Konkola Copper Mines

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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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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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Zambian court denies Vedanta attempt to halt Konkola Copper Mines split

(The Southern African Times) – A Zambian court on Monday dismissed a motion by miner Vedanta Resources’ seeking to stop a state-appointed provisional liquidator from splitting up its Konkola Copper Mines (KCM) unit and selling the assets. 

The ruling is a blow to the Indian-owned mining company which has said it would fight any attempt by Zambia to sell KCM to third parties.

Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when the Zambian government, which owns 20% of KCM through state mining investment firm ZCCM-IH, handed control of the mine to a liquidator.

Judge Winnie Sithole-Mwenda discharged a Jan. 18 injunction order which Vedanta had sought to restrain Provisional Liquidator Milingo Lungu from splitting KCM and selling the assets. Lungu has previously said asset disposal is KCM’s last remaining option 

Vedanta Resources declined to comment on the ruling. 

The provisional liquidator said: “As KCM we welcome the ruling.”

Lungu said the order that instated him as provisional liquidator set out powers including the ability to split and sell the company. 

In a restructuring announced in December, Lungu said KCM would be split into two subsidiary companies: KCM SmelterCo Limited and Konkola Mineral Resources Limited, effective Feb. 1. 

While the split was delayed by Vedanta’s injunction order, Lungu on Monday told Reuters he is confident the two entities will begin to operate soon.

Sithole-Mwenda cited procedural reasons in dismissing the order.

“The ex parte Order of Injunction dated 18th January 2021 is, accordingly, discharged forthwith,” she wrote in the ruling. 

The ruling awarded costs to the defendants (the provisional liquidator and KCM) and denied leave to appeal. 

Vedanta and Zambia are still in arbitration proceedings in London over the KCM dispute, which began when the government accused Vedanta of failing to honour licence conditions, including promised investment. 

Vedanta has previously denied that KCM broke the terms of its licence.

Zambia’s Court of Appeal in November ordered a halt to KCM liquidation proceedings, to allow Vedanta and ZCCM-IH to proceed to arbitration. ZCCM-IH is appealing that ruling.

 

Source : https://thesouthernafricantimes.com/zambian-court-denies-vedanta-attempt-to-halt-konkola-copper-mines-split
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Zambian court denies Vedanta attempt to halt Konkola Copper Mines split

LUSAKA (Reuters) – A Zambian court on Monday dismissed a motion by miner Vedanta Resources’ seeking to stop a state-appointed provisional liquidator from splitting up its Konkola Copper Mines (KCM) unit and selling the assets. The ruling is a blow to the Indian-owned mining company which has said it would fight any attempt by Zambia to sell KCM to third parties.

Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when the Zambian government, which owns 20% of KCM through state mining investment firm ZCCM-IH, handed control of the mine to a liquidator.

Judge Winnie Sithole-Mwenda discharged a Jan. 18 injunction order which Vedanta had sought to restrain Provisional Liquidator Milingo Lungu from splitting KCM and selling the assets. Lungu has previously said asset disposal is KCM’s last remaining option

Vedanta Resources declined to comment on the ruling. The provisional liquidator said: “As KCM we welcome the ruling.” Lungu said the order that instated him as provisional liquidator set out powers including the ability to split and sell the company.

In a restructuring announced in December, Lungu said KCM would be split into two subsidiary companies: KCM SmelterCo Limited and Konkola Mineral Resources Limited, effective Feb. 1. While the split was delayed by Vedanta’s injunction order, Lungu on Monday told Reuters he is confident the two entities will begin to operate soon.

Sithole-Mwenda cited procedural reasons in dismissing the order.  “The ex parte Order of Injunction dated 18th January 2021 is, accordingly, discharged forthwith,” she wrote in the ruling.

Source: https://www.reuters.com/article/us-zambia-mining-vedanta-idUSKBN2A12IO
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Cautionary Announcement on KCM from ZCCM IH

Economy, Opinion, ZCCM-Investment Holdings Plc

Written by 

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019, concerning the filing by ZCCM-IH of a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”), the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”) and the legal proceedings commenced in the High Court of South Africa and applications made to the Zambian High Court by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”).

Shareholders are informed that Vedanta appealed against the decision of the High Court which denied them their application to stay the liquidation proceedings and refer the matter to arbitration. The Court of Appeal on 20 November 2020 ruled in favour of Vedanta and stayed the liquidation proceedings and referred the matter to arbitration.

ZCCM-IH intends to appeal against the decision of the Court of Appeal and to stay the judgment.
ZCCM-IH will provide details on this matter, as it progresses, in due course.

In the meantime, 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
Issued in Lusaka, Zambia on07 January 2021

Source: http://fizambia.com/?p=9598
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Cautionary Announcement on KCM from ZCCM IH

Shareholders of ZCCM Investments Holdings Plc (“ZCCM-IH”) are referred to the announcement dated 23 May 2019, concerning the filing by ZCCM-IH of a petition in the High Court of Zambia for the winding up of Konkola Copper Mines PLC (“KCM”) on 21 May 2019 (the “Petition”), the appointment by the Court of Mr Milingo Lungu as provisional liquidator of KCM (the “Provisional Liquidator”) and the legal proceedings commenced in the High Court of South Africa and applications made to the Zambian High Court by Vedanta Resources Limited and Vedanta Resources Holdings Limited (together “Vedanta”).

Shareholders are informed that Vedanta appealed against the decision of the High Court which denied them their application to stay the liquidation proceedings and refer the matter to arbitration. The Court of Appeal on 20 November 2020 ruled in favour of Vedanta and stayed the liquidation proceedings and referred the matter to arbitration.

ZCCM-IH intends to appeal against the decision of the Court of Appeal and to stay the judgment.
ZCCM-IH will provide details on this matter, as it progresses, in due course.

In the meantime, 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
Issued in Lusaka, Zambia on07 January 2021

 

Source : http://fizambia.com/?p=9598
Investee Companies, Investee Company News, ZCCM-IH, ZCCM-IH News

ZCCM-IH to appeal court decision asking it to enter arbitration with Vedanta

ZAMBIAN mines minister, Richard Musukwa, said the country’s government remained steadfast in its desire to find a buyer for control of Konkola Copper Mines (KCM), currently owned by Vedanta Resources.

“It is still the government’s wish to find a new equity investor with technical and financial capacity to recapitalise the mine and operate it effectively,” Musukwa said after the state mining arm ZCCM-IH signalled its intention to appeal a court ruling in favour of Vedanta.

Earlier this month, a Court of Appeal ruled that ZCCM-IH should go into arbitration with Vedanta regarding disputes related to KCM. Vedanta owns 80% of KCM with ZCCM-IH owning the balance. Musukwa, however, said the country wanted KCM to be put into liquidation proceedings.

In 2019, Zambia accused Vedanta of failing to live up to its investment and dividend promises and barred the Indian company from accessing KCM assets. Vedanta argued that any dispute between shareholders should be negotiated in terms of their agreement.

“ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Musukwa told Zambia’s parliament on Thursday.

Potential buyers of KCM were awaiting a resolution to the dispute, Musukwa said, adding that steps taken by the government should not be “considered as nationalism”.

Vedanta was not immediately available for comment, said Reuters.

Source: miningmx
Investee Companies, Investee Company News

UPDATE 1-Zambia to appeal court ruling backing Vedanta in KCM mine dispute

LUSAKA, Nov 26 (Reuters) – Zambia’s state mining arm ZCCM-IH plans to appeal a court ruling in favour of Vedanta , which has sought arbitration in a dispute over its jointly owned copper mine that is facing liquidation, the mining minister said.

India-based Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when Lusaka appointed a liquidator for the mine.

 

“ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Mining Minister Richard Musukwa told parliament on Thursday.

Last week, a Zambian court ordered a halt to liquidation proceedings for Konkola Copper Mines (KCM) to allow Vedanta and ZCCM-IH, which owns 20% of the operation, to proceed to arbitration.

Potential buyers of KCM were awaiting a resolution to the dispute, Musukwa said, adding that steps taken by the government should not be “considered as nationalism”.

“It is still the government’s wish to find a new equity investor with technical and financial capacity to recapitalise the mine and operate it effectively,” he said.

Vedanta was not immediately available for comment. (Reporting by Chris Mfula; Writing by Zandi Shabalala; Editing by Edmund Blair)

Source: Reuters 
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KCM dispute to go to arbitration

Zambia’s Court of Appeal has ruled that Vedanta can proceed to arbitration with state mining firm ZCCM, in a dispute over the Indian mining major’s copper assets in the central south African nation.

Vedanta’s 79.4% owned Konkola Copper Mines (KCM) in Zambia were seized and ordered to be liqudated in May 2019 over alleged mismanagement.
The assets at the heart of dispute are KCM’s Nchanga copper smelter, the largest in Zambia, and the Konkola and Nchanga mines.

The Indian mining giant has invested more than $3 billion in the asset since acquiring it from Anglo American in 2004, according to Vedanta’s website. The remaining stake is held by ZCCM.
KCM’s provisional liquidator, Zambian lawyer Milingo Lungo, said the latest court ruling, in Ndola on November 20, will let the parties proceed to arbitration to settle the dispute.
During the arbitration process, Lungo will remain in control of KCM operations as mandated by the Zambian High Court in May 2019.

In November 2019, Lungo told Fastmarkets that the best option was to increase the value of the disputed KCM assets and ready them for a new owner.
But the latest ruling comes at a time when Covid-19 uncertanties are making it more difficult for major miners and smelters around the world to attract investors to buy assets or to help with developmental and operational costs.

The Zambian government previously approached different parties, including China Non-Ferrous Metal Mining Group (CNMC) over sale of KCM’s operations. However, legal risks, existing debts and operational issues have made KCM sale difficult.

When the Zambian government originally filed the liquidation order in May 2019, it sent shockwaves through the Zambian copper industry.

Liquidator Lungu said Vedanta’s deferral of a service fee payment to contractors and staff had led to output disruptions and that had prompted the government to step in at Nchanga and Konkola.
Since the liquidation order, Vedanta has been actively defending its rights under international law to proceed into arbitration with the Zambian state mining firm.

Zambia is the second-largest copper producing country in Africa and its copper exports are a major source of foreign income. One of its biggest export category is intermediate copper products – blister copper and anodes.

Fastmarkets’ spot refining charge (RC) for 98-99% blister copper on a cif China basis, stood ta $150-160 per tonne at the end of last month.
Julian Luk

Source: Zambia Watchdog
Investee Companies, Investee Company News, Uncategorized, ZCCM-IH, ZCCM-IH News

Why ZCCM IH cautionary notice on KCM is timely

ZCCM IH recently informed the market on the outcome of the tribunal proceedings which sought to determine whether the Provisional Liquidator at KCM would continue in office or not following Vedanta Resource Limited and Vedanta Resources Holdings Limited pursuing the matter. The ruling was in favor of ZCCM IH by way of the arbitrator dismissing the application by the Vedanta Group.

“In compliance with the requirements of the Securities Act No. 41 of 2016, shareholders are informed that on 23 March 2020, the tribunal appointed in arbitration proceedings commenced by Vedanta against ZCCM-IH dismissed an application by Vedanta for an interim measure requiring ZCCM-IH to withdraw the Petition and procure the removal of the Provisional Liquidator from office”, read a statement issued by ZCCM IH’s Company Secretary Chabby Chabala on 10th November 2020 in Lusaka.

Under the section relating to consideration of applications for proposed take-overs and mergers in the Securities Act of 2016, section 134(4)(b), which states that the disclosure of timely and adequate information to enable shareholders to make an informed decision as to the merits of an offer, ZCCM IH was compelled to provide this timely update to investors.

The market has been waiting patiently for the announcement of this particular outcome. Part of the composition of the market is potential investors who, among other things, consider all matters of concern such as environmental and internal factors.

With knowledge on the outcome of know environmental factors, the investment decision is influenced. In the case of KCM, the proceedings with the arbitrator placed a pebble in the timeline for an investor decision to be made. Hence, clarity in the matter now paves the way for an astute investment decision to be made going forward.

However, matters outside the control of either party involved in this particular case is Country Risk. At the moment, many investors have been following with intent the issue of the Ministry of Finance’s deliberations with Euro Bondholders and Chinese Lenders. The outcome of these discussions has never been more important in the investment journey of Zambia.

Fitch, Moodys, and S&P credit rating agencies all place Zambia’s credit rating as a country with substantial risks. Some of these risks include the risk of default. Until recently, the Ministry of Finance has been in discourse with Bondholders and Chinese lenders for a possible moratorium of facilities following the Covid 19 pandemic. Zambia is not the only country to engage its lenders in such a manner. Argentina and Mozambique also engaged the services of Lazard, a world-leading financial advisory and asset management firm, to aid in restructuring conversations that would also involve difficult discussions with lenders.

With a myriad of environmental factors, mostly weighted towards those that are not within the investment entity’s control, investors will be watching very closely with sand in their hour glasses before investment decisions can be made.

Source: Financial Insights