Connect with:
Sunday / April 27.
logo
mobile-logo
HomeStandard Blog Whole Post (Page 143)
Mining

The Association of Mine Suppliers and Contractors President Augustine Mubanga has called on government to issue a one-month ultimatum to the Eurasia Resources Group – ERG to re-open Chambishi Metals or declare them as a hostile investor who just wants to ruin the asset.

Mubanga told the Zambian Business Times – ZBT that the association is concerned with the continued placement of the Mine assets under care and maintenance, as more value is being lost. He told ZBT that Chambishi metals initially indicated that it would go under care and maintenance for only three (3) months, but has been under the same condition for over a year now.

He said the association strongly feels all the conditions are currently at their best for the mine to re-open and operate profitably, adding that the investor is not just interested in re-opening the operations.

He has urged government to act quickly and stop nursing fake investors. Mubanga further stated that the investors should freely hand over the mine license and assets to government [ZCCM-IH] at a zero cost if they have failed.

The re-opening of Chambishi Metals remains unclear despite the upsurge in international copper prices. The Mine owners ERG are reported to be facing challenges in raising finances needed. But concerns for the economy of Chambishi and Kalulushi towns are negatively affected with employment levels reduced due to the jobs that were cut.

Chambishi Metals, which is 90% owned by Eurasia Resources Group – ERG and 10% by ZCCM-IH is involved in the mining, refining and tolling of cobalt and copper. The Mine is failing to re-open after it has been put under care and maintenance for over a year now.

And Ministry of Mines Permanent Secretary – PS Barnaby Mulenga told ZBT that government has engaged Chambishi metals in order to come up with a solution for the mine to re-open, confirming that the company indeed needs recaptalisation.

He said government is having talks with the company and should be able to make progress on the matter, without giving away much details on the stage and direction of the discussions held so far. The mines PS added that the public will be made aware of the way forward once the process of discussion is concluded.

2 Comments
0 likes

The Association of Mine Suppliers and Contractors

Companies

The Copperbelt Energy Corporation – CEC woes have deepened following the exit of Glencore and the 100% acquisition of Mopani Copper Mines – MCM by state owned investment company – ZCCM IH. Mopani happens to be one of the top customers of CEC.

CEC top three mining customers included Konkola Copper Mines – KCM, Mopani Copper Mines and Chambishi Metals. The company also relied on purchasing power from state owned power giant, ZESCO, which they would then resell to the mines and other customers.

However, the cracks in the relationship between CEC and ZESCO emerged when power utility ZESCO announced an increase in tariff across the board including for mining houses. When CEC attempted to pass on the increase tariffs to Mopani, the mining house threatened to close its mines in both Kitwe and Mufulira, a decision that has now culminated into the exit of glecncore.

It was after this action (threats of shutting down Nkana and Mufulira Mines) that counter accusations emerged that CEC was buying power cheaply from ZESCO and making a fortune reselling it to the mines. ZESCO which had the hindsight of supplying power directly to First Quantum Minerals – FQM mines based in Solwezi and Kalumbila without a middle-company then opted to directly negotiate power supply to KCM.

This was after the government takeover of KCM from Indian miner Vedanta Resources, a matter which is still being contested. KCM then entered into an electricity supply agreement directly with ZESCO, cutting out CEC which was the middleman in the erstwhile transaction.

CEC stated in its 2019 annual report that KCM alone accounted for about 40% of its total revenues and had an outstanding debt of about US$144 million. When CEC threatened to cut off power supply to KCM, Energy Minister Matthew Nkhuwa proceeded to issue a statutory instrument declaring the power transmission infrastructure as common carriers which enabled Zesco to resume direct power supply to KCM.

Glencore’s Mopani Copper Mines which is the other key customer for CEC has now been taken over by ZCCM IH, a state owned investment company under the Industrial Development Corporation – IDC.

This takeover is seen to have further weakened CEC negotiating and revenue position which insiders say was much stronger under the Glencore ownership of Mopani assets. CEC will now have to kowtow to ZESCO and ZCCM IH to establish a path to revenue retention and sustaining its balance sheet.

On 25 January 2021, CEC re-issued a profit warning through its company secretary Julia Chaila made available to the Zambian Business Times – ZBT stating that their Power Supply Agreement with KCM has come to an end.

Chaila stated that “the CEC Board would like to inform the market that the Power Supply Agreement with Konkola Copper Mines Plc (“KCM”) had come to an end, thereby removing any contractual obligations for CEC to continue supplying electricity to KCM.

Furthermore, she stated that she stated that the shareholders were advised that KCM had accumulated debt of US$145 million in unpaid power charges and had signed a term sheet with ZESCO for power supply.

CEC in its note stated that in addition, the Government of the Republic of Zambia issued Statutory Instrument No.57 of 2020 on 29 May 2020 declaring CEC transmission and distribution lines as “Common Carrier”, enabling ZESCO to transport or wheel power through the CEC infrastructure to supply KCM.

Chaila confirmed that “the outstanding events/circumstances surrounding the settlement of KCM’s debt and the review of the contractual arrangements in respect of continued service provision to KCM may have a material effect on the price of the Company’s securities”.

Now that government has taken over Mopani Copper Mines, it is projected that Zesco will in a similar manner have a much stronger negotiating position and proceed to have a direct power supply agreement with the Mopani and cut out CEC as the middleman to increase its margins. The loser in this transaction will ultimately be CEC.

More to follow as CEC unveils its strategies in place to maneuver the complex and yet lucrative energy sector. This article was first published in the print edition of the Zambia Business Times and reproduced here.

0 Comments
0 likes

The Copperbelt Energy Corporation - CEC woes

Companies

The National Road Fund Agency (NRFA) has disclosed that it has failed to meet its targeted toll collection revenue for the year 2020 by about 5% due to the continued impact of the Covid-19 pandemic on the general business environment.

NRFA Public Relations Manager Alphonsius Hamachila said the agency collected K1.551 billion compared to the K1.641 billion budgeted collection as the negative impacts of the corona virus at country and regional levels reduced processed traffic volumes.

Hamachila however noted that there was a 28% increase in toll revenue collection in the year 2020 compared to 2019 when K1.212 billion was collected and this is mainly because of the commissioning of new toll stations.

He said last year the agency completed and commissioned five inland toll stations which include Mibenge in Samfya, George Kunda in Mkushi, Alexander Grey Zulu in Nyimba, Reuben Chitandika Kamanga in Katete and Kebby Musokotwane in Livingstone.

He also said the commissioning of these toll stations created about 105 direct jobs with toll collectors recruited from the respective provinces.

He mentioned that tolling operations stopped at Kapiri Mposhi and Livingstone weighbridge when the George Kunda and Kebby Musokotwane respectively were officially commissioned adding that the Kazungula weighbridge which was also a toll collection point was closed for periodic maintenance which meant that there were no tolling operations from weighbridges as at the end of the year.

He noted that the total number of operational collection points as at the close of 2020 was 36, comprising of 26 inland toll stations and 10 port of entry stations.

According to information made available to Zambian Business Times-ZBT, Hamachila said the implementation of the Statutory Instrument (SI) 74 of 2020, which provides for collection of tolls at inland toll stations from foreign registered vehicles contributed to the increase of toll revenue.

He added that the immediate revenue impact of SI 74 has been an increase in toll revenue of about K20 million per month. He stated that a total of 15,826,406 vehicle passages at inland toll stations were processed last year compared to 14, 125, 277 passages in 2019.

Hamachila noted that the electronic toll card payment system has continued to register growth over the years adding that during the period January-December 2020, K167 million in tolls revenue was collected using this cashless system representing 25% of the total inland collections for the period. He added that this was an increase from 2019 when the agency collected K116 million through the platform.

He further said that when collected, road tolls are put together with other revenues from fuel levy and other road user charges and disbursed for all road projects and related activities across the country. Hamachila said this during a tour of Reuben Chitandika Kamanga toll gate.

2 Comments
0 likes

The National Road Fund Agency (NRFA) has

Lifestyle

It is not a secret that Zambia is now officially in a recession. A recession is simply defined as two consecutive quarters of negative economic growth.

Though we may not have official confirmation, it’s no rocket science to note that Zambia has recorded two or more consecutive quarters of negative growth or economic contraction.

This recession is not unique to Zambia. Most countries are struggling and the situation has been exacerbated by the Covid pandemic. Frankly speaking, for Zambia, the steep depreciation of the Kwacha by over 60% over a one year period is what has really made the situation worse as the country imports most of its consumer and industrial goods.

Of course, Zambia’s economic challenges started even before the the onset of the Covid pandemic mostly through the failure to manage the macro economic variables. For us at ZBT, the failure to manage the exchange rate is one area that needs urgent attention.

If the exchange rate was actively managed, the pain of the Covid pandemic would have been lessened and ameliorated. Forget about the free market economy text books, serious economic management involves some level of planning and management of the local currency.

What are the signs you can look out for, to confirm that there is a recession? There are some tell tell signs all around such as businesses barely surviving and not making any profits, high inflation rate and escalating food prices, companies shedding jobs and people losing their jobs, people finding it hard and difficult to find jobs and make ends meet.

Despite all this gloom around, there are indeed some individuals and companies that will surprisingly make more money during a recession, but the majority will struggle. So, how can you be among those that will thrive? How can you avoid being a part of the group that will feel the brunt of a recession?.

In this recession, you will see some families children having to change schools to cut down on fees. Some of these challenges have even been made worse by the Covid pandemic, we have also seen an increase in domestic violence, in gender based violence and general despair among some of our citizens.

So, now that Zambia is experiencing an economic recession, what can you do at both individual and household level to not only survive the current period, but use it to thrive immediately when the economy returns to its growth trajectory?

1. Live within you means – if you are used to free spending, a recession calls for being frugal, making budgets and only spending according to plan. Live it’s projected, no one can tell when Covid will end, nor when the economy will bounce back.

2. Identify ways to cut back on spending – look at your monthly expenses, do you need the full bouquet for DSTV, can you review your entertainment spend and see what can be rationalized?

3. Grow your savings – this looks counter intuitive, but whatever you can save for a particular month will go a long way to lengthen your period which you can live without a job or income. Make sure you save at every opportunity.

4. Pay down your debts – were you have high interest debt, those debts called Kaloba should be paid down at every opportunity. Failure to pay them down can lead to financial ruin.

5. Improve your education and skills – sometimes, we think of education and skills as enrolling at a university or college, but skills improvement can be focused on gaining skills that will give you efficiency. The skills you get will help you thrive immediately when the recession ends.

6. Supplement your income – you may have abilities that can help you open up another income stream, relying on one income stream can be dangerous as companies are closing suddenly. Imagine people in the hotels that relied on international travel? If you can start a new business or partnership, this may just be the right time.

Since you are now living in the times a recession, don’t despair, the sun will rise. When an economy goes down, when the vaccines that have been rolled out can not cure the different corona virus variants that are emerging, look to longer time horizons.

The fact that this is not the first nor will it be the last recession or pandemic that the country will experience, should tell you that life battles are won over the long term. Think long term. Always remember that times of recession are a test in resilience. BE RESILIENT.

0 Comments
0 likes

It is not a secret that Zambia

Tech

MTN Zambia, a local unit for MTN group of South Africa in December 2020 announced that a private share placement had been successfully done with the National Pension Scheme Authority – NAPSA, falling short of directly offering 10% shares to the Zambian public.

NAPSA acquired 8% stake in MTN Zambia in December 2020 in what looks like a compromise deal. However, the license issued to MTN requires that the telco lists 10% with LuSE to members of the public through an initial public offer – IPO.

Zambia’s ICT regulator – ZICTA in 2018 confirmed with the Zambian Business Times – ZBT that they had engaged MTN, the Securities and Exchange Commission – SEC and Lusaka Securities Exchange – LuSE to ensure that MTN meets its license requirement to list 10% through an IPO. ZICTA, SEC are yet to confirm if they have acceded to bending the license condition and instead accept a private placement.

The move by MTN to shed 8% to NAPSA was lauded as a good first step in the right direction, though the 8% minority share to which Napsa agreed to is too little to account for any notable influence of a local entity into MTN Zambia operations. There is need for at least 20% shares for NAPSA as a pension fund to be seen and to actually have significant influence on the telco.

Analysts have argued that there is need for MTN to fulfill the license condition and list on the Lusaka Securities Exchange – LuSE to offer their shares to the public and come under the corporate governance scope that its key competitor such as Airtel Zambia undergoes, to level the telco playing field.

Listing on LuSE ensures that some mandatory information is reported which improves transparency and ensures good corporate governance practices are adhered to. This requirement has been there, and a private placement with a Zambian Pension fund should be used as a cover for the regulatory requirement for the company to the publicly offer its shares to the Zambian public.

And during the unvailing ceremony held in December 2020, NAPSA Director General, Yollard Kachinda stated that “Zambia has in the recent years seen some significant growth in mobile telecommunications and digital technology. Mobile data has transformed the way people conduct their day to day activities such as buying and selling of products and services.,” said Kachinda.

At the same function, MTN Zambia Chief Executive Officer Bart Hofker said “MTN Zambia’s partnership with the NAPSA was a demonstration of the shared vision with the Zambian government to make the telecommunications company a truly Zambian owned company and to continue to contribute to the Zambian economy.”

He added that “as part of our undertaking to the Zambian Information, Communications and Technology Authority (ZICTA), 8% of our shares are now held by NAPSA and this was done through a private placement process.

The private placement process had Stanbic Bank Zambia as transaction advisors, Corpus Legal Practitioners and Eric Silwamba, Jalasi and Linyama Legal Practitioners were the legal advisors.

ZICTA is yet to confirm if the private placement is a deal that has been entered into, to forgo the 10% IPO requirement needed to fulfill the license condition. LuSE needs to attract more companies for it to achieve the intended purpose Of becoming an alternative source of financing for Zambian companies.

0 Comments
0 likes

MTN Zambia, a local unit for MTN

Tech

The Zambia Information and Communications Technology Authority (ZICTA) has awarded a 4Th mobile licence to Beeline Telecoms Limited.

ZICTA Director General Patrick Mutimushi said Beeline, a wholly Zambian owned company is required to commence operations within six months failure to which, the international network and national service licence will be revoked.

According to information made available to Zambian Business Times-ZBT, Mutimushi said this was in line with its regulatory mandate under the ICT ACT No. 15 of 2009, which includes the promotion of competition in the ICT sector.

He also said the decision by the authority to introduce a fourth mobile operator was arrived at after conducting an analysis of the ICT sector market from the perspective of the quality of services being offered by the incumbent licensees as well as the need, or otherwise, to raise the levels of competition among others.

He added that the authority invited requests for proposals and applications for a network licence under the international market segment and a service licence under the national market segment with associated resources.

Mutimushi said after a thorough evaluation process, the authority awarded Beeline Telecoms Limited the licence after it met the minimum criteria.

He said on September 4th, 2018, ZICTA, under the guidance of the Ministry of Transport and Communications issued a network licence under the international market segment and a service licence under the national market segment with associated resources to UZI Zambia.

He added that unfortunately, UZI Zambia failed to commence operations by March 3, 2019 which was the final deadline issued by the authority adding that this was notwithstanding  two earlier deadline extensions, the first being November 30, 2019 and the second May 30, 2020.

Mutimushi said since UZI Zambia’s licence was cancelled and the challenges affecting the sector have continued, ZICTA re-embarked on seeking to licence a fourth mobile operator which led to the issuance of a licence to Beeline Telecom Limited.

0 Comments
0 likes

The Zambia Information and Communications Technology Authority

Tech

Energy giant – ZESCO has revealed that it has about 50,000 (50k) backlog of applications for new connections Which the company anticipates to clear within the stipulated timelines, depending on whether it’s a standard or non-standard classification.

Speaking in an exclusive interview with the Zambian Business Time – ZBT, ZESCO public relations manager Hazel Zulu said the backlog is a reality caused by non-reflective Capital contribution while others are within the stipulated construction timelines.

Zulu stated that “the backlog is a reality caused by non-reflective Capital contribution, to every cost the customers and ZESCO share in the ratio of 3 to 7, for instance, if a customer is charged K3,000, ZESCO must look for K7,000 to supplement the true cost for the connection”.

When asked how long ZESCO takes to connect power after a client has completed the application process, Zulu told ZBT that it depends on what type of application, there are two different timelines for the two types of applications which are standard and non-standard.

The standard application includes dropping of service cables and prepaid meter while the non-standard job requires construction works which may include mounting new poles, transformers among other works that may be needed.

She told ZBT that “for both types of connections, the quotation validity period is 90 days [3 months] and customers connection is expected to be done within six (6) months from the date of making payment”. She added that these periods or timelines are also contingent upon availability of materials.

And on the issue of complaints relating to the call center numbers being inaccessible and sometimes calls going unanswered, ZESCO has advised its esteemed customers to use the various platforms that include USSD, the mobile app to interact with the company.

ZESCO urges its customers to its USSD platform by dialing *3600# or download and use the ZESCO mobile App and/or use the new integrated website to log their complaints, digitally track their application and do much more. So, where the call center is congested, there are other options that will ensure the customer is serviced 24/7.

The demand for both domestic and commercial power supply in Zambia continues to expand. Power infrastructure and connectivity remains key to influencing human settlement and growth of economic activities. It is therefore Imperative that Investments into grid extension and energy generation diversification continues to be prioritize to grow the Zambian economy and improve the standard of living for its citizens

0 Comments
0 likes

Energy giant - ZESCO has revealed that

Companies

The Consumer Unity Trust Society – CUTS has contented that the ban on the importation of edible oils has contributed to the rising prices of cooking oil on the market. Cooking oil prices have recently skyrocketed leaving consumers with limited options.

CUTS Programme Manager Ishmael Zulu said the high prices of cooking oil currently obtaining on the market is a concern as it has a direct impact on the cost of living for the average Zambian citizen. Statistics show that Kwacha based salaries and incomes have not risen to match the sharp rise in prices of commodities.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Zulu said government should meet and engage the local manufacturers of edible oils in order to agreed what can be done to help them reduce their cost of production.

Zulu said the cost of doing business in Zambia has increased over the last two to three years and this has in turn made the cost of products that are produced locally more expensive, as some have some imported inputs and operational costs that are dictated by the exchange rate.

“Locally, we have seen a sharp increase in the prices of edible oils on the market, this is something that consumers have bemoaned and it’s a concern because oil is an essential commodity which is used in almost all of our day to day lives”, he said.

He however said that external competition can be used to nudge the local manufacturing sector to innovate, adding that competition is good because it ultimately benefits the consumers.

“When you have a healthy competitive business environment, you have businesses creating higher quality goods and this would allow consumers to have a wider variety. If they feel a certain good or brand is not up to their standard or is too expensive, they can select another good and what it translates into is a higher quality of goods and services that are offered on the market”, he said.

Zulu said the principles of trade emphasize the importance of having a free flow of goods and services in the economy.

“For example when you put an export ban on products such as maize, it limits the capability of farmers to plan ahead of the farming season, so similarly when you are putting in place bans on goods such as edible oils it does limit the flow of goods from one country to another and it has devastating impacts in the long term”, he said.

He also noted that the ban can be connected to the price fluctuations of soya beans because farmers are not sure whether they would make a profit or loss on the production of soya beans, so there is a correlation that can be established throughout the value chain of the production of cooking oil.

“Soya beans is one of the crops that has been identified as a key diversification crop away from maize, so some of these bans do have an impact on the production of soya beans and it can explain why there is a lot of fluctuation in the prices of soya beans year in year out”, he said.

The ministry of Agriculture has been challenged to be availing the public a detailed study with empirical evidence that a ban on imports would not result into sharp increases in prices.

Technocrats in government who are responsible for policy decisions have further been challenged to not only issue bans but announce follow up steps that will ensure that consumers are protected from sharp consumer goods price increases. There is also an option of using a combination of import or export quotas which can be used to keep prices stable.

0 Comments
0 likes

The Consumer Unity Trust Society - CUTS

Markets

The Bank of Zambia – BOZ has re-emphasized that bitcoin and any other cryptocurrency is not a legal tender on the Zambian market as the bank is still conducting research on the matter. Therefore, Any crypto currency activities regarding usage, Trade and buying is being done at Owners risk.

BOZ Director-Banking, Currency and Payment Systems Lazarous Kamanga said before engaging in such activities, individuals or entities should understand the risks that are involved in dealing with cryptocurrencies in order to avoid being defrauded out of their hard-earned money.

“As a Central bank, sometime in 2017 we did issue a cautionary statement to say that “as it stands the bitcoin and cryptocurrency on the Zambian market is not a legal tender” and people should be careful when dealing with some of these crypto currencies”, he said.

The Bank of Zambia has observed a trend in line with what is being seen in other countries, increasing public interest in cryptocurrencies as evidenced by the growing number of enquiries that the bank has been receiving on the subject.

While cryptocurrencies have some monetary characteristics, such as being used as a means of payment on a person-to-person basis, he clarified that cryptocurrencies are not legal tender in Zambia.

The central bank does not oversee, supervise nor regulate the cryptocurrency landscape and any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.

And regarding Zambia getting on an International Monetary Fund – IMF Program, The Bank of Zambia (BOZ) says it is premature to make any pronouncements concerning the virtual discussions that the bank is having with the International Monetary Fund (IMF) as the talks just commenced.

BOZ Governor Christopher Mvunga said the talks which started last week are currently ongoing and will go on up to March this year therefore it would be premature to make any conclusions. Mvunga said this during a monetary policy committee briefing attended by the Zambian Business Times – ZBT.

0 Comments
0 likes

The Bank of Zambia - BOZ has

Lifestyle

The Anti-Corruption Commission (ACC) has challenged Charles Loyana, a Zambian National who has put in a claim of ownership by power of attorney for the infamous 48 houses to prove that he and his associates are indeed the true owners.

The 48 houses ownership saga had been projected as an epitome of government officials and politicians corruption after a revelation that there was no one who came up to claim the assets even much publicity and the public outcry.

The narrative of corruption based on the 48 houses saga seems to have backfired when the Anti Corruption Commission – ACC ended up seizing the assets, an action which has now brought out the true owners who are seeking to retain ownership.

According to court documents filed and seen by the Zambian Business Times – ZBT, a Zambian national, Charles Loyana, an Accountant employed at the Ministry of Finance has together with Uziel Bashire and Zuberi Bigawa sued the ACC for the forfeiture of the 48 houses.

Bashire, a Tanzanian national who claims to be involved in international business and currently residing in Norway and Bigawa, a Tanzanian national currently residing in Tanzania, who is a cousin to Bashire and is involved in provision of general construction services have sued the ACC claiming to be the true owners.

ACC in defending their seizure of the assets stated that there is no record of either Uziel Bashire or Zuberi Bigawa being granted an investment permit to enable them to invest in Zambia and build the 48 houses.

ACC said the power of attorney between Bashire and Bigawa as well as that between Bigawa and Loyana does not state that Bashire would have interest and would in future be the beneficial owner while upon purchase Loyana would own and possess the properties.

On the other hand, both powers of attorney indicate that Bashire shall be the beneficial owner of all the real estate to be bought by Loyana therefore; the plaintiffs shall be put to strict proof.

The ACC has denied that in 2011, Bashire decided to invest in real estate in Zambia and acknowledging that he was a foreigner and did not qualify to own property in his name in Zambia, he decided to collaborate with a Zambian while he provided funding stating that the claims are within the personal knowledge of the plaintiffs.

The ACC stated that in a statement dated 16 May 2018, addressed to ACC, Loyana stated that he only owned two properties, that is one in Chilenje and one in Chalala and denied buying any property from Lombe Bwalya and associates and also denying ever doing any business with them therefore Loyana shall be put to strict proof.

ACC also said that in a letter dated 11 July 2018, Suzan Sinkala, Loyana’s wife said she had only made one or two applications on behalf of other people and not the 24 applications alleged by the plaintiffs. And ACC has stated that it complied with the procedure of forfeiture of recovered property as stated in the ACC regulations of 2004.

It has not yet been established why Charles Loyana and his associates kept quiet or neglected to put in a claim when the matter involving the 48 houses was making rounds in both the mainstream and social media resulting in serious reputational damage for some senior government officials who had been accused of owning the said house through suspected proceeds of corruption.

0 Comments
0 likes

The Anti-Corruption Commission (ACC) has challenged Charles