Statement from ZCCM IH CEO on the new strategic direction of the investment company

We have developed the ZCCM Investments Holdings Plc (ZCCM-IH) new Strategic Plan 2020-2026 to pursue a mining focused investment strategy that is premised on growth and innovation, with a clear intent to drive the company to investment optimisation and financial excellence. This new strategic plan (the”2020-2026 Strategic Plan” or the “Strategic Plan”) has been motivated by the need for ZCCM-IH to re-focus its investments in mining and the mining value chain.

We have refined the previous sixteen Strategic Goals into four Goals that underpin the company’s strategic impetus, which are to:

1. Extract, and where possible, to add value to our current portfolio;
2. Investment in greenfield and brownfield mining, and mining related ventures across a diverse range of minerals:
i. Commodity diversification to include cobalt, gold, manganese and other base metals, gemstones, limestone, phosphate and rare earth minerals;
ii. Value addition downstream and exploration upstream: and
iii. Energy – to support sustainability of mining operations.

3. Achieve operational and financial excellence; and

4. Generate greater shareholder value by ensuring price discovery on our stock exchange listings.

CEO ZCCM IH Mabvuto Chipata flanked by his team who will be critical in executing the new strategy

In pursuit of our ultimate goal to create a world class investment holding company in Zambia and beyond, I urge all ZCCM-IH staff to play their role in fully implementing this strategic plan.


Mr Mabvuto T. Chipata
Chief Executive Officer

Can ZCCM IH continue to pay a consistent Dividend under the new Strategy?

One of the ways that listed companies ensure that they have the continued support of key stakeholders such as investors in the company is by maintaining regular dividend payments. It is the desire of every investor to realize a return on investment over the investment horizon. This is why during its 78th meeting held on 29 March 2018, the ZCCM-IH Board amended the Company Dividend Policy.

The ZCCM-IH Policy now states that the Company may pay a minimum of 35% of the unconsolidated Net Profit after Tax (NPAT) for any financial year in which a positive unconsolidated NPAT was recorded”, read a statement in their new 2020 to 2026 strategic document.

Over the past two years of implementing its 2018-2023 strategic plan, ZCCM IH made some notable achievements which included consistent dividend pay-outs to shareholders. Since the 2015 financial year, the group has paid approximately K537 million to shareholders as dividends. Except for 2016, investors were paid a dividend every year as shown in the table below.

Source: ZCCM IH Strategic Plan

Astute investors who have read the new strategic plan will notice that ZCCM IH has also included a strategy towards capital gains. They intend to generate greater shareholder value by ensuring price discovery on our stock exchange listings.

According to Investopedia, “Price discovery is the overall process, whether explicit or inferred, of setting the spot price or the proper price of an asset, security, commodity, or currency. The process of price discovery looks at a number of tangible and intangible factors, including supply and demand, investor risk attitudes, and the overall economic and geopolitical environment.”

Market development being one of the key factors that influences price discovery, ZCCM IH will be turning to its listings on the London Stock Exchange and Euronext to achieve this. These are more mature stock exchanges compared to the developing Lusaka Stock Exchange. They will look intently at ZCCM IH’s projections to invest circa USD2.69 billion in the selected sectors in the Strategic Plan period. An investment hypothesis viewing the investment horizon through such as lens will note that it is highly probable for a consistent dividend to be maintained.


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ZCCM IH to focus on mining in new strategic plan

After two years of executing a 5-year strategic plan, ZCCM IH’s board has made the bold decision to change its strategic course towards a more impactful undertaking that will see the investment group focus on mining, according to the Board Chairperson in his message to shareholders.

Two years into our 2018-2023 Strategic Plan we have undertaken further strategic introspection which culminated into a strategic revision process. This led to the development of a new strategic plan as it became imperative that the change in strategic focus required a complete overhaul of the 2018-2023 strategic plan”, read an extract from Chairman Eric Silwamba from the new Strategic Plan which was recently released in January 2021. “This was necessitated by the changing business environment that calls for us to remain impactful, maximize shareholder value and drive growth largely in the mining industry in which we are deeply associated as an entity”.

According to CEO Mabvuto Chipata, “this new strategic plan (the”2020-2026 Strategic Plan” or the “Strategic Plan”) has been motivated by the need for ZCCM-IH to re-focus its investments in mining and the mining value chain”.

It is this strategic intent that led to the acquisition of a majority stake and retain ownership of Mopani Copper Mines in which the investment group had until recently been a minority shareholder. This is in line with the executive summary of the strategic report that states “focus for ZCCM-IH in this new strategic plan is directed to mining and mining-related investments, and emphasises the need for ZCCM-IH to drive the development and growth of the mining sector in Zambia”.

Much as it normally pays to have a small chunk of a larger cake than a large chunk of small one, ZCCM IH is also positioning itself to address the inequities that come with being a minority shareholder. The Achilles heel of being a minority shareholder resulted in the investment group having limited ability to influence operational and strategic direction for investees. What this means is that representation in these companies is not impactful as it does not constitute a sizable vote when it comes to decisions being made that influence return on investment. In short, Board representatives can make statements, but majority rule dictates the level of anxiety for pursing shareholder interests. Therefore, the remedy to this is majority or significant minority shareholding.


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Zambia: Global Copper Recovery to Lift Zambia’s Economy

Lusaka, Zambia — A RALLY in the price of copper globally is a major boost for Zambia in its efforts to revive the economy impacted by the coronavirus (COVID-19) and drought.

The sharp recovery in the price of the commodity has been on the back of United States policy expectations as the new administration of president-elect, Joe Biden, assumes office.

The administration has announced an aggressive fiscal stimulus package.

Copper prices are up to more than US$7,95 per tonne, having already gained 2,42 percent for the year.

Rand Merchant Bank (RMB) concurred with market sentiments that prices were expected to climb with potential scenarios similar to the global financial crisis where prices climbed to over $9 000/tonne.

“Such moves would greatly benefit environments like Zambia that need to beef up their reserve base as part of their economic recovery plan targets,” RMB experts, Daniel Kavishe and Neville Mandimika, stated.

Zambia is Africa’s second-largest producer of copper, after the Democratic Republic of Congo.

In 2020, it produced more than 646 000 tonnes of the metal in the first nine months of 2020, up from 590,321 tonnes in the same period last year

Copper mining is central to the economic prospects for the Southern African country and covers more than 80 percent of all exports.

On Tuesday, Glencore, the Anglo-Swiss firm, confirmed the sale of its 73 percent stake in Mopani Copper Mines to Zambia Consolidated Copper Mines (ZCCM).

Kavishe and Mandimika gave the transaction a thumbs-up.

“Our current analysis suggests that an increased stake in the mine would enable the Zambian government to benefit from higher dividend pay-outs in future,” the RMB experts stated.


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Good morning

Today’s event is a momentous occasion for ZCCM-IH and the country, as we pen down an agreement with our counterparts  to acquire 90%  of their shares in Mopani Copper Mines Plc.

In September last year, we announced to the market that  ZCCM-IH was in discussions with Glencore Finance (Bermuda) Ltd regarding the future of Mopani Copper Mines Plc

This move is in line with one of our new strategic pillars in our new strategic plan for 2020 to 2026, that aims at increasing our stakes in existing mining firms were we have minority stakes.

Hence, the acquisition of the 90% shares previously held by Carlisa Investments Corporation representing Glencore (73.1%) and First Quantum Minerals (16.9%) is a strategic move as we look to maximising shareholder value for the benefit of all stakeholders.

In line with the requirements of Section 9 of the Lusaka Securities Exchange Listing Requirements, we will give a detailed announcement in the course of this week, that sets out the salient features of the Acquisition.

Ladies and Gentlemen

As you may know, Mopani Copper Mines assets include operations that consist of four underground mines, a concentrator and a cobalt plant in Kitwe, and an underground mine, concentrator, smelter and refinery in the town of Mufulira, among others.

The remaining life of mine is 26 years for Nkana and 16 years for Mufulira, with 110 million tonnes in total, of proven ore reserves and copper grade of 1.89% as at 31st December 2019.

Suffice to say, Mopani has been operating for the past nine months without any capital injection from shareholders.

Our priority then is to turn around this asset  through  cost containment and Increased production output by bringing on line new production areas.

We will continue to give support to the hospital, the school and other social activities.

We will ensure continued operations of the mine, safeguarding of jobs and growth for the betterment of the country.

Ladies and Gentlemen

In line with our vision of being a world class investment holding company with a focus on mining, ZCCM-IH  will uphold the highest institutional standards in Environmental, Social and Governance principles and Transparency, driven by our extensive and deep industry knowledge and technical expertise in mining, financial and investment management.

As I conclude, I would like to express gratitude to Government through the Ministry of Mines, for the support rendered during the whole process, and to Glencore for its cooperation and patience.

And we also applaud Mopani management for keeping the mine afloat in the past months.

Thank you, and God bless you all.


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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


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BoZ starts gold accumulation in quest to bolster reserves

THE Bank of Zambia (BoZ) has commenced accumulation of gold as part of the official international reserves assets following the purchase of 47 kilogrammes of Dore gold from Zambia Gold Company Limited.

In a statement, Tuesday, the BoZ announced that following its formal commencement of gold purchases, it was now expecting Kansanshi Mining Company Plc, the First Quantum Minerals (FQM) subsidiary, to also start supplying the central bank with gold bullion during this quarter to bolster its reserves.

“…The Bank is also expecting Kansanshi Mine to supply gold bullion within the first quarter of 2021. The local purchase of gold follows the signing, on December 11, 2020, of the Gold Purchase Agreement with Zambia Gold Company Limited and Kansanshi Mine. Gold purchases is a strategic decision made by the Bank to broaden the composition and diversification of international reserves portfolio. The addition of gold as a reserve asset will augment the country’s international reserves. Reserves are an essential part of the Bank’s toolkit in providing protection against adverse economic shocks, and in achieving the monetary policy objectives of price and financial system stability,” stated BoZ.

“Purchasing gold locally using local currency provides a sustainable avenue of international reserves accumulation, provides a long-term store of value, and further enhances investor confidence. It also provides the necessary liquidity for the Bank’s foreign market operations. This is consistent with the broad objectives of government’s Economic Recovery Programme (ERP), which was launched on December 7, 2020.”

Zambia’s burgeoning gold market is gathering momentum, especially after the establishment of the state-of-the art US $250,000 Consolidated Gold Company laboratory in Lusaka last year, designed to ascertain the quantity and quality of gold mineral held by local traders.

ZCCM-IH, who have a projected national target of 40,000Kgs of gold, pegged its starting offer price for gold from the local market at a competitive price of K550 per gramme.

Kansanshi’s 2020 gold output is projected at nearly 3,700Kgs, the highest out of all of FQM’s other gold-producing mine sites globally, making Zambia an outstanding gold investment destination and potentially lucrative market.

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METALS-Copper steady; zinc rises on demand boost ahead of Phase 1 trade deal

London copper prices steadied on Monday after falling sharply in the previous session, while zinc hit a two-week high as the soon-to-be signed Phase 1 trade deal between the United States and China boosted prospects of higher demand.

A Chinese delegation is planning to travel to Washington on Jan. 13 for the signing of the U.S.-China Phase 1 trade deal, the South China Morning Post reported on Sunday.

Monetary policy easing by Beijing and a better-than-expected manufacturing performance from China in December were also creating a favourable backdrop for copper, Argonaut Securities said in a note.

* COPPER: Three-month copper on the London Metal Exchange was flat at $6,129 a tonne by 0740 GMT, after shedding 1% on Friday. The most-traded March copper contract on the Shanghai Futures Exchange closed down 0.6% on 48,760 yuan ($6,990.58) a tonne.

* ZINC: The metal used to galvanise steel rose as much as much as 1.4% to $2,339 a tonne, its highest since Dec. 23 on concerns about falling stocks MZN-STOCKS, which stand at just 51,125 tonnes in LME-registered warehouses. ShFE zinc closed up 1.5% on 18,110 yuan a tonne.

* ZINC SPREAD: The premium of cash LME zinc over the three-month contract CMZNo-3 stood at $14.75 a tonne on Friday, the highest since Dec. 2, indicating tight near-term supply.

* COPPER: Canadian miner First Quantum Minerals Ltd is weighing investment of around $1 billion to lift output at Africa’s biggest copper mine in Zambia despite a feud with state miner ZCCM-IH over project funding.

* OTHER METALS: The LME complex was mixed, with aluminium slipping 0.4% and lead losing 0.5%. Nickel edged up 0.2& while added 0.3%.

* ALUMINIUM: Aluminium stocks held at three major Japanese ports AL-STK-JPPRT at the end of November were up 0.9% at 321,200 tonnes from the previous month, Marubeni Corp said.

* Tensions in the Middle East after the killing of a top Iranian general by the United States pushed an index of Asian shares off an 18-month high as investors pushed safe-haven gold near a seven-year high, and oil jumped to four-month peaks.

 BASE METALS PRICES                     0740 GMT
 Three month LME copper                   6128.5
 Most active ShFE copper                   48760
 Three month LME aluminium                1816.5
 Most active ShFE aluminium                14105
 Three month LME zinc                       2327
 Most active ShFE zinc                     18110
 Three month LME lead                       1910
 Most active ShFE lead                     14755
 Three month LME nickel                    13790
 Most active ShFE nickel                  108190
 Three month LME tin                       16850
 Most active ShFE tin                     134570
 BASE METALS ARBITRAGE                          
 LME/SHFE COPPER             LMESHFCUc     519.8
 LME/SHFE ALUMINIUM          LMESHFALc   -396.08
 LME/SHFE ZINC               LMESHFZNc   -422.09
 LME/SHFE LEAD               LMESHFPBc   -710.97
 LME/SHFE NICKEL             LMESHFNIc  -2748.14

($1 = 6.9751 Chinese yuan renminbi)

Source: Hellenic Shipping news world wide