Kansanshi Workers In 7% Pay Rise

Kansanshi Mine PLC has awarded its unionized workers a seven per cent salary increase across the board.

This follows the signing of the 2020 collective agreement with the Mineworkers Union of Zambia (MUZ), National Union of Miners and allied workers (NUMAW) and United Mineworkers Unions of Zambia (UMUZ).

NUMAW president James Chansa, who spoke on behalf of other unions, said the negotiations were due to the many challenges in the sector.

Chansa said the unions will work towards ensuring adherence to agreed conditions and further urged workers to continue working hard.

Meanwhile, Kansanshi Mine PLC Human Resource Manager, Maimbo Silimi said the collective agreement includes a seven per cent increase in salaries and an adjustments to the funeral grant, among other conditions.

He said the mining firm has also introduced long service awards for employees reaching five, 10 and 15 years.

Silimi said Kansanshi Mine was cognizant of the importance of its workforce, hence the adjustments to their packages.

©Zambia Reports 2020.

Source: Zambia Reports

ZESCO’s Termination of CEC Bulk Supply Questionable – Energy Experts

A GROUP of energy experts has questioned Zesco’s motive behind the refusal to renew a Bulk Supply Agreement it entered into with the Copperbelt Energy Corporation (CEC) over 22 years ago.

On November 21, 1997, Zesco Limited and CEC entered into an agreement where the former was supplying power to the latter at wholesale, a deal that comes to an end on March 31 this year.

Since then, CEC has been supplying power to mining companies on the Copperbelt, as well as most mining residential areas.

The company is also the major financier of the Zambian premier league side Power Dynamos Football Club.

Last Friday, CEC informed its shareholders that energy minister Mathew Nkhuwa had notified management that the agreement would not be extended once it expires at the end of March.

Responding to the government’s decision, the Energy Advisory and Solicitation Institute (EASI) argued that CEC was already proven to be a responsible stakeholder in the energy sector.

EASI chairperson Chisakula Kaputu said the motive behind the government’s refusal to renew the agreement with CEC was highly questionable.

“Zesco has since the post 2000 commercialisation narrative still remained in the doldrums of a social enterprise with very little to show of a financially sustainable business model existing,” he said in a statement yesterday.
“…EASI believes that we have an energy sector at crossroads with pertinent issues of cost reflective tariffs, Electricity Supply Industry (ESI) sustainability and viability, reform uncertainty, legacy PPAs and BSAs, energy security, etc at the fore, as such transparency and good intent is demanded of all the energy sector players/stakeholders.”

Kaputu demanded clarification from the PF government on what he termed as an ambiguous statement.
He stated that both Zesco and CEC were key stakeholders in the energy sector, hence the need for the government to reflect on the decision.

“The energy sector needs CEC as an already proven key stakeholder and only second to Zesco in functional responsibility in the power generation, transmission, distribution and supply portfolios. The energy sector needs Zesco the most as sole owner of 66 per cent of national installed capacity and over 30,000 km of transmission and distribution national grid as well as custodian of [the] National Control Centre/systems operator functionality,” stated Kaputu. “Government’s decision on the nearing expiring ZESCO – CEC BSA must be taken in the best interest of the country and energy sector above all else. Ambiguity around the bold statement that the ZESCO-CEC BSA ‘will not be renewed’ after it expires on 31st March 2020 needs to be clarified at the earliest opportunity. In order to calm the anxiety of the mining load owners and Copperbelt Province energy users in general, the discussion/negotiation around the ZESCO-CEC BSA issue needs to be expedited with resolution made way ahead of the expiry date of 31st March 2020.”

According to a notice to shareholders, the government, through Nkhuwa and Zesco, had notified CEC that the Bulk Supply Agreement would not be renewed once it expired.

“In accordance with Section 81(1) of the Securities Act No. 41 of 2016, the Board of Directors of Copperbelt Energy Corporation Plc (“CEC” or “the Company”) advises the Company’s shareholders, and the market, that the power purchase agreement or Bulk Supply Agreement (“BSA”) between CEC and ZESCO Limited (“ZESCO”), entered into on 21 November 1997 is expected to come to an end on 31 March 2020,” company secretary Julia Chaila stated. “The Government of the Republic of Zambia (“GRZ”), through the Minister of Energy, and Zesco have notified CEC of their position that the BSA will expire on the date stated above and will not be renewed. GRZ and Zesco have expressed to CEC their commitment to continue facilitating an efficient and economic supply of power to consumers on the Copperbelt both during the validity of and post the BSA. CEC wishes to emphasise its unwavering commitment to use its infrastructure and capabilities in ensuring continued and seamless supply of power to all consumers on the Copperbelt now and after the BSA.”

Source: The Mast

Agarwal Mining Group Hit by Commodity Price Slump

Anil Agarwal’s mining group has reported a drop in half-year profits due to lower commodity prices.

Vedanta Resources, which was taken private by the Indian tycoon in 2018, said that earnings before interest, depreciation, taxation and amortisation fell 19 per cent to $1.4 billion in the six months to September. Revenues fell 5 per cent to $6.1 billion, mainly because of lower prices.

Vedanta Resources has operations in India, Africa and Australia, employing 65,000 people. It listed in London in 2003 but remained controlled by Mr Agarwal, 65. In 2018 Volcan Investments, his family trust, bought back the listed third of its shares.

Vedanta said that profits in its largest business, zinc, fell by 20 per cent to $479 million in the six months to…

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Source: The Times (UK)

Kansanshi Miners in Pay Rise

UNIONISED workers at Kansanshi Mining Plc have been awarded a seven percent salary increment effective today.
Kansanshi Mining Plc human resources manager Maimbo Silimi said the increment will go a long way in cushioning the cost of living.
Speaking during the signing ceremony in Lusaka yesterday, Mr Silimi said the increment has been awarded despite the operational challenges affecting the mining firm  CLICK TO READ MORE 

Source: Zambia Daily Mail

Serenje Set for Manganese Mining

MINING of manganese at Kabundi Mining Resources Limited will get underway soon after approval around community resettlement is concluded by the Zambia Environmental Management Agency (ZEMA), Zambia Consolidated Copper Mines -Investment Holdings (IH) said.
The K70 million project located in Serenje, and is a subsidiary of ZCCM-IH, will help to unlock the manganese potential thus enable the country to benefit from the increasing global demand for the commodity used in steel production and batteries CLICK TO READ MORE 

Source: Zambia Daily Mail

CEC Ready to tab into SAPP for Alternative Power if ZESCO BSA Reaches Stalemate

Copperbelt Energy Corporation (CEC) Plc says it geared to tap into the Southern African Power Pool (SAPP) as an alternative source of electricity, should its Bulk Supply Agreement (BSA) with Zesco Limited not be renewed.

And CEC says it cannot restrict electricity to Konkola Copper Mines (KCM) Plc as it has done in the past to defaulting clients for unpaid invoices because the mining company has started making some payments.

The BSA between Zesco and CEC is a 20-year agreement that underpins power supply to the Copperbelt and it is set to come to an end in March, 2020.

Ministry of Energy Permanent Secretary Trevor Kaunda disclosed that the BSA will not be renewed.

“Government made a decision earlier in the year, if you have been following the news, that when the Bulk Supply Agreement that is existing now comes to an end in March, next year, it shall not be renewed. I think that is the Cabinet decision that was made earlier in the year. It’s not a rumour, that’s just what it is. So, those are now the discussions that are taking place between the parties. Post-March, 2020, how does supply in the Copperbelt and, indeed, other areas look like? That’s the discussion which is in place, and at an appropriate time, the nation shall be updated once those discussions are concluded because, basically, we still have the rest of December up to March for those discussions in terms of the outlook,” Kaunda said in an interview in Lusaka.

But responding to a press query for an update on CEC’s progress on its BSA with Zesco, CEC senior manager corporate communication & investor relations Chama Nsabika stated that the Kitwe-based power utility was geared to tap into the regional market through the SAPP, the cooperation of the national electricity companies in southern Africa, as an alternative source of power should the stalemate with Zesco over its BSA persist.

“The alternative source of power would be the regional market. CEC has bilateral Power Purchase Agreements (PPAs) with regional utilities and can, if necessary, access some of this power to benefit the local market. Deploying this solution, obviously only makes sense in circumstances where the local market is unable to meet CEC’s requirements. It is cardinal that everybody recognises that the situation we are faced with requires concerted efforts at constructive engagement and putting in place a mutually acceptable solution in good time. CEC will continue to render quality service to all its customers, using its infrastructure and capabilities, to the benefit of both its mining and non-mining customers. While the solution to the BSA remains to be agreed, CEC believes that in time, a mutually-acceptable solution that safeguards the interests of customers and investors will be found,” Nsabika stated.

On the company’s ongoing dispute with Zesco over non-payment of retainers from power CEC sold to mining companies, Nsabika noted that the status quo remained.

“On 4th December, 2019, in accordance with the Lusaka Securities Exchange listings rules, CEC issued a further cautionary announcement advising the market that the matter is in progress and remains under adjudication. The status quo remains,” she added.

And Nsabika added that the company would not restrict power supply to KCM despite its outstanding debt for electricity supplied to the mine’s business units as it had started making payments.

KCM remained in receipt of power throughout this year despite its indebtedness to CEC.

“It is true that KCM remains CEC’s largest customer and any non-payment for power supplied has a negative impact, not only on CEC’s financial performance, but also on the financial well-being of the entire value chain; a fact we also reflected in our published half-year results for the period January to June, 2019. It is also true that any payment default would constrain CEC’s ability to meet its payments to Zesco. CEC has continued to work constructively with all stakeholders, including the government, KCM and Zesco in respect of the KCM situation and it is evident that all parties are committed to seeing a KCM that meets its payment obligations. KCM has since made some payment against the outstanding amounts. We, therefore, take the view that the option to restrict power is not necessary at this stage,” stated Nsabika.

Source: News Diggers

CEC Africa Extract from 2019 Annual Report

During the financial year ended 31 March 2019 CEC Africa’s revenue was ZMW1.35 billion (US$120.86 million) (2018: ZMW2.07 billion (US$217.17million). The net loss was at ZMW3.35billion (US$298.95 million) (2018: Loss ZMW 3.23billion (US$337.86 million).
CEC Africa associate company, North South Power Company Limited (NSP), contributed a profit of US$8.10 million (2017: US$4.60 million) and declared a dividend of NGN10.00 bn (US$27.00 million) in 2018. However, the Group continues to make a gross loss mainly due to tariff shortfalls in the electricity pricing regime and the increasing cost of energy arising from the Power Purchase Agreements signed between the Nigeria Bulk Electricity Company (NBET) and the generation companies. The cost of purchased energy increased by 19.00% to US$293.00 million between 2017 and 2018. The net loss, which increased by 1.00% to US$316 million between 2017 and 2018 continued to erode the shareholders’ equity.
No dividends were declared and paid by the Company during the year (2018: Nil).

Mopani Copper Mines Plc Extract from 2019 Annual Report

During the financial year ending 31st December 2018, Mopani Copper Mines (MCM) recorded net revenue of ZMW9.43billion (US$842.04 million) (2017: ZMW3.95 billion US$352.60 million).
The net loss for the period under review was at ZMW8.09 billion (US$ 722.85 million) (2017: ZMW2.77 billion US$ 290.12 million net loss).
During the year ending 31st December 2018, MCM produced a total of 59,302 tonnes of copper from own sources and 60,188 tonnes of copper from external third-party concentrates (2017:
41,738 tonnes from own sources and 57,131 tonnes of copper from third party concentrates). The significant growth in revenue is attributable to the scheduled increase in production at the recently developed mine sites.
Through gearing, MCM initiated heavy capital expenditure projects in efforts of developing the Mufulira Deeps and the Synclinorium Shaft over the last financial years. This has resulted in finance costs reducing net profits for the period under review amongst other factors. The value of shareholder loans as at 31st December 2018 was ZMW39.53 billion (US$ 3,242.66
With working capital balances excluding VAT at a 5-year low of ZMW 792.35 million (US$ 65.00 million) as at 31st December 2018, cash constraints have affected the ability to scale
production at the newly commissioned mine sites to optimal levels.
There were no dividends paid during the financial year ended 31st December 2018 (2017: Nil).

Lubambe Copper Mines Extract from 2019 Annual Report

Lubambe Copper Mine Limited (Lubambe) reported total revenues of ZMW1.24 billion (US$110.79 million) for the year ending 31 March 2019 (2018: ZMW517.37 million (US$54.18
million), falling below the budget of US$155 million but increasing from US$98.72 million in 2017. Operating costs were US$129 million, nearly at par with the budget of just below
US$130 million. Costs in 2017 were US$107.01 million. The year on year rise in costs was due to increased production volumes as well as mine redesign activities.
The loss for the year was ZMW 556.92million (US$49.74 million) (2018: loss ZMW 350.34 million (US$36.7 million))
In 2018 Lubambe had made substantial leaps in changing its mining and processing systems in a bid to raise production. Total copper ore mined was 1,316,109 tonnes, up from 840, 376 tonnes in 2017. Total contained copper produced was 23,689 tonnes, below the targeted 25,941 tonnes but significantly higher than the 14,891 tonnes produced in 2017.
Lubambe has continued to implement changes to the existing mine that should translate into the mine becoming profitable for the first time in 2020. In 2019, works on completing the Concept Study on the Extension Project will be accelerated so as to increase the certainty of the resource and prepare it for a Pre-Feasibility Study
There were no dividends declared during the year under review (2018: Nil)