Connect with:
Thursday / June 12.
logo
mobile-logo
HomeStandard Blog Whole Post (Page 149)
Mining

First Quantum Minerals (FQM) Kansanshi Mine produced 128,000 ounces (about 3,630 kilograms) of gold in 2020 valued at about US$218 million at current market prices.

According to the the FQMs Preliminary Production data and 2021-2023 projections shared with the Zambian Business Times – ZBT, the solwezi based Mine however recorded an overall reduction in its gold production.

Kansanshi mine gold production dropped by 17,000 ounces (about 12%) from the high of 145,000 ounces in 2019 to 128,000 ounces in 2020. Kansanshi mine also posted a drop in copper production in 2020, which has been blamed on low grade and low oxide recoveries.

The Bank of Zambia had announced that it had signed a deal with FQM to buy gold from the Mine to boost its copper reserves. However, the central bank is yet to disclose its projected gold buying quantities from Kansanshi mine.

With the already announced plans that BOZ plans to buy about 600kgs from the Zambia Gold Company in 2021, the central bank could further boost its gold reserves more aggressively if it buys more gold from the already established gold producers in Zambia such as Kansanshi.

Zambia is now officially a gold producer with total annual production from just two gold mines (Kansanshi and Kasenseli) valued at over US$250 million. As more gold mines start to officially declare their numbers, the diversification within the mining industry is now more realistic goal with Copper and Gold leading the volumes and values.

0 Comments
0 likes

First Quantum Minerals (FQM) Kansanshi Mine produced

Tech

The Water Resources Management Authority (WARMA) has advised the public and its stakeholders to be alert as there is a high likelihood of a 20-year return flood in Kasempa district along the Lubungu and Lunga Rivers from the 27th to 31st January 2021, which will cause flooding in areas along the river banks.

WARMA Public Relations Officer Joshua Kapila said according to the authority’s forecast; there is a high probability of a 10-year return flood around Mumbwa at the Hook Bridge, and in areas downstream of the ItezhiTezhi Dam (Namwala) and Kasaka hydrometric station on the Kafue River, which is projected to occur around the 7th to 9th February 2021.

In a statement made available to Zambian Business Times-ZBT, Kapila said based on the analysis of the authority’s hydrological data, increased river flows due to increased rainfall in the abovementioned areas has been observed, with flooding expected to be severe in the same areas and regions around Kasempa and Kelongwa, respectively.

The authority has advised the public in the affected areas and concerned stakeholders to take all the necessary precautionary measures and urgently prepare for the projected flood events to avoid loss of life and property.

Kapila also said that being the sole authority in the management of water resources in the nation as mandated by the Water Resources Management (WRM) Act No. 21 of 2011, WARMA will continue to provide forecasted flood-event updates across the country and will report any observed changes that has potential to cause disaster.

0 Comments
0 likes

The Water Resources Management Authority (WARMA) has

Mining

Zambia’s largest copper miner – First Quantum Minerals (FQM) has posted a paltry 4% growth in copper production from its Zambian based Mines for the year ended December 2020.

According to a press release made available to the Zambian Business Times – ZBT, FQM posted total copper production from its Zambian Mines of 472,000 tons for 2020, up from 452,000 tons produced in 2019.

Overall copper production from its two Zambian Mines at Kalumbila and Kanshanshi, both in North Western Province, recorded a paltry increase of about 20,000 tons, which translates to a growth in copper production of 4% from 2019 to 2020.

However, the Toronto listed FQM group which indicated its desire to geographically diversify from its over reliance on Zambian based Mines which in 2019 accounted for over 70% of its copper production seems to be on track on this strategy.

FQM ramped up copper production at its new Mine at Cobre Panama Mine from 147,000 tons in 2019 to 206,000 tons in 2020, an aggressive increase in production of about 40% year on year.

A further review of the individual Mines shows that the Kalumbila based Sentinel Mine achieved a record copper production of 251, 000 tons for the full year 2020, 31,000 tons or 14% more than 2019, reflecting a significant increase in throughput and favourable grades.

However, Solwezi based Kansanshi Mine copper production full year 2020 dropped to 221,0000 tons, from 232,000 tons in 2019, with quarter four [Q4] 2020 being 53,000 tons, a decline of about 11,000 tons or 5% from 2019 production.

These numbers confirm the emergence of North Western Province as Zambia’s Copper Powerhouse with key Copperbelt based Mines namely Mopani Copper Mines and Konkola Copper Mines having experienced challenges in production as well as management.

Both Mopani and KCM are now under ZCCM IH, a state owned investment company with KCM still caught in legal battle with its former owner, India’s Vedanta. Mopani has just concluded the deal with 100% shares acquired by ZCCM IH. There is now need to timely return the two Mines to full production to take advantage of the favorable international copper prices currently obtaining.

Copper production and export remains Zambia’s largest economic activity. The copper mines had been able to continue with their full capacity production in 2020 after being strategically exempted from the load shedding that mostly affected domestic and some commercial sectors.

Zambia experienced steep power shortages in 2020 with domestic and commercial segments being the mostly hit. 2021 however looks set to return to normal in terms of power production and supply as the rains which feed the mostly hydro power generation capacity has so far been normal to above normal, with floods recorded in most of the provinces across the country.

0 Comments
0 likes

Zambia’s largest copper miner - First Quantum

Lifestyle

Livingstone Tourism Association – LTA Chairperson Rodney Sikumba says the second wave of the corona virus has slowed down tourist visits in Livingstone, with the industry survival now betting on government incentives.

Sikumba said the travel advisory information from the United Kingdom (UK) has suggested that Zambia is not a safe country to travel to now and that has given people an indication that the number of cases are high.

Speaking in an exclusive interview with Zambian Business Times-ZBT, Sikumba said he is not sure how the industry will survive the second wave of Covid-19 but can only focus on making sure that businesses continue to run instead of making money as the industry awaits incentives from government.

“You plan this today, tomorrow your plans are out of the window, so we really don’t know what’s going to happen this year, all we are trying to do is keep the businesses running”, he said.

Sikumba said the association has come up with incentives to make the businesses more attractive for the locals to visit the tourist destinations such as removing Value Added Tax (VAT) on packaged tours, which include accommodation and activities in order to mitigate the effects of Covid-19 within businesses.

“A few things have been put in place such as the removal of renewal fees for 2021 and suspension of manager’s licenses for 2021, but we are looking at what more we can be given, and we are not talking about necessarily giving us incentives that go towards reducing the cost of doing business, but incentives that will make it more attractive for the locals to visit Livingstone”, he said.

He however said that these incentives would not mean anything if visitors are not travelling as that is the only way businesses would be able to bring in money and continue operating.

Sikumba also said that the association has written to the Ministry of Labour to allow them to put their staff on forced leave hoping that this will be dealt with quickly as it is expensive to keep staff who are not productive.

“In as much as we keep our staff, at-least government can look into giving us relief with regards to keeping staff on payroll for the duration”, he said.

He also mentioned that Zimbabwe has gone into a 30-day hard lockdown and this has made it difficult for anyone to travel adding that Botswana has also instituted a lockdown and South Africa is most likely to institute level 4 lockdown.

“Those are some of the gateways that we have into Zambia and Livingstone in particular. With those places shut, we don’t see ourselves receiving any tangible number of visitors, be it international or from the region”, he said.

He has implored members of the association to plan for the worst and make sure that if a vaccine reaches Africa, they should be able to access it and manage the visitors coming in. So, we look forward to how the vaccine will pan out, but in the absence of a vaccine being successfully administered, it remains a big challenge to focus on future business.

0 Comments
0 likes

Livingstone Tourism Association - LTA Chairperson Rodney

Companies

Some Cement distributors have confirmed that Lafarge has hiked its Cement prices and that they have received communication to that effect. Cement price is a key determinant in the cost of construction.

And speaking in an exclusive interview with Zambian Business Times – ZBT, Lafarge Corporate Affairs and Communications Manager Sarah Banda-Ortiz on 21 January 2021 disclosed that” the company is currently evaluating the business impact of several economic variables that have changed in the operating environment since its last price adjustment in July 2020.

Notable among these, is the continued devaluation of the local currency, recent changes in legislation which has a direct impact on the company’s operational costs and the depletion of gypsum reserves locally. We therefore believe that these factors many necessitate a change in our pricing.”

Banda-Ortiz explained that the implementation of SI 106 of 2020 that puts into law the increase of salaries and allowances for truck drivers coupled with SI 125 which effectively revises both diesel and petrol costs to corporates will also impact their transportation costs, for inbound and outbound shipping as well as energy production costs. She added that, the aforementioned will have a significant negative impact on their total costs of production.

Furthermore, she said that sourcing locally of all available inputs and services is their number one priority as Lafarge Zambia. However, the depletion of reserves at their local source, Chambeshi Metals, leaves them with no option but to find alternative sources in the manufacture of quality cement.

She said that Lafarge operates with local transporters and contractors, and has more than 4,000 shareholders, employs more than 900 people both directly and indirectly and has a direct impact on over 8,000 families that benefits from activities related to the business.

Banda-Ortiz said that ”as the country’s leader in building materials and solutions, we remain committed to providing quality building materials to all Zambians.” Lafarge Zambia is the leading supplier of building materials in Zambia.

The company operates a network of facilities, which includes two integrated cement plants (with a combined capacity of 1,500,000 tonnes per anum) in chilanga and Ndola, and distributes by road and rail to all corners of the country and Southern DRC.

Concerns are that Larfarge Zambia being a market leader will trigger similar Cement price hikes across Zambia. The last adjustment resulted in the Zambian competition and consumer protection commission – CCPC investigating the top four industry players on suspected collusion. CCPC is yet to release its findings.

0 Comments
0 likes

Some Cement distributors have confirmed that Lafarge

Tech

National Institute of Public Administration (NIPA) and Smart Zambia Institute (SZI) have signed a Memorandum of Understanding (MOU) to improve Information Communication Technology (ICTs) infrastructure, which will directly translate into Zambia enjoying some of the benefits of the globalised economy.

NIPA Executive Director Prof. Royson Mukwena said training of public sector employees, the private sector and the general citizenry is an investment in human capital and contributes to sustainable industrial development.

Mukwena said NIPA agrees with Smart Zambia’s goals to build capacity in the country’s local human resource in the areas of ICTs so that the nation cuts down on expenditure spent to hire foreign expertise to respond to the country’s ICTs infrastructural requirements.

Speaking during the signing ceremony, which took place at Government Complex in Lusaka at the SZI Office today, he said ICTs will make the public sector more responsive and adaptive to global trends.

He also said the MoU would contribute to incorporation of ICTS in the area of Climate Studies and Disaster mitigation at NIPA, citizens’ capacity building in ICTS, capacity building and training of public service employees in ICTS and ICT consultancy at higher level to ministries, provinces and other spending agencies (MPSAS) and other institutions.

He said it would also contribute to scientific and applied research including software and system development projects, workshops/seminars and community service, internship/industrial placement, exchange and sharing of study reports and sourcing masters and doctoral scholarship and fellowship in e-government and computer/it fields and others.

Speaking at the same function, Smart Zambia Institute National Coordinator, who is also Deputy Secretary to the Cabinet, Dr. Martine Mtonga said improving ICTs infrastructure is an effective and efficient way of running the country’s economy.

He added that digitalisation of the economy promotes the livelihoods of citizens at various levels of society.

He also noted that the MoU between the two institutions was timely as it was a mode of closing up the existing digital divide in the country and ensure optimal usage of ICTs and e-Services by the Citizens.

“Through the development and implementation of the Government Service Bus (GSB), Government through SMART Zambia Institute provides an opportunity for Citizens to access government services effortlessly and in a more effective and efficient manner and therefore spurring social economic development for the citizens and the nation, he said.”

0 Comments
0 likes

National Institute of Public Administration (NIPA) and

Lifestyle

The University of Zambia (UNZA), one of Zambia’s highest learning institutions says it is on course to finding a local treatment solution for the corona virus and will have results that will be presented to both the Ministry of Health and the public by April 2020.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, UNZA School of Natural Sciences Lecturer and Researcher Dr. James Nyirenda who is also the task force leader said the institution has received the cells, which will be tested to see if they are able to destroy the virus.

Dr. Nyirenda said once the results are ready, they will be presented to the funders adding that it will be up to the policy makers to make the final decision depending on the findings of the tests that will be done.

He expressed happiness that the cells used for testing had arrived as there were some challenges in acquiring them due to Covid-19 travel restrictions and most flights could not reach the country.

He added that as a public university, it does subscribe to public procurement procedures and one of the procedures took long thereby delaying the arrival of the cells noting that all that is left to do is complete the paperwork before testing can begin.

“We are trying to sort out one or two things in terms of protocols for experimentation, the reagents that came need to be tested now, to see if the cells are capable of destroying the virus, they are supposed to be pure compounds and since Zambia doesn’t make pure compounds, we had to import them, he said.”

“Tests need to be done in order to see what works and what doesn’t, what works, we concretize and proceed with the same research to see if there can be mass production”, he said.

He noted that the research has two components, which are natural products and conventional drugs adding that conventional drugs are already in existence so it is just a matter of advising the public on which drugs do work and drugs that are thought to be working that do not.

“Natural products do not use scientific proof so that is the science we are trying to prove or provide to those traditional plants, because we use indigenous knowledge system, these are knowledge systems where somebody just says this tree works, but there is no proof, so we are trying to experiment and come up with facts, he said.”

He said he and his team has continued to perform more tests to see whether these drugs work and if not, he will be able to give scientific and expert advice to the public. “With science, we work with facts, we work with reality and test something, we are testing cells so we have to prove emperically that certain medicines that have been talked of really work or not as well as certain natural products, he said.”

Concerns on the timeline for certifying local treatment of Covid have continued to be postponed due to lack of local capacity and compounds to conduct independent tests.

Concerns have also arisen as to whether the country will be able to independently test the vaccines that have been allocated to Zambia following concerns around the possibility of abuse of vaccines. Advances in Science and technology remain a major challenge for Zambia and most African states which have rendered efforts to catch up on development difficult.

0 Comments
0 likes

The University of Zambia (UNZA), one of

Mining

The Industrial Development Corporation (IDC)m the parent or holding company of ZCCM-IH has clarified that the US$1.5 billion debt accrued after the buy back of Mopani Copper Mines from Glencore and FQM does not add to Zambia’s sovereign debt.

In a statement issued to the Zambian Business Times – ZBT, IDC CEO Mateyo Kaluba stated the that “the payment of the US$1.5 billion transaction debt by Mopani to Glencore was the burden of the mining company itself [Mopani] and not the State. He added that the mine’s debt as a result of this transaction had no impact on the country’s sovereign debt.

And the IDC CEO further stated that ZCCM-IH has the capacity to efficiently operate Mopani Copper Mines. Kaluba said the mining company’s Board of Directors and Management would be competent enough to professionally run the newly acquired mine.

“In terms of our confidence that the mine will be professionally run, we have no doubt,” He added that the company would further seek a strategic equity and technical partner to enhance its capacity. He reiterated that the acquisition of Mopani Copper Mine by ZCCM-IH was consistent with the direction the mining conglomerate was taking to have more control of mining interests in the country.

On questions about who was involved in the deal process, Kaluba said the IDC, as ZCCM-IH’s holding company, was involved through an extensive consultation process to give the necessary guidance and approvals.

He explained that the deal was structured in such a way that Glencore would be the off taker of Mopani’s copper and that a 10% portion of the proceeds would go towards debt repayment. He said the debt would be fully paid over the next 10-17 years depending on the mine’s production capacity and fluctuations of the copper prices.

Kaluba urged Zambians to be more confident in taking up more challenging assignments, as the government had created an enabling environment where companies such as ZCCM-IH and IDC are able to be more assertive in taking control of national assets.

0 Comments
0 likes

The Industrial Development Corporation (IDC)m the parent

Mining

Yesterday, we as Zambian Business Times – ZBT carried an article which gave the information on the buy back of Mopani Copper Mines by ZCCM-IH, the erstwhile owners before the privatization.

The full details of the transaction are yet to be fully availed, with some high level details being availed by each party to the transaction. ZCCM-IH chairman Eric Silwamba stated that a more detailed note will be issued to meet listing disclosure requirements under the Lusaka Securities Exchange – LSE in the next few days.

The beauty of this transaction this time around is that all the parties to the deal from ZCCM-IH, Glencore and FQM are all listed on different security exchanges which all have at least some higher levels of disclosure requirements. This is perhaps the biggest benefit and the reason why we as ZBT continue to advocate for listing of more state owned enterprise – SOE’s.

We have seen and we expect that each party to this transaction is carefully managing their stakeholders and releasing information strategically to assures its key stakeholders that they have done a good deal. But as the saying goes, the devil is in the details.

Below is the statement issued by Glencore dated 19 January 2021 availed to ZBT. We reproduce it verbatim below:

Glencore today announces that its subsidiary Carlisa Investments Corp. (“Carlisa”), in which Glencore holds 81.2% of the shares, has signed an agreement with ZCCM Investments Holding plc (“ZCCM”) to transfer its 90% interest in Mopani Copper Mines plc (“Mopani”) to ZCCM, the owner of the remaining 10% interest in Mopani, for US$1 and the Transaction Debt (as defined below).

Completion of the sale is conditional on receipt of certain regulatory approvals in Zambia and on the approval of the shareholders and board of directors of ZCCM, and is expected to occur within the next three months.

Mopani has been funded by borrowings from Carlisa and other members of the Glencore group. On completion, US$1.5 billion of debt (the “Transaction Debt”) will remain owed by Mopani to Glencore group creditors on the following terms:

a. interest under the Transaction Debt will be capitalised for the first three years after completion, and thereafter will be payable quarterly at LIBOR + 3% (subject to a switch to an equivalent interest rate based on SOFR); and

b. principal outstanding under the Transaction Debt will be repayable under a dual mechanism whereby:

i. 3% of gross revenue of the Mopani group from 2021-2023 (inclusive), and 10-17.5% of gross revenue of the Mopani group thereafter; and

ii. 33.3% of EBITDA less tax, changes in working capital, capital expenditure, royalty payments and interest and principal (calculated under the first mechanism) payments in respect of Transaction Debt, is at the end of each quarter required to be paid. Repayment of principal (together with accrued interest) may additionally be required in the event of an occurrence of certain other early prepayment events, including certain change of control events in respect of Mopani.

After completion of the sale, Glencore will retain offtake rights in respect of Mopani’s copper production until the Transaction Debt has been repaid in full.

As ZCCM is the holder of 10% of the voting rights in Mopani, a subsidiary undertaking of Glencore plc, the transaction falls within the criteria set out in Listing Rule 11.1.10R. Accordingly, Glencore has obtained written confirmation from a sponsor that the terms of the transaction are fair and reasonable as far as Glencore shareholders are concerned.

To get a rounded view of the transaction, you also need to look at what FQM has posted, what out for from ZBT. We are of the view that after reviewing the transaction and information shared by all the three parties, it is from there that we can then make a more informed inquiry…

0 Comments
0 likes

Yesterday, we as Zambian Business Times -

Companies

The Zambia Revenue Authority (ZRA) tax refunds have jumped up by 12.3% year on year despite the earlier indication that tax audit of mines and related other entities would curb the drain.

Further, ZRA has failed to meet its K59 billion revenue collection target that was set for the 2020 financial year, registering K1.3 billion or 22 percent below the annual target.

This below target performance by ZRA is further exacerbated by the fact that the Zambian Kwacha has depreciated by over 60% within a year. Meaning that the Kwacha tax collections value has lost a further 60% of value or purchasing power internationally, if used to pay for US dollar or forex denominated government spend.

ZRA Commissioner General Kingsley Chanda said the authority collected K57.7 billion last year 2020, which represents 17.7% of the Gross Domestic Product (GDP) compared to 17.8% in 2019. The global benchmark for an efficient tax collection system is collection of 18% of GDP.

However, the ZRA Commissioner General defended his institutions performance stating that “the performance is highly commendable because revenue collection was a difficult undertaking in 2020 due to the unfavourable economic conditions that prevailed during the year including the outbreak of the covid-19 pandemic, which put a strain on public resources and economic activities”.

And the revenue target for 2021 has remained flat with no notable stretch added, largely maintaining the target that was set for 2020. ZRA has been given a tax revenue collection target of K59.3 billion for the year 2021 adding that it will be difficult to achieve its set target due to the continued effects of the covid-19 pandemic on the economy.

Chanda further clarified said this [below target] performance relates to taxes collected by ZRA only and does not include revenues collected by other government departments in form of non-tax revenue and other fees noting that the Ministry of Finance will at an appropriate time and in line with its mandate give a brief on the revenue collected outside ZRA.

Chanda said the authority paid out K12.9 billion in terms of tax refunds compared to K10.5 billion, which was paid out in 2019 representing a 12.3% growth in tax refunds adding that of this amount, K12.64 billion was paid in VAT refunds of which K8.5 billion was paid out to the mining companies.

He added that direct taxes refund stood at K72.3 million while K163.5 million was paid in customs refunds. He said the increase in the amount refunded in 2020 is in line with the authority’s desire to dismantle all its outstanding tax refunds especially VAT adding that this remains one of the key operational priorities for ZRA and government.

He said the fiscal incentives announced by the government, which were aimed at containing the spread of the virus and had put the economy on the road to recovery, had a chilling short-term effect on revenue mobilisation.

In response to the disruptions to the economic fundamentals, government revised its 2020 tax revenue projection downwards from the K59 billion, which was approved. Chanda said this during a media briefing that was held in Lusaka on January 13, 2021.

0 Comments
0 likes

The Zambia Revenue Authority (ZRA) tax refunds