Securing Industries and Jobs

GOVERNMENT and the Mine Workers Union of Zambia (MUZ) have shared interests in trying to keep Chambishi Metals operational and hence the efforts to stop the institution from being closed.

This is hardly the time for miners to start agitating for salary increments which mining companies cannot afford.

The miners should care about maintaining jobs instead of pushing for wage increments in this tough economic climate when companies are struggling to stay afloat.

We want to advise the more than 200 miners from Mopani Copper Mines who marched to Katilungu House in Kitwe, the headquarters of MUZ, to protest over the seven percent salary increment which the giant mining firm has offered them, to think of their colleagues who are no longer in employment.

When companies are struggling with operational costs, it is not the time to start pushing for an increment that might not be sustainable.

We think that the most important thing is to ensure that companies are paying what is affordable and also able to keep operations going.

This is what both government and the union are fighting for – job security.

While the government is pushing the current management at Chambishi Metals to recapitalise and keep the operations going, the workers want a new investor altogether.

Chambishi Metals proposed putting the operations on care and maintenance for two years because of failing to secure concentrates to keep the company going. The problem has been compounded by the Democratic Republic of Congo (DRC) refusing to export their concentrates after establishing their own smelters.

Late last year, it emerged that mining companies had scaled down on operations because of a five percent import duty on concentrates. The mining companies claimed the five percent import duty was costly and chose to reduce and in some cases, to stop altogether the importation of the concentrates.

This seemed to have spurred the DRC to start its own smelters and now, they do not want to export copper concentrates. An unfortunate development with a cascading impact on the mining sector.

However, we think that government and the mining corporations need to sit and iron out such differences to avoid creating industrial shocks, which this economy can hardly afford.

For the past one year, the mining industry has gone through some tumultuous period beginning with the uncertainty of proposed tax changes from value added tax (VAT) to sales tax, with the latter being roundly condemned.

The instability of the exchange rate coupled with the prolonged load-shedding from the power company, have all had a negative impact on the sector.

Despite the VAT being maintained after overwhelming public outcry, the mining sector has continued to struggle with some companies threatening to lay off large numbers of workers.

This is what Government is trying to prevent by insisting that Chambishi Metals continue operations and retains the workforce.

Perhaps, the workers through their union, have more direct experience and know what is really obtaining on the ground, hence their suggestion for a new investor.

Job security is the most important factor that unions are most concerned with when handling labour matters involving a company faced with closure or in this case being put on care and maintenance.

MUZ feels that Eurasian Resource Group (ERG) must go because it has failed to run Chambishi Metals effectively but if Government wants them to continue, they must be subjected to integrity tests.

This was after Mines and Minerals Development Minister Richard Musukwa disclosed that Chambishi Metals had been directed to resume operations in the next three months in the wake of a number of local and international investors eyeing to take-over the company.

Mr. Musukwa said Government had rejected the plan by the mining firm to halt operations for two years due to operational challenges and that management had been asked to invest in a processing plant that would treat the kind of material the firm had.

Since Government is prepared to give a waiver in special cases, such as this one, it now just remains for the concerned parties to sit down.

Government is willing to be flexible on the five percent duty in so far as it affects Chambishi Metals, and we hope that management would take up this offer. If indeed the import duty on concentrates was a major factor, then the issue is on the way to being resolved.

Mr Musukwa assured that Government was ready to give a special waiver to the mining firm for it to remain operational.

Source: Daily Nation

Chambishi Metals Extract from 2019 Annual Report

The Company recorded EBITDA of ZMW169.06 million (US$15.1 million) for the year ended 31st December 2018 compared to ZMW242.95 million (US$21.7 million) in 2017. Copper produced for the 12 months to 31st December 2018 was 37,006 tonnes compared to 36,153 tonnes in 2017 and 1,614 tonnes of cobalt was produced vs 2,520 tonnes in 2017. There were no dividends paid during the year under review (2017: Nil).

Chambishi Metals Extract from 2018 Annual Report

The Company had revenues of K3,470.79 million (US$363.5 million) for the year ended 31st December 2017 ahead of budgeted K2,472.04 million (US$258.9 million). EBITDA was K207.94 million (US$21.7 million) compared to budgeted K276,900 (US$29,000). Copper produced for the 12 months to 31st December 2017 was 36,153 tonnes and 2,520 tonnes of Cobalt was produced.

Chambishi Metals Plc has budgeted US$9 million for capital expenditure for 2018 which has been earmarked for the Acid Plant, Copper and Cobalt Processing and some analytical services.

The Eurasian Resources Group has confirmed its intention to continue to provide financial support to the Company to enable it to continue its operations and meet its obligations.

There were no dividends paid during the year under review (2016: Nil).

Chambishi Metals Extract from 2017 Annual Report

The Company made a profit before tax of K43.42 million (US$4.4 million) (2015: Net loss of K260.83 million
(US$40.1 million) and its current liabilities exceeded its current assets by K2,776.79 million (US$270.6 million) (2015: net current liability position of K1,885.63 million (US$289.9 million). The Company also had a deficit in shareholder funds of K1,232.42 million (US$120.1 million) (2015: Deficit in shareholder funds of K809.80 million (US$124.5 million).

The Eurasian Resources Group has confirmed its intention to continue to provide financial support to the Company to enable it to continue its operations and meet its obligations.

No dividends were paid in 2016 (2015: Nil).

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.