Glencore will offload 90% Mopani shares to ZCCM-IH – Musukwa

MINES Minister Richard Musukwa says Glencore is planning to offload around 90 per cent of its collective shares in Mopani Copper Mines Plc to government through ZCCM-IH.

And Musukwa says ZCCM-IH will galvanise resources to ensure they manage and operate Mopani Copper Mines prudently.

Meanwhile, Musukwa says Konkola Copper Mines (KCM’s) operational performance has improved since the provisional liquidator Milingo Lungu’s appointment last year.

Speaking on Diamond TV’s programme, Costa, Sunday evening, Musukwa announced that Glencore, which held 73.1 per cent shares in Mopani, was planning on offloading its shareholding to ZCCM-IH, together with a further 16.9 per cent from Calisa Investment Corporation.

ZCCM-IH currently only holds a 10 per cent shareholding in Mopani, according to Musukwa.

“Zambia sits on a huge reserve in terms of mineralisation for copper and several other minerals. Mopani is sitting on huge resources, which can run in access of up to to 40 years, so it is very viable. So, we are very confident that we are able to navigate out of this critical time and ensure that the life of Mopani is sustained. Even from the Glencore perspective, in terms of the investments portfolio, which they have put in their operations is huge; billions of dollars in terms of a new schycotorium, new shaft…All these facets were as a result of Mopani and Glencore knowing very well that Mopani was sitting on a tenement that was viable and was able to sustain itself,” Musukwa said.

“ZCCM-IH has 10 per cent shares, Glencore has 73.1 per cent stake and a company called Calisa has 16.9 per cent. When ZCCM-IH, after this care and maintenance process commenced, ZCCM-IH, as a minority shareholder, submitted an expression of interest in increasing its shareholding in the company. I must report that graciously, Glencore, the majority shareholder, accepted favourably. Further to not only accepting the 73.1 per cent stake, Glencore has actually galvanized even the 16.9 per cent that sits on Calisa together making a total offer of 90 per cent to ZCCM-IH in order to ensure that they take full control of the company.”

Musukwa said Mopani faced a challenge of huge operational costs of highly-priced contracts and the engagement of a large number of contractors and expatriates.

“The huge challenge that Mopani has had been the cost profile of exploiting this resource. Government’s considered view is that we need to look at how best we can reduce the cost, increase production and ensure that the operations are done under safe rules. Mopani did indicate that they wanted to put the mine on care and maintenance, which is going to put in excess of 15,000 employees in the streets and the government did reject that proposal because it was inimical to the interests of our people. More also, it was inimical to sterilise a resource when we feel it can be exploited, economically, by ensuring that Mopani reduces its cost profile by stopping to procure highly-priced contracts and the engagement of a huge number of contractors and expatriates,” Musukwa said.

“So, basically, when they put up the care and maintenance (proposal), we constituted a technical team and the technical team revealed that they were overheads that were being developed by Mopani, which, in our view, if these overheads were reduced, the company can be viable. You will be interested to know that the technical team and experts and people from all walks of life have actually come across and given different perspectives of how to operate and run the mine going forward profitably. At a time like this, we hope that we can have a smooth managed exit in order to ensure that Glencore and the Zambian government can continue to enjoy a mutual relationship.”

And Musukwa said ZCCM-IH would galvanise resources to ensure the management and operation of Mopani was done prudently.

“There is no investor that comes to Zambia with a sack of money or, indeed, money held in some accounts in order to come and exploit these resources. The money that is invested in the mining sector is money that is generated through various vehicles from these mining entities because they have international confidence on the market. We think very strongly that this is a matter that Zambian players, through ZCCM-IH and other entities, are able to galvanise these resources going forward. If you propose to a woman, it means that you have the capacity to look after them in marriage that is why ZCCM-H has expressed interest. If it didn’t have the capacity, it was not going to express interest,” Musukwa said.

“ZCCM-IH could not be having money sitting on their profile of this magnitude in terms of a purchase of these shares. ZCCM-IH will be able to galvanise these resources through other entities, through other vehicles. In short, ZCCM-IH is being used as a platform and this is a time where Zambians should not be doubting where this money is coming from, Zambians should be able to organise themselves and look for stake in the company.”

He, however, stressed that the funds being mobilised to manage the acquisition of shares and the administration of Mopani would not derive from debt financing, but would be raised from the ZCCM-IH’s resources.

“It is not the Government of Zambia, which is raising this money; this resource will be raised through ZCCM-IH. This is a blessing in disguise, an opportunity has presented itself for ZCCM-IH to have a footprint in terms of the mining entity. The resources that are going to be mobilised will be mobilised at that platform, at a business trajectory and not a debt to Government of the Republic of Zambia. ZCCM-IH has connectivity to ensure that we get these resources to immediately pump in the operations and stabilise its production. This is a time where we, as government, are looking at a platform where we can sit and say, ‘how best can this operation be run with the support of Zambians?’ This is an opportunity where we can give some of our shares to the Zambian public or Zambian businesses or other entities in order to ensure that ZCCM-IH is not overburdened, but have a cake, which they are able to manage,” he explained.

Musukwa also said that ZCCM-IH had finalised the appointment of a transaction advisor to work out Mopani’s cost profile.

“So, in terms of how we will work out the cost profile, ZCCM-IH has appointed a transaction advisor, a professional transactional advisor, who will look at all these nitty gritties. The process of appointing a transactional advisor was just being concluded last week, so I am sure that in the spirit of openness and transparency, the government, through ZCCM-IH, will ensure it makes these details available. Apart from a transactional advisor, a team has been constituted, which bordering across technocrats in Ministries of Finance, National Planning, Ministry of Mines, Justice and other stakeholders, such as trade unions and all people from all walks of life would be incorporated. We are dealing with a process that the government would like to see an open, transparent process anchored on the rule of law,” Musukwa said.

“This process is anchored on mutual trust and understanding with the bedrock of negotiations and discussion. That is why government would like to ensure that Glencore comes out clean as we move through this process. I must say that tomorrow (Monday) the negotiation processes are going on. I must say from my team, they have actually told me that the last three, four negotiation processes that have been going on, Glencore has shown serious commitment, including ensuring that some of the costs you are talking about will not be costs that are paid in a day. This cost for this entire process cannot be paid in a day, these are costs, which will be escalated in the future as we operate the mine and so on. What we are going to do is that, actually one of the negotiating issues is to put on a temporal mechanism, where both Glencore and ZCCM-IH will begin to look at these cost profiles, even when we have the final process, so that these costs are looked at and ensure that the production and operations continue as priority.”

Meanwhile, Musukwa claimed that KCM’s operational performance had improved since Milingo’s appointment as the mining company’s provisional liquidator last May.

“And for avoidance of doubt, ever since the (provisional) liquidator took over, there are positive results that are being generated at KCM. Clearly, the company was mismanaged,” said Musukwa.

Source: https://diggers.news/business/2020/08/31/glencore-will-offload-90-mopani-shares-to-zccm-ih-musukwa/

Mopani To Resume Mining Operations As Soon As Government Approves Its Latest Proposal

By Michael Kaluba

Mopani copper mines plc has confirmed that it has submitted a proposal to government and would resume mining operations as soon as an agreement is reached.

Mopani copper mines public relations manager Nebert Mulenga who revealed this to phoenix news says the mining firm will issue a notice of its intention to place its mining operations on care and maintenance after 90 days.

He says

during the 90 day period, Mopani copper mines plc will continue to engage with the government on potential solutions to its current challenges.

This decision comes after the mine went against government’s directive not to place its Mufulira and Kitwe mines on care and maintenance which was followed by a 7-day ultimatum from the state couple with mine unions led protests in Kitwe.

Glencore to report Zambia Copper mines pending agreement with government

Anglo American is facing a huge class lawsuit for its past corporate practices over lead poisoning in Zambia’s Kabwe town.

Johannesburg-based attorneys Mbuyisa Moleele and London-based human rights law firm Leigh Day are preparing the case and an application to certify a class action will be filed in the Johannesburg High Court.

This is seen as a necessary first step in a class action against Anglo-American.

Indian mining giant Vedanta Resources which the Zambian government does not want anymore, is also connected to Anglo Americans.

The case of lead contamination involving Anglo stems from health issues linked to Kabwe, which Leigh Day said in a statement was once the world’s largest lead mine and operated from around 1915 until its closure in 1994. The law firm said Anglo owned and operated the mine from 1925 to 1974.

MiningTech Africa 2020

However, the diversified miner argues that the operation was nationalized and has been operated by the government for two decades.

Anglo American was one of the six companies involved in the R5bn silicosis class-action case in SA brought on behalf of former gold miners made ill by inhaling silica dust.

“The purpose of the action will be to secure compensation for victims of lead poisoning, including the cost of an effective medical monitoring system for blood lead levels among the community,” the two firms said in a statement on Friday.

They argue the mine was “owned and operated and/or managed” by Anglo American SA between 1925 and 1974 — the operation’s “most productive period”.

“It is alleged that from 1925 to 1974, Anglo American SA played a key role in the management of the medical, engineering and other technical services at the mine, and that it failed to take adequate steps to prevent lead poisoning of the local residents,” the lawyers said.

The mine was closed in 1994, after it was nationalised and taken from Anglo in 1974.

In its defence, Anglo said on Friday it was “one of a number of investors in the company that owned the Kabwe mine”.

“Anglo American was, however, at all times, far from being a majority owner. In the early 1970s, the company that owned the mine was nationalised by the government of Zambia and for more than 20 years thereafter the mine was operated by a state-owned body until its closure in 1994,” the London-based miner said.

“Since the nationalisation more than 40 years ago effectively placed these issues under the control of the Zambian government, we are not in a position to comment further about the matter, but we certainly don’t believe that Anglo American is in any way responsible for the current situation.”

The Human Rights Watch has published a report that puts Kabwe as the most toxic town, having disastrous effects on children’s health.

Country

 

CANCEL ALL LETTERS-MUZ

The Mineworkers Union of Zambia -MUZ- has demanded that Mopani Copper Mines plc cancels all letters given to miners when they placed the mine on care and maintenance as the mine owners seek dialogue with government.

MUZ President Joseph Chewe has told ZNBC News in Kitwe that Glencore, the owners of Mopani Copper Mines have engaged President Edgar Lungu seeking dialogue in view of the happenings at the mine.

Mr. Chewe has also demanded that Mopani Copper Mines apologizes to all miners who received letters.

He said the petition sent to President Edgar Lungu by mine unions when they held a peaceful protest demanding the restoration of all workers or have Mopani Copper Mines license revoked has been received.

Mr. Chewe stated that from the dialogue, mine unions want all workers to get back to work and that Mopani Copper Mines be given strict conditions that will stop them from engaging in activities that put workers’ jobs at risk.

Government give Mopani Copper Mines a 7 days ultimatum before Revoking their Mining Licence

The government has given Mopani Copper Mines a Seven Day ultimatum to show cause why its large-scale mining licences for Mufulira and Kitwe must NOT be revoked.

This follows Mopani Copper Mines alleged breach of provisions of the Mines and Minerals Act and the Employment Code Act.

This is according to a letter to Mopani Copper Mines, Chief Executive Officer, Nathan Bullock from Mining Licensing Committee Secretary Micheal Chibonga and made available to ZNBC News.

Mr Chibonga said the committee is in receipt of investigations report by the Director of Mines which has established that the mines have proceeded to place the NKANA and Mufulira Mines on Care and Maintenance.

He said this is without giving sufficient notice as required by law and in total defiance of the directive against such action, and the employees have already been given letters.

Mr Chibonga says it has also been established that all critical contracts for mining services and suppliers have been terminated with immediate effect.

He said the Mining Licensing Committee intends to revoke the large-scale mining licences for Nkana and Mufulira mine in accordnace with the Mines and Minerals Development Act of 2015.

Mr Chibonga said the Mine also breached section 37 of the Mines and Minerals Development Act of 2015 by defying the directive by the Director of Mines to resume mining operations

Mopani Copper Mines to review spending in the midst of the coronavirus threat

Mopani Copper Mines, a Zambia subsidiary of Glencore is set to do a comprehensive review which aims to minimise cash outflow to guard against uncertainty caused by the threat of coronavirus

“The rapid decline in the price of copper due to the impact of COVID-19 has now placed significant additional pressure on Mopani’s operations,” the company said in a statement.

Copper prices are set for their worst week since 2011 after sliding 10% so far.

The metal, often referred to as “Dr Copper” because it acts as a bellwether for the global economy, has been hit hard by the global slowdown caused by coronavirus.

Mopani said the review would give it the necessary financial flexibility to navigate the downturn.

The miner also said it had plans in place to reduce the risk of disruption to its operations from coronavirus. Several mines in Peru and one in Canada have shut due to the pandemic.

Mopani Copper Mines, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals and 10% by Zambia’s mining investment arm ZCCM-IH.

Source: Zambia Mining Magazine

Glencore’s Mopani Copper Mines reviews operations due to coronavirus

LUSAKA, March 20 (Reuters) – Glencore’s GLEN.L Mopani Copper Mines subsidiary in Zambia is reviewing its business in a bid to slash spending as lower copper prices and uncertainty caused by the coronavirus pandemic take their toll, it said on Friday.

The comprehensive review aims to minimise cash outflow and any non-essential projects would be suspended, the copper miner said.

“The rapid decline in the price of copper due to the impact of COVID-19 has now placed significant additional pressure on Mopani’s operations,” the company said in a statement.

Copper prices are set for their worst week since 2011 after sliding 10% so far.

The metal, often referred to as “Dr. Copper” because it acts as a bellwether for the global economy, has been hit hard by the global slowdown caused by coronavirus.

Mopani said the review would give it the necessary financial flexibility to navigate the downturn.

The miner also said it had plans in place to reduce the risk of disruption to its operations from coronavirus. Several mines in Peru and one in Canada have shut due to the pandemic.

Mopani Copper Mines, which produced 119,000 tonnes of copper in 2018, is 73.1% owned by Glencore, 16.9% by First Quantum Minerals FM.TO and 10% by Zambia’s mining investment arm ZCCM-IH.

Source: nasdaq

Mopani Rubbishes Transfer Of Procurement Office To South Africa

Mopani Copper Mines Plc has disputed media reports suggesting that the mining giant plans to move its procurement offices to South Africa.

Last week, local contractors and mine suppliers staged a protest demanding that Mopani rescinds its decision to move the procurement office to South Africa.

But Mopani Copper Mines Plc Public Relations Manager Nebert Mulenga has stated in a statement that the claims are false.

Mulenga said all business decisions and operations of Local Contractors will be managed by a local team at Mopani.

He has stated that Mopani has since introduced a Zambia Contract Ownership Development Initiative aimed at promoting participation of local contractors.

Mulenga added that Mopani believes the initiative will help grow the Zambian economy with the participation of local contractors in the sector.

Source: Zambia Reports 

MUZ Goes Ahead To Sign 7% Salary Increment For Workers, Despite It Being Rejected

The Mineworkers Union of Zambia (MUZ) and other unions have signed the 2020 collective agreement with Mopani Copper Mines at 7% despite the percentage being rejected by miners.

This follows a week of rejection, threats to pull out their membership by miners who expressed displeasure with the 7% salary increment and K500 cushion allowance.

MUZ President Joseph Chewe, Friday afternoon addressed mopani workers before proceeding to sign the collective agreement.

Speaking during the signing ceremony, Chewe said the unions were signing the collective agreement unhappy because workers had rejected the percentage.

He was however worried that the displeasure shown by workers could result in low production due to lack of motivation.

Chewe later appealed to Mopani Copper Mine Plc to relook into the new change of shifts which he said has hit miners who used to benefit from overtime pay.

Miners will now work 12 hour shifts of 4 days in a week from 8 hour shifts of 6 days in a week which came with overtime.

Source: Zambia Reports 

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
million).
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).