Investee Companies

Annual Report Summaries

Chibuluma Mines Extract from 2016 Annual Report

Net revenue for the financial year ended 31st December 2015 was K656.9 million (US$66.5 million) (2014: K691.4 (US$106.3 million)). Net loss over the same period was K312.2 million (US$31.6 million) (2014: K144.4 million (US$22.2 million profit)). Chibuluma Mines Plc’s (CMP) cash position reduced to US$0.056 million as at 31st December 2014 (2014: US$8 million). The loss was mainly due to the low copper prices and an impairment loss of US$13.4 million on property, plant and equipment.

Production was negatively affected by the poor availability of mine equipment, which, coupled with low copper prices led to constrained cash flow at the company. Consequently, CMP embarked on cost saving measures and a survival plan with emphasis on reduced and targeted mining and processing activities at the mine.

As mine reserves get exhausted CMP has been exploring the Chifupu project for the last two years to extend the life of mine and have been actively exploring new mining activities. However, due to cash flow constraints, works on the Chifupu project have reduced and CMP is evaluating the option of starting production early at the Chifupu project to recover some of the investments incurred on the project. No dividends were paid for the financial year ended 31st December 2015 (2014: US$10.8 million).
Annual Report Summaries

Chambishi Metals Extract from 2016 Annual Report

During the financial year ended 31st December 2015, Chambishi Metals Plc (Chambishi) generated total revenues of K2,015.3 million (US$204 million) (2014: K1, 883 million (US$289.50 million). The net loss was at K396.1 million (US$40.1 million) (2014: K88.5 million (US$13.6 million).

ZCCM-IH has been engaging with Chambishi on the perennial losses and it was agreed that Chambishi would have to scale up production to be able to generate enough gross profits to cover all its operational costs and to generate profits. This would necessitate creating further capacity particularly for copper beyond the current capacity of 55,000 tonnes. A study is being undertaken to assess the financial implications of this proposal.

During the period under review, Chambishi commenced a research project to improve revenue at the plant. The research involves plant optimization, improved technology at the plant to improve recoveries and a global market study to identify suitable concentrates from which high value metals such as gold and silver can be extracted.
Investee Company News

Mopani Coppers mines is to create more than 4 000 jobs

Mopani Coppers mines is to create more than four thousand jobs once the sinking of three shafts at a cost of one point one billion United States dollars are completed.

Meanwhile, Mopani Chief Executive Officer Johan Jensen says the mining firm has designed the WAY strategy to enhance efficiency and profitability.

ZNBC’s Musenge Mulimba reports that the one point one billion United States dollars shafts are being built in Kitwe at Mindola, Synclinorium and Mufulira deep.

Chief Government Spokesperson Chishimba Kambwili says the one point one billion united states dollars project is a clear demonstration of the confidence that Glencore has in the Zambian economy under the leadership of president Edgar Lungu.

Mr. Kambwili was speaking in Kitwe during the launch of the Mopani way industrial theatre presentation at the little theater.

And Mopani has invested about seventy thousand US Dollars in renovating the Kitwe little theatre.

Mr. Kambwili urged all stakeholders mainly the employees, union leaders and contractors to support Mopani Copper mines.

Meanwhile, Mopani Copper Mine Chief Executive Officer Johan Jensen said the Mopani Ways is the strategy the company intends to employ to overcome the current challenges being faced.

Source: Lusaka Times
Investee Company News

Konkola Copper Mines announces the death of Mr Fighton Simukonda, the Head Coach of Nchanga Rangers Football Club (NRFC)

HINGOLA, 17 February 2015, it is with deep sorrow that Konkola Copper Mines announces the death of Mr Fighton Simukonda, the Head Coach of Nchanga Rangers Football Club (NRFC).

The late Mr Simukonda died at about 06:00 hours on 15 February 2015, at the Konkola Mine Hospital in Chililabombwe, after an illness. The funeral will be held at House Number 68, 8th Street, Nchanga South in Chingola.

KCM Management and staff pass their heartfelt condolences to the bereaved family. The company wishes the family God’s comfort, strength and guidance during this difficult moment.

The deceased was appointed Head Coach of Nchanga Rangers in 2012, after coaching stints with several top Zambian clubs.

During his spell with Nchanga Rangers, he brought stability to the club and raised several young players, who are now with various youth national teams and the Chipolopolo national team.

We join the rest of the nation in mourning our deceased football icon – one of Zambia’s most decorated football players and coaches.

Investee Company News

First Quantum evaluating alternative power sources for Zambia mines

Providing an update on power supply to its Zambian operations, dual-listed base metals miner First Quantum Minerals noted on Tuesday that its Kansanshi mine and smelter, as well as its Sentinel project, in the North-Western province, were being consistently provided with a total of about 285 MW, despite the country’s electricity woes.

Nevertheless, the miner revealed that is was also evaluating a number of options to independently secure power for its operations both in the near and long term.

Zambia’s electricity shortage and weaker copper prices – owing to slow growth in China – have put the country’s mining industry under pressure, threatening output, jobs and economic growth in Southern Africa.

However, the Zambian Chamber of Mines revealed last week that the country’s copper production increased to 711 515 t in 2015 from 708 000 t the previous year, which was mostly attributed to the February ramp-up at First Quantum’s Sentinel mine.

POWER SUPPLY IN ZAMBIA

In a show of support for its host country, First Quantum explained that Zambia was in the midst of its annual rainy season, which generally starts in November and runs through April. With the onset of the rains, the catchment area that feeds the Kariba dam, from which the majority of the country’s electricity is generated, was being recharged.

The river flows at all four upstream measuring stations above Kariba dam were all showing significant increases in flow rates over the past month. Water from the catchment area typically makes its way into the Kariba dam over a period of months with dam recharge occurring from January to June.

In addition to this annual replenishment, electricity availability would be augmented by about 420 MW of new in-country capacity expected online during the current year from projects nearing completion, including 300 MW of thermal power and 120 MW hydropower.

Zambia’s State-run power company Zesco had been importing power from neighbouring countries and recently announced that it would receive additional power imports of up to 300 MW from South Africa’s State-owned power utility Eskom, as well as 200 MW from an independent power producer.

First Quantum also confirmed that plans to reduce its net debt position by over $1-billion by the end of March, 2016, through a combination of asset sales and other strategic initiatives, were going ahead with the continued support of its secured lenders

Source: Zambian Mining Magazine
Investee Company News

Mine to save jobs

CHIBULUMA Mines on the Copperbelt is to restructure its operational plan for 2016 and develop the Chifupu copper project in order to prolong the mine’s lifespan from 2018 to 2022.

Chibuluma Mines board chairman Jackson Sikamo said the restructuring plan was scheduled to be carried out in the first quarter of 2016.He said that would result in 263 employees being made redundant.

Mr Sikamo said in order to mitigate the magnitude of job losses and ensure decent alternative jobs, the company has made arrangements for a significant proportion of the employees affected to be taken on by the contractors who would carry out the outsourced services.

He said for the company to continue the development of the Chifupu copper project to prolong the mine’s life from 2018 to 2022, the mining output from Chibuluma South will reduce to 27,000 tons per month from 45,000 tonnes.

“This adopted option will be implemented expeditiously whilst ensuring that all the operational and business risks are identified and a systematic risk management mechanism is put in place to address them,” he said.

Chibuluma Mines Plc was incorporated in October 1997 following the privatization of the then Zambia Consolidated Copper Mines Limited.

The parent company is Metorex (Pty) Limited of South Africa who own 85% of shares while ZCCM Investments Holdings Plc own the remaining 15%.

Metorex is in turn wholly owned by Jinchuan International of China.

Source: Daily Nation
Investee Company News

Chibuluma mines confirms 263 jobs are to go

Chibuluma Mines Plc, majority owned by Metorex of South Africa has confirmed that it is sacking off 236 workers as part of its restructuring process.

The firm says the restructuring plan is scheduled to be carried out within the first quarter of 2016.

The company says the restructuring process is inevitable as its Chibuluma South Mine is fast approaching its end of life.

This is contained in a statement released by Chibuluma Mines Plc – Board Chairman Jackson Sikamo.

‘The mining and geotechnical conditions have become more challenging with the costs of mining continuously rising. Chibuluma Mines Plc’s performance in the financial year 2015 has been characterized by low production volumes and this coupled with the continuously falling copper prices has put severe pressure on the Company’s cash-flow,’ Mr. Sikamo said.

‘The Company is in a loss making situation which, if left unaddressed may force the Company to suspend its operations permanently. Management has therefore resolved to restructure the business, in order to ensure the survival of the Company.’

Mr. Sikamo added that the restructuring places focus on reducing mining rates, substantially outsourcing mining and ore transfer activities and significantly reducing overhead expenditure.

‘Through this process, various mine operating survival options have been considered and though the available options are not economically viable, the Company through its majority shareholder Metorex (Pty) Limited has made a strategic long term decision and selected the survival option with the least losses over the life of the mine,’ he said.

Mr. Sikamo outlined the measures such as the continued development of the Chifupu Copper development project to ensure prolonged Mine life from 2018 to 2022.

He also revealed that management has decided to reduce mining output from Chibuluma South to approximately 27,000 tons per month from 45,000 tons and outsource mining and processing plant ore transfer activities as part of the restructuring plan.

Chibuluma Mines Plc was incorporated in October 1997 following the privatization of the then Zambia Consolidated Copper Mines Limited.

The Company’s copper mining operations are located in Lufwanyama district.
Investee Company News

Nationwide power outage impacts KCM operations

HINGOLA, 11TH December 2015, Konkola Copper Mines (KCM) operations and production have been affected by a countrywide power blackout which occurred from about 10:35 PM on Thursday, 10th December, 2015.

Following the power outage, KCM was able to bring on line 16MW of power using its own emergency diesel generator set at Konkola mine supported by another 40MW in emergency power supplied by the CEC from its gas turbines. This power allowed KCM to continue to pump water and withdraw its employees in a planned and disciplined manner. All employees at both the Nchanga and Konkola underground mines were withdrawn without injury or incident.

However, around 04:30 AM on Friday, KCM lost the emergency power supply after the national power system tripped as attempts were being made to reconnect the company to the national grid. Full supply of power was finally restored to KCM at about 09:40AM today. Production was suspended during the power outage.

Consequently, it will take KCM about 16 hours to restart operations at its Nchanga smelter in Chingola. The company will also suffer some slight loss of production at Konkola while pumping out of water continues from the deeper sections of the mine.

The rest of the operations are being systematically returned to production following full safety and environmental checks.

Shapi Shachinda

Manager Public Relations & Communications

Mobile: 0978 871958
Investee Company News

First lady says KCM is trusted development partner

Zambia’s First Lady Esther Lungu has said Konkola Copper Mines (KCM) is a trusted development partner for the country following its expansive social investments in the last 11 years.

The first lady said this when she addressed hundreds of residents of Shimulala, Helen and Kakosa settlements on the outskirts of Chingola, where the company’s corporate head office is located. She visited sites of KCM’s corporate social responsibility (CSR) programmes.

Mrs Lungu commissioned the new Helen Bridge which was constructed by KCM at a cost of Zk877,635.00 (US$82,640.00). She also laid a foundation stone for an Out-Grower project seeking to empower local farmers and toured other KCM-funded CSR projects.

The newly constructed Helen Bridge has eased movements of over 4,000 people living in the area as they carry produce and other goods to markets in Chingola and beyond. It also connects people to health and education facilities outside of their settlements.

The Nabona out-growers programme targets to provide about 500 small and medium scale farmers with access to markets in an organised way to ensure quality and planned production.

I want to urge the community to continue to work closely with Konkola Copper Mines (KCM) because this is your trusted partner. KCMhas stood by you in good and difficult times,

she said.

“I must commend KCM for providing 22 hectares of land on lease to proprietors of Nabona as this will create employment for farmers and the young people,” Mrs Lungu said.

Mrs Lungu also paid glowing tribute to KCM for empowering women with life-saving skills in cattle rearing, tailoring and farming.

“I want to attest that it is evident that KCM has spent US$160 million in communities over the last 11 years,” Mrs Lungu told residents after touring some CSR projects, including the cattle restocking project.

I have seen some of the key projects where these funds have been spent.

She said it was heartening that the company was focusing on four corporate social responsibility pillars, namely education, health, sustainable livelihoods and sport.

The first lady encouraged KCM to continue uplifting the lives of people in its areas of operations. KCM has given out over 596 cattle in Chingola, Chililabombwe and Nampundwe and also provided 2,327 goats to 26 self-help groups.

Mrs Lungu said social investments by KCM fitted into President Edgar Chagwa Lungu’s vision for a public private partnership models for diversifying the economy and shoring up growth.
Investee Company News

Konkola Copper Mines here to stay

hingola, 4th November 2015 – Konkola Copper Mines (KCM)has reaffirmed its commitment towards Zambia’s development agenda despite the current challenges it is facing that have affected its operations.

KCM Chief Executive Officer Steven Din says the company’s investment in the mines amounting to $3 billion dollars over the last eleven (11 years) is a clear demonstration of its commitment to this development agenda.

Mr. Din has said this in a statement in commemoration of the company’s 11th anniversary which falls today.

Mr. Din notes that despite the current challenges KCM is facing such as low copper prices and power deficits, the company’s 50 year vision will ensure that KCM still remains in operation for a long time to come through enhanced sustainable operations of its mines.

He adds that to achieve this agenda KCM is examining local economic development opportunities aimed building up the economic capacity of the communities around KCM’s operations to improve their economic futures and the quality of life for all.

He also highlighted the company’s commitment to its CSR programmes in the areas of rural livelihoods, education, health and sports. KCM has spent more than $160million on its CSR projects since Vedanta acquired its interests in the company.

Hesays the company aspires to use the KCM assets as a catalyst to secure economic activity in the Copperbelt and surrounding areas for the next fifty years and beyond, long after KCM has ceased mining.

KCM is working a 50 year vision but this vision depends on the Copperbelt realizing its potential as an economic hub. Mining alone will not achieve this. Agriculture, tourism, logistics, services and trade will all need to make a contribution,

Mr. Din said.

The CEO is confident that with the right strategy, carefully executed in partnership with government, donors and civil society groups, KCM can add substantially to additional economic activity per year in non-mining sectors and create many jobs.

He further notes that generating employment beyond the life of the mines will be the single greatest economic legacy of KCM in the Copperbelt.