of 31 December 2020, the total value of the loan was $4.3bn, under the terms of the debt agreement, this has been amended to $1.5bn.

The $1.5bn will be amortized through a royalty payment mechanism that has been structured in such a way that the cash water fall system will ensure all creditors are paid and equity is capitalized. The revenue stream will be assured through the signing of an offtake agreement that will see Glencore purchase the product at a market price that is based on London Metal Exchange (LME) pricing. In short, the continued acceleration of Copper Prices that have now breached the $9000 per ton mark are a win for ZCCM IH.

Source: http://fizambia.com/?p=10196 
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Job Advertisement

Zambia Gold Company Limited (Zambia Gold) was incorporated on 10 January 2020. Zambia Gold (the ‘Company’) is co-owned by ZCCM Investments Holdings Plc with a 51% stake and the Ministry of Finance owning the remaining 49% stake.  Zambia Gold is mandated to lead the development of the gold sector in Zambia by undertaking commercial activities for the benefit of all stakeholders. In order to achieve this objective, Zambia Gold Company Limited will broadly undertake the following activities:

  1. Acquire exploration licenses and carry out mineral exploration with a focus on gold (either directly or in partnership with other entities)
  2. Develop and operate mines for gold and other precious minerals
  3. Refining, grading, producing, cutting, and processing gold and other precious minerals
  4. Buying and selling of gold and other minerals
  5. Support artisanal mining operations and transforming these into commercially viable activities
  6. Pursue value addition opportunities in the precious metals sector

In order to achieve this mission, the Company invites applications from suitably qualified and experienced individuals who are innovative, energetic, and performance-driven to fill the following positions:

Procurement Officer X 1

Location         : Kasenseli Gold Project-Mwinilunga
Department  : Chief Executive Officer’s Office
Report to        : Procurement Manager

Job Purpose
To effectively undertake and manage the procurement of goods/services/works in order to ensure their timely provision and contract management to ensure availability for the smooth operation, compliance with Public Procurement Act, 2008 and its Regulations.

Main duties

  1. Develop and implement the procurement plan to ensure all requirements for all user departments/directorates are captured in a timely and holistic manner.
  2. Continuously train (on the job) implementers in the preparation of terms of reference, specifications, and proactive follow-up of these inputs in the bidding processes;
  3. Prepare bidding documents based on acceptable bidding standards;
  4. Ensure all prior review requirements such as obtaining the No Objections from ZPPA are compiled within a timely manner;
  5. Ensure that all the due tendering processes are adhered to: sufficient publications, strict adherence to deadlines, transparency in communications with bidders, the publication of bid results, etc.;
  6. Ensure acceptable record-keeping in procurement with at least a complete procurement file for each procurement from start to contract finalization.
  7. Maintain all procurement records in a form appropriate for regular auditing and spot checks by relevant checkers;
  8. Oversee the contracting process, including ensuring that Evaluation Committees have people with appropriate expertise;
  9. Monitor implementation of contracts: progress report status on a weekly and monthly basis; and intervene to address problem upon request by the Project Manager;
  10. Ensure that goods and services financed have been procured in accordance with the Zambia Public Procurement Act;
  11. Prepare quarterly reports of progress with implementation of the Procurement Plan, and regularly inform the Project Manager of challenges and make proposals to overcome bottlenecks;
  12. Ensure that all procured goods are receipted and maintained using the approved store documentation.

Qualifications and experience

  1. Professional Qualifications
    Full Grade 12 Certificate;
    Graduate Diploma in Purchasing and Supply (CIPS) Level or Bachelor’s Degree in
    Purchasing and Supply.
    Member of the Zambia Institute of Purchasing and Supply (ZIPS)
  2. Minimum Relevant Pre-Job Experience:
    At least 4 years experience in a high demanding busy industry.
  3. Skill Specifications:
    Negotiation skills
    Communication skills
    Numerical and Computer skills
  4. Other Attributes (Personality Traits)
    Quality Oriented
    Price-conscious
    Integrity
    Collaborative
  5. Valid Driver’s license

2. Security Officer X 1

Location        : Kasenseli Gold Project-Mwinilunga
Department : Alluvial Gold Processing
Report to       : Project Manager

Job Purpose

To provide security, site access control services and assistance to the assigned project and jobsite activities. To assist in the implementation of security programs that are incorporated into the project construction activities, develop an effective working relationship with allocated project personnel, and advise their supervisors regarding their progress, any issues, and actions required. To ensure adequate investigations are carried out in order to promote industrial security which when not handled well results into loss of company property and revenue.

Main duties

  1. Secure premises and personnel by guarding and patrolling property;
  2. Enforce access control and maintain security data;
  3. Detect and prevent crime;
  4. Implement access control measures including physical and electronic measures;
  5. Sensitize employees on security-related issues;
  6. Supervise subcontracted Security Guards;
  7. Direct investigation of security incidents to establish the severity causes and initiate remedial action
  8. Ensure that all the daily security operations run smoothly and effectively
  9. Investigates any suspicious activities that take place and report unlawful activities such as theft or vandalism to Project Manager for further action
  10. Follow up with police and courts on various outstanding cases of theft to
  11. recover property and ensure that justice is done.
  12. Liaise with government security wings to ensure quality service delivery.

Qualifications and experience

  1. Professional Qualifications
    Full Grade 12 Certificate
    Bachelor’s Degree in Criminology/Psychology, Social Psychology, Public Administration or any other social sciences
    Police or Military Training necessary
  2. Minimum Relevant Pre-Job Experience:
    5 years relevant experience in a reputable organization with a traceable record.
    Experience in criminal investigations will be an added advantage.
  3. Skill Specifications:
    Ability to communicate effectively in English
    Interpersonal skills
    Computer skills
  4. Other Attributes (Personality Traits)
    Integrity and Honesty
    Reliability and dependability
    Initiative
    Confidentiality
    Sober character
    Physically fit
  5. Valid Driver’s license

Zambia Gold Company Limited provides equal employment opportunities to all Zambians on merit without discrimination on the basis of age, gender, color, tribe, disability, or religion.

Interested, suitably qualified, and experienced persons should send their application together with certified copies of Academic and Professional certificates; a detailed Curriculum Vitae with traceable references and a copy of the NRC should reach the undersigned not later than Thursday, 1st April 2021.

Only shortlisted candidates will be responded to.

Head Human Resources and Administration
Zambia Gold Company Limited
Subdivision F/377a/30/B
Kudu Road, Kabulonga
LUSAKA

Email: jobs@zccm-ih.com.zm

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Zambia’s External stands at $ 12.74 billion, and not $ 27 billion-Ministry of Finance

The government has said that Zambia’s external debt remains at 12.74 billion dollars, contrary to claims that the debt was 27 billion dollars as of 2019.

The Ministry of Finance said that the 12.7 billion dollars was as of end of December 2020.

A statement availed to to the media by the Ministry in Lusaka today said that some media reports made the 27 billion dollars debt claim, following a misrepresentation by the World Bank’s International Debt Statistics published in October 2020.

The statement noted that the 27-billion dollars debt refers to all external debt including debt held by the private sector such as mining companies, banks, and other corporates which government is not in charge.

The Ministry notes that government has no liability for debt held by the private sector, adding that the World Bank’s report makes it clear that government external debt was around 11-billion dollars in 2019 similar to what the government reported.

The Ministry further noted that Zambia engaged in positive and constructive virtual talks with the International Monetary Fund earlier this month, making clear progress towards an agreement on a policy package and path to fiscal and debt sustainability.

The statement further stated that the country hoped the current engagements with various multilateral stakeholders will contribute to its goal of restoring public debt sustainability.

Meanwhile. ZCCM-IH Chief Investments Officer Brian Musonda has said that Mopani Copper Mine (MCM) will significantly contribute to Zambia’s economic revenue, now that the mine is in the hands of Zambians, adding that the mine will have something to show to the nation as positive things will be actualized.

Speaking during Radio Icengelo programme in Kitwe yesterday, Mr. Musonda said that ZCCM-IH working with Mopani management have worked on a strategy to turnaround the mine and make it profitable and that ZCCM-IH financials show that under Glencore the mine has been recording losses since privatisation.

Mr Musonda said that Zambians who have been operating the mine since April last year are upbeat about growing the company and will ensure it is run professionally.

Mr Musonda said that ZCCM-IH management is optimistic that things will be handled well by the Zambians.

“We are very sure that something positive will come out from Mopani because Zambians will ensure that the mine contributes something to the country,” Mr. Musonda said.

“Mopani will continue to produce results and we will give them support as shareholders, the performance of Mopani has improved and the financial status of the mine is encouraging,” he said

The acquisition will result in ZCCM-IH taking full ownership of Mopani. The transaction is scheduled to be fully consummated by 31 March 2021 after the ZCCM-IH Extraordinary general meeting on 30 March 2021 in which ZCCM-IH shareholders will vote on the transaction.

 

Source : https://www.zambianobserver.com/zambias-external-stands-at-12-74-billion-and-not-27-billion-ministry-of-finance/
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ZCCM to garner shareholder approval for Mopani takeover on March 30

Zambia’s mining investment arm ZCCM Investment Holdings will hold an extraordinary general meeting on March 30 for shareholders to vote on the company’s intended acquisition of Mopani Copper Mines.

ZCCM in December announced it interest in acquiring 90% of Mopani’s issued shares from Carlisa Investment Corporation, as represented by its majority owner international miner Glencore.

Carlisa in 2020 wanted to place Mopani on care and maintenance, which led ZCCM, which then held a 10% interest in Mopani, to intervene.

Mopani is one of the longest running and largest copper and cobalt mining operations in Zambia.

Mopani has historically been funded by shareholder loans from Carlisa and other members of the Glencore group. Pursuant to this transaction, ZCCM and Carlisa have agreed that Mopani’s $1.5-billion debt bill will be taken over by ZCCM.

Should shareholders approve the transaction, Glencore and Mopani will enter into offtake agreements, whereby Glencore will acquire up to 100% of Mopani’s production of copper cathodes and copper anode slimes materials at market rates.

Some of this production will be allocated for sale to domestic Zambian value-adding customers.

ZCCM CEO Mabvuto Chipata notes that, as the global energy transition shifts away from hydrocarbons toward renewables, and development in electric vehicles drives copper demand and prices, ZCCM is in a good position as it prepares to officially assume ownership of this asset and mine this critical metal.

The mines owned and operated by Mopani – Nkana and Mufulira – are considered key Zambian assets.

A competent persons report completed by consultancy SRK in January confirmed a total resource of 255-million tonnes at a grade of 2.03% total copper for Nkana and 76.6-million tonnes at 2.2% total copper at Mufulira.

Further development has increased the mine life by 25 years through the integration of new infrastructure, as well as the implementation of an expansion programme over five targets, and three shaft sinking projects, in addition to building a new concentrator capable of a throughput of 4.2-million tonnes a year and recoveries of 94%.

The refinery’s design capacity is 225 000 t/y of copper cathode, placing it among the largest in Africa and one of four major smelters in Zambia.

 

Source : https://www.miningweekly.com/article/zccm-to-garner-shareholder-approval-for-mopani-takeover-on-march-30-2021-03-10
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Update on arbitration proceedings against ZCCM-IH and Kansanshi Mining Plc (“KMP”) by Kansanshi Holdings Limited (“KHL”)

Further to the cautionary announcement dated 25 November 2020, the Board of ZCCM Investments Holdings Plc (“ZCCM-IH” or “the Company” or “the Board”) hereby wishes to inform shareholders and the market that arbitration proceedings against ZCCM-IH and Kansanshi Mining Plc (“KMP”) by Kansanshi Holdings Limited (“KHL”) have progressed.

The arbitration tribunal has issued a Partial Final Award (dated 29 January 2021) in the arbitration, pursuant to which ZCCM-IH’s defence has been successful and various declarations have been granted in ZCCM-IH’s favour.

Certain matters remain outstanding and will be addressed by the tribunal in the Final Award.

Therefore, shareholders are advised that the matter is still on-going and may still have a material effect on the price of the Company’s securities. Shareholders will be updated as the case progresses.
Accordingly, shareholders of ZCCM-IH are 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

Source : http://fizambia.com/?p=9978
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Job Advertisement: Investments Manager, Investments Analyst Positions.

ZAMBIA GOLD COMPANY LIMITED

Zambia Gold Company Limited (Zambia Gold) was incorporated on 10 January 2020. Zambia Gold (the ‘Company’) is co-owned by ZCCM Investments Holdings Plc with a 51% stake and the Ministry of Finance owning the remaining 49% stake. Zambia Gold is mandated to lead the development of the gold sector in Zambia by undertaking commercial activities for the benefit of all stakeholders. In order to achieve this objective, Zambia Gold Company will broadly undertake the following activities:

i) Acquire exploration licences and carry out mineral exploration with a focus on gold (either directly or in partnership with other entities)
ii) Develop and operate mines for gold and other precious minerals
iii) Refining, grading, producing, cutting and processing of gold and other precious minerals
iv) Buying and selling of gold and other minerals
v) Support artisanal mining operations and transforming these into commercially viable activities
vi) Pursue value addition opportunities in the precious metals sector

In order to achieve this mission, the Company invites applications from suitably qualified and experienced individuals who are innovative, energetic and performance driven to fill the following positions:

  1. Investments Manager X 1
    Location: Lusaka
    Department: Investments and Markets
    Report to: Head Investments and Markets

    Job Purpose
    To lead the business development team within ZGCL, as well as having overall responsibility for business growth, developing stakeholder’s awareness of ZGCL’s products and services and identifying new business partners.

    Main duties
    a. Grows new markets for ZGCL as well as continued expansion of the existing ones
    b. Executes expansion techniques and meets fiscal targets that will help ZGCL to grow and become successful in achieving its mandated objective.
    c. Acquires an extensive comprehension of present and anticipated market trends and developments, focusing on the key factors that impact the price of gold, other precious metals and base metals on the global market.
    d. Develops strategic ideas or proposals to make ZGCL successful and increase revenue and optimise overall commercial and social returns for the company’s stakeholders.
    e. Identifies resources required and opportunities to expand product usage and develops strategies for achieving accelerated growth in business.
    f. Networks with prospective investors to identify the relevant value propositions and potential areas of synergy consequential to onboarding the prospective investors or strategic partners.
    g. Actively monitors and evaluates the performance of the company’s product, active projects and asset portfolio (including, but not limited to, mining tenements, associates and subsidiaries) and recommends the relevant course action to be taken where applicable.
    h. Undertakes research studies that indicate both tailwinds and headwinds/challenges faced by the industry at present and in the future and illustrates knowledge of the operational attention to detail that will be required to succeed within the industry.
    i. Develops investment grade project proposals across the mineral value chain (from exploration to mining to processing to marketing and trading) in order to realise feasible and viable investment proposals.
    j. Makes the appropriate and cost-effective commercial and financial or investment banking deals.
    k. Drafts, negotiates and closes on all key commercial terms for all brokered deals.
    l. Develop strategies and structures to effectively optimise the participation of artisanal and small-scale miners (ASMs).
    m. Formulation and review of investment guidelines, policies and procedures for monitoring and evaluation of existing projects and investments as well as the identification and onboarding of new projects and investment opportunities.

    Qualifications and experience
    a) Professional Qualifications
    Full Grade 12 Certificate;
    Bachelor’s Degree (or its equivalent) in Investments, Finance, Banking, Mining Economics or related fields.
    A Masters Degree or Professional Qualification (e.g. CFA, CIMA, FRM, ACCA) is an added advantage
    b) Minimum Relevant Pre-Job Experience:
    8 years work experience in financial analysis, corporate finance, investment banking and related fields.

    c) Skill Specifications:
    Negotiation skills
    Communication skills
    Computer skills

    d) Other Attributes (Personality Traits)
    Persuasive and Pleasant
    e) Valid Driver’ s license

  2. Investments Analyst X 1

    Location: Lusaka
    Department: Investments and Markets
    Report to: Investments Manager

    Job Purpose
    To ensure the competitiveness of Zambia Gold Company Limited by devising strategies and investment plans and prevailing conditions in the gold mining and financial sector industry, to ensure that the Company remains a leader within its defined sector.

    Main duties
    a) Continuously collects and interprets data, such as company financial statements, price developments, currency adjustments, and yield fluctuations as it relates to gold mining
    b) Perform financial due diligence, analysis and other actions as outlined with the company’s investment policies, processes and procedures on prospective projects and recommend an investment decision to the Investments Manager.
    c) Actively participate in any feasibility study exercises in relation to developing a greenfield mining opportunity exercise or mineral processing infrastructure projects.
    d) Conducting market research on the gold mining and value chain industry and gather market intelligence to enhance management of various gold projects.
    e) Write research reports that will form a key input to business proposals.
    f) Creating financial and commercial structures that enhance return on investment of projects and financial planning.
    g) Analysing company accounts and financial projections and advise the company on how to best position its investments
    h) Maintain up-to-date information on the latest economic trend in the country, latest and any updates in the financial markets as it impacts on gold mining industry
    i) Provide updates on financial market activities to assess and correctly position the company in the local and the global market.
    j) Closely monitor performance of the company’s product existing and asset portfolio and assess any key (upside or downside) risks thereto.
    k) Provide advice to the Investments Manager on all investment compliance regulations
    l) Draft initial business proposals for presentation to the Investments Manager
    m) Monitor the financial news using specialist media sources
    n) Assist in implementing of company strategic plan to enhance Investment and Trade.
    o) Continuous liaison and interaction with artisanal and small-scale miners (ASMs) to identify key gaps and areas in which ZGC can provide technical assistance.
    p) Tracks all rights and obligations of existing business and financial relationships or agreements to which ZGC is party to ensure that there are no lapses at any given time that could negatively impact company value.

    Qualifications and experience
    a. Professional Qualifications
    Full Grade 12 Certificate
    Bachelor’s Degree Economics, Commerce, Finance, Business Administration or its equivalent. Master Degree and or Chartered Financial Analyst (CFA) level 1 in a relevant field will be an added advantage.

    b. Minimum Relevant Pre-Job Experience:
    4 years experience in a similar position.

    c. Skill Specifications:
    Negotiation skills
    Communication skills
    Computer skills

    d) Other Attributes (Personality Traits)
    Persuasive and Pleasant

    e) Valid Driver’ s license

Zambia Gold Company Limited provides equal employment opportunities to all Zambians on merit without discrimination on the basis of age, gender, colour, tribe, disability, or religion.

Interested, suitably qualified and experienced persons should send their application together with certified copies of Academic and Professional certificates; a detailed Curriculum Vitae with traceable references and copy of the NRC should reach the undersigned not later than Friday, 5th March, 2021.

Only shortlisted candidates will be responded to.

Head Human Resources and Administration
Zambia Gold Company Limited
Subdivision F/377a/30/B
Kudu Road, Kabulonga
LUSAKA

Email: jobs@zccm-ih.com.zm

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job advertisement for Investments Manager and Investments Analyst positions

 
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First Quantum sees no ‘contagion’ risk in Zambia after Mopani deal – COO

 First Quantum Minerals FM.TO sees no risk of nationalization in Zambia following the sale last month of Mopani Copper Mines to the country’s mining investment arm ZCCM-IH, the Canadian miner’s chief operating officer, Tristan Pascall, said on Wednesday.

“We don’t see any contagion or any element or risk in that more broadly in Zambia,” he said on a call.

Zambia became Africa’s first pandemic-era sovereign default in November, but ZCCM-IH in January agreed to take on $1.5 billion in debt for Glencore’s GLEN.L Mopani stake, making it the sole owner of the mine.

ZCCM-IH ZCCM.LZ has said it expects to find a new investor for Mopani by the end of the year as it looks to boost copper output from a little more than 34,000 tonnes to 150,000 tonnes.

First Quantum, which previously held 16.9% of Mopani, operates the Kansanshi and Sentinel mines in the country.

The miner aims to resolve talks with the Zambian government over expansion of the smelter at Kansanshi before August elections, Pascall said. First Quantum wants a deal that allows it to deduct royalties from costs, he said.

He said efforts to sell minority stakes in the Zambia mines continue, but the company has to take rising copper prices into account.

“That’s the challenge for copper producers looking to embark in M&A,” he said.

 

Source : https://www.nasdaq.com/articles/first-quantum-sees-no-contagion-risk-in-zambia-after-mopani-deal-coo-2021-02-17
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CBU Students Back Govt Move On Mines

Collins CHAMA-THE Copperbelt University Students Union-COBUSU has hailed Government’s decision to acquire the majority stake in Mopani Copper Mines-MCM.
COBUSU President LAWRENCE KASONDE says the decision would NOT have come at a better time than NOW.

Mr. KASONDE was speaking during the launch of the ‘Zambia for Zambians Campaign’. He said Government has again demonstrated patriotism by ensuring that the mine is handed back to Zambians, through ZCCM-IH.

Mr. KASONDE said the newly launched organisation will engage stakeholders such as the Mine Workers Union of Zambia -MUZ, the National Union of Miners and Allied Workers-NUMAW and the Ministry of Mines over the takeover of the mine.  He said the country has a pool of competent human resource that can successfully run and manage the mine profitably.

Mr. KASONDE said there is NO need for the country to engage expatriates in fields where locals are ably qualified.
Government recently acquired ninety percent shares in Mopani Copper Mines-MCM through ZCCM-IH, a move that has been applauded by a cross section of society.

 

Sources : https://www.znbc.co.zm/news/cbu-students-back-govt-move-on-mines/