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Mining

The Zambia Chamber of Mines has urged Government to urgently engage with the sector in order to forestall the negative impact that will be inflicted on the health of the Zambian economy.

The mining chamber say that if measures are not taken immediately to address the issues facing the mining sector in the midst of COVID-19, Zambia will be adversely affected as mining is a key component of Zambia’s economy.

The Chamber of mines told the Zambian Business Times – ZBT that they had over three weeks ago submitted to the mines ministry, a broad based three-phase proposed economic plan to urgently manage the economic impact arising from the pandemic with a view to providing some on the ground industry view and guidance to government on the critical areas to be urgently addressed.

The proposal included immediate relief measures that could be implemented by Government in a matter of days, followed by an emergency support package for which financial support could be sought from multilateral lenders such as the IMF and World Bank, and lastly, a ‘fight back’ fiscal proposal to be implemented once the COVID-19 pandemic has abated and investment is needed from which to rebuild the economy.

But the Chamber of mines has indicated that since submissions were made, all mining industry stakeholders have been hoping that some significant stimulus measures would be instituted as the industry’s circumstances have become more desperate with issues being faced at Mopani Copper Mines being an example of this distress.

In an earlier statement made available to the Zambian Business Times – ZBT on April 22, 2020, the Chamber of Mines considers it essential that the industry and government seize control of the negative narrative that has taken on a life of its own against the mining sector.

The Chambers membership has pledged to support government efforts in its engagements with multilateral institutions to obtain assistance firstly in the fight against the epidemic and secondly for the support of economic recovery.

“The mining industry in Zambia recognizes the catastrophic nature of the public health crisis as well as the untold harm this virus will wreak and is wreaking on the Zambian economy. Several mining companies have rushed to Government’s aid to demonstrate their solidarity with the Government and people of Zambia through various interventions. This is in recognition of the urgency and need to stand shoulder to shoulder with the mines host communities at this very trying time,” Chamber of Mines. `

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The Zambia Chamber of Mines has urged

Companies

Airtel Networks Zambia Plc has donated K5 million to the Ministry of Health as part of the Company’s Corporate Social Responsibility in the fight against COVID 19.

Handing over the cheque to the Minister of Health, Dr. Chitalu Chilufya at the Ministry Head Office, and flanked by Ministry of Transport and Communication Permanent Secretary, Engineer Misheck Lungu, Airtel Managing Director Apoorva Mehrotra said his company was joining in the fight against the pandemic that has affected almost all the countries in not just Africa but the World over.

“This virus respects no borders and Airtel is committed to play its part in tackling the pandemic. Today, we announce our support for Zambia’s fight against COVID-19 through a contribution of K5 million which we hope will go a long way in helping you acquire equipment for our frontline staff who are working hard to look after the sick. As part of the private sector we believe it was only right for us to mobilize resources, alongside the Government, to fight the raging pandemic,” Mehrotra said.

Speaking at the handover ceremony, Minister of Health, Dr. Chitalu Chilufya thanked Airtel for the timely donation saying the Ministry was grateful as it would go a long way in helping the fight against COVID 19.

“I want to say we are thankful for this timely donation as it comes at a time when we all need to put our heads together to fight this pandemic,” Chilufya said.

And Engineer Lungu said his Ministry was happy to see the many stakeholders contributing to the fight against COVID 19 and thanked Airtel for the K5million donation.

In a statement made available to the Zambian Business Times – ZBT on April 22, 2020, Lungu said the Ministry that oversees the telecommunication industry is delighted to see this sort of commitment saying working together with the private sector will be able to achieve much more.

Airtel has already taken several steps to help mitigate the impact of social distancing on its customers during the coronavirus outbreak and implemented various measures in all retail shops to minimise contact as well as providing hand sanitizers for its frontline staff and gloves for all staff that have to handle cash.

The Company is also assisting by disseminating messages about the pandemic at no cost to the entire base of Airtel customers every day and has also donated some phones to the Lusaka Provincial Health Office to assist as they follow up patients.

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Airtel Networks Zambia Plc has donated K5

Mining

A Mining expert Philasoni Chikwanda has urged government to be thoughtful as it continues to dialogue with Glencore, the majority shareholders of Mopani Copper Mines – MCM following its decision to put the mines on care and maintenance.

Mopani Copper Mine was last week placed under care and maintenance by its parent company Glencore which resulted to sending an estimated 11, 000 workers on force leave. This decision was however objected by the Zambian government and in a statement seen by the Zambian Business Times – ZBT, Mopani has since temporarily rescinded its decision to put its copper mines under care and maintenance.

Chikwanda told the Zambian Business Times – ZBT in an exclusive interview that following the 90 days given to conclude the matter, government should reflect on the company’s cost of production relative to commodity prices considering the current low prices on the market.

He said given the current low copper prices on the market, the cost of operating a mine especially underground mining has gone up hence when the cost curve is low, operations automatically go down leading to a closure of mining activities or going under care and maintenance.

“These are issues that government has to interrogate carefully, the debate should revolve around the cost production for Mopani Copper Mines because decisions should also ensure that they benefit the company and help them survive especially in this current COVID – 19 situations,” He said

Meanwhile, Finance Minister Dr. Bwalya Nga’nda had on April 20, 2020 announced during a media briefing that projections suggest that the reduction in the price of copper on the London Metal Exchange – LME will continue until June resulting in a drop in mineral royalty and income tax payments from mining companies.

He said Pay as You Earn (PAYE) from the mining sector is also expected to fall as some contractors may lose their contracts going forward hence the scaling down of mining sector activities will lead to reduced engagement of foreign providers of management services and will affect Withholding tax receipts on management fees and consultancy.

Chikwanda has called on government to dialogue with other mining companies to find ways in which companies will survive amidst COVID – 19 and ensure aggressive measures are taken to alleviate this situation.

Analysts at ZBT have cautioned saying the rescinding of the decision by Glencore may just be meant to safeguard and hold on to the mining license and that any premature jubilation from the government or unions should be avoided. Copper prices are currently low and old underground mines cost of production is higher than open cast mines.

MCM and KCM are underground mines and their cost of production is much higher than say the open cast mines operated by First Quantum Minerals in Solwezi, hence you find that some copper mines are more profitable than others even if they are all mining copper.

The cost of production also determines the break even prices. The underground mines use up a lot more power and the price of electricity has been going up, open cast mines rely more on diesel to power their trucks and machinery while underground mines require more electricity to pump out water and keep underground operations going. So, their are some technical considerations beyond what the eye can see.

The statement from Mines Permanent Secretary Barnaby Mulenga was that the Mine has decided to give the 90 day notice. When you critically look at the implication of this, it’s more of saying they will proceed to place the mine on care and maintenance after 90 days (3 months), so the root problem still persists.

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A Mining expert Philasoni Chikwanda has urged

Lifestyle

The Consumer Unity for Trust Society – CUTS has expressed concern with the increased cost in the purchase of face masks on market which have now reached about K15 to K25 in some retail stores and pharmacies, saying it is unaffordable for some many consumers to spend over K450 (K15 by 30 days) per month (surgical masks are disposable) to keep safe.

The health officials and the covid 19 task force announced that wearing of face masks is mandatory by all citizens especially in public places in order to curb the spread of COVID- 19. This pronouncement has led to an increase in demand of the face masks and a survey conducted by CUTS indicates that a family of 5 would need to spend over K2,000 of masks in order to adhere to the health directive.

Zambia has an average family or household size of 5 people according to official statistics and this simply translates to a required spend on surgical masks said to be the recommended mask of K15 by 5 members of the family by 30 days in a month = K2,250).

CUTS Centre Coordinator Chenai Makumba says most consumers particularly low income earners would not find it possible to spend such an amount on face masks without severely disrupting their household expenditures therefore imperative that solutions be found to this problem at the soonest.

In a statement made available to the Zambian Business Times – ZBT by CUTS Communications Officer Njavwa Simukoko, Makumba said while the wearing of cloth masks has been advised, these masks have been proven to be less effective in spreading the virus than surgical masks, hence has potential to put the entire population at risk.

“We therefore urge government and innovators to take necessary steps to ensure that masks are accessible and affordable for all, especially to low-income earners who are most in need of these masks”.

“Making use of various fiscal measures could assist and in this regard we also urge the Competition and Consumer Protection Commissions – CCPC to increase their monitoring of retailers that are exploiting consumers during this time of need,” She added.

CUTS has also urged manufactures involved in production of face masks to consider placing recommended retail prices on the masks in an effort to deter retailers from charging prices that are too high.

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The Consumer Unity for Trust Society –

Lifestyle

Children’s education is a priority while they are at home and it is the opportunity to spend time with them during this period of COVID-19, hence the importance of keeping their minds stimulated.

TopStar’s array of content providers such as ST Kids, da Vinci Kids, Baby TV are offering various solutions to educate children while having them entertained.

ST Kids (channel 300) has launched a new educational TV program called “Homeschooling”, using creative education methods to teach about language, science, handcraft, painting and dance

Da Vinci Kids channel (channel 308) offer edutainment shows about Science, Math & Tech, history, culture, nature and sport for both children and families. Baby TV (Channel 305) has designed programs with childhood development experts to help toddlers acquiring early skills.

The newly added channel Mindset Learn (channel 309) is delivering lessons on several subjects such as Mathematics, Physical Science and Life Science to children from grade 8 to 12.

In a statement made available to the Zambian Business Time – ZBT, TopStar’s acting CEO says as a public signal distributor in Zambia, it is its core strategy that children play a special role in families.

“As we are going through special times, we make it a priority to deliver educational programs to our subscribers, so every child can keep learning on a daily basis, safely and calmly at home”, he said.

TopStar subscribers can make their payments through or Authorized dealers and through mobile banking platforms which are Eco bank, Standard Chartered Bank and Barclays bank, He said. Customers are also encouraged to use Mobile money platforms.

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Children’s education is a priority while they

Companies

The Zambian government has taken additional measures to mitigate the impact of COVID-19 given that the country has continued to witness disturbing developments of the increased number of confirmed cases which are currently at 65 with 35 recoveries and 3 deaths as at April 20, 2020.

Minister of Finance Dr. Bwalya Nga’ndu has disclosed that the ministry has released K500 million to the Public Service Pensions Fund to pay over 1,500 retirees or their beneficiaries, K170 million to Banks to clear third party arrears and K140 million to various road contractors adding that the fund are part of the K2.5 billion which had previously been announced by President Edgar Lungu in his last address to the nation.

Adressing the media on the country’s economic update on April 20, 2020 in Lusaka, Dr. Nga’ndu said the treasury will now focus on completing the ongoing verification exercise which will permit payment of K1 billion to various suppliers of goods and services to Government.

He said tight liquidity conditions continue to impact on businesses and households and the financial sector hence to alleviate the economic pressures associated with the Covid-19 induced liquidity challenges and in particular to prevent liquidity constraints to financial institutions degenerating into a solvency problem.

Other measures taken by government include waiving of tax penalties and interests to assist companies and businesses manage their cash flows during this period when they are faced with reduced revenues.

The finance minister said Government has decided to waive tax penalties and interest on outstanding tax liabilities resulting from the impact of Covid-19 and that the Zambia Revenue Authority – ZRA will soon issue guidelines on the criteria on who qualifies, the period of relief and other related modalities.

“The current situation also provides Zambia with a new opportunity for domestic agricultural and locally manufactured products to be sold in great numbers in the major chain stores found in the shopping malls. At the same time, we are faced with an opportunity as never before to begin to build distribution value chains for local products that are sustainable going forward,” He said

He disclosed that Zambia has also applied to the World Bank, the African Development Bank and Afrexim bank to be considered for support under their various Covid-19 Emergency Funds. Some of the support needed is suspension of debt servicing until the economic conditions improve.

“Bilateral discussions have also commenced with a number of G20 countries on the postponement or rescheduling of debt service payments over a period to be agreed. Engagement with the bilateral partner’s center around the possibility of them meeting the financing gap arising from the adverse effects of Covid-19. I will provide an update as and when we reach agreements,” He added

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The Zambian government has taken additional measures

Tech

Zambian Breweries – ZB, a local unit global brewing giant AB InBev has announced its plans to start producing alcohol based hand-sanitizers to be donated to the Ministry of Health towards the fight against the COVID-19 using commercial ethanol.

ZB Corporate Affairs Director Ezekiel Sekele told the Zambian Business Times – ZBT in an exclusive interview on April 17, 2020, that the company is currently considering the production of hand sanitizers not for commercial purposes but for the donation towards COVID-19 and is awaiting approval from the Zambia Medicines Regulatory Authority – ZAMRA.

He said ZB is expected to begin the process in a weeks time as it is currently working with its laboratory technicians to ensure it meets World Health Organization – WHO standards of 80% alcohol adding that once approval is given it will package in 250ml bottles for the donation.

When asked about the quantity of hand sanitizers to be produced and its investment, Sekele said the quantity of hand sanitizers will be determined once discussions with ZAMRA come to a conclusion as the process requires different parameters compared to the system used when producing alcohol for human consumption.

“Given the knowledge and experience that we have in alcohol production, we are considering to start producing alcohol based hand sanitizers to be donated to hospitals during this pandemic. It should also be noted that content of alcohol needed for hand sanitizer is as high as 70 to 80% compared to 4 to 5% percent used for human consumption hence this will require different systems and techniques to undertake the project,” He said

He added that the company is keen into ensuring that the law is followed considering that some individuals have taken advantage of the situation to supply counterfeit products in the name of making profit.

When asked if ZB considers to manufacture ethanol locally rather than importing it, ZB Public Relations Consultant Gillian Langmead said in a separate interview that producing ethanol is not a simple process as it needs to comply with strict measures to make sure that alcohol is distilled correctly to be used for human care.

She said Zambian Breweries currently does not have technology to produce ethanol as the current brewing process creates alcohol from its natural fermentation process but needs the equipment to extract the alcohol to produce sanitizers which is called de-alcoholization process.

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Zambian Breweries – ZB, a local unit

Markets

Finance Minister Dr. Bwalya N’gandu has stated that the Zambian government budgeted income will fall short of target by at least K14.8 billion or 19.7 % [approximately 20%] of the approved 2020 budget, adding that the reduction by tax type will be determined as more information unfolds.

He also confirmed that the International Monetary Fund – IMF has projected that Zambia’s economy will shrink by a negative 2.6% in 2020 from the earlier projection of 3.6% amid to COVID -19.

Speaking when giving an update on the country’s economy on April 20, 2020 in Lusaka, the Minister of Finance announced that the economic adjustment due to COVID- 19 will further result in a severe drop in revenue.

Dr. Nga’ndu further said that this estimated impact does not include the revenue loss arising from the tax relief measures that were announced two weeks ago but are based entirely on the expected economic adjustments due to COVID-19.

“In our projections, we have assumed that the peak period for impact of the Corona Virus on revenues is April and May. If we further assume that the pandemic will be quenched by August 2020, we project that the negative impact on revenue will continue until December 2020,” He said

In addition, the Minister said projections suggest that the reduction in the price of copper on the London Metal Exchange – LME will continue until June resulting in a drop in mineral royalty and income tax payments from mining companies.

He said Pay As You Earn (PAYE) from the mining sector is also expected to fall as some contractors may lose their contracts going forward hence the scaling down of mining sector activities will lead to reduced engagement of foreign providers of management services and will affect Withholding tax receipts on management fees and consultancy.

Meanwhile, the scaling down of economic activities in the country is expected to cut across all sectors including manufacturing, transport, power generation and transmission, wholesale and retail trade, tourism and the hospitality industry in general, however, this will basically translate into a reduction in all tax and non-tax revenues among them PAYE, VAT, customs duty, excise duty, fuel levy, export duty, road user charges, fees and fines.

Zambia has so far witnessed disturbing developments as the virus has increased in terms of numbers of people confirmed as positive and also in terms of geographic spread. As at April 20, 2020, the country recorded 65 confirmed cases, 35 recoveries and sadly 3 deaths due to COVID- 19?

The globally rampaging corona virus is no longer confined to the capital city of Lusaka only, but has spread to other parts of the country which include Zambia’s mining and industrial hub region of the Copperbelt, Central province [Kabwe] and other parts of Lusaka province [Kafue].

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Finance Minister Dr. Bwalya N’gandu has stated

Companies

Following the directive for the closure of night clubs, restaurants and bars as a preventive measures towards further spread of COVID-19, Zambian Breweries – ZB has recorded a reduction in beer consumption and as a result cut its alcohol production by about 50% during this pandemic period.

The company has seen a slowed down consumption and sales volumes and therefore cut production volumes on threats of the coronavirus outbreak and it likely to record huge losses if the situation persists.

ZB Corporate Affairs Director Ezekiel Sekele has told the Zambian Business Times – ZBT in an exclusive interview on April 17, 2020, that the company has since lessened on beer production as producing more than enough will result into huge losses.

He however stated that despite the closure of bars and night clubs, alcohol is still being purchased in chain stores on take away basis, hence the company has not completely been negatively affected as responsible citizens have continued to adhere to government’s directive by drinking from their homes.

Sekele said ZB is still operating through its off-premise channel (distributors, wholesalers and supermarkets) for take-home occasions only and has pledged to complement governments preventive measures that have been announced to fight the COVID-19 pandemic.

“During this period, we are working tirelessly to keep our operations running in a manner that is safe and in accordance with the law and current public health measures. However, we are joining government in urging all consumers to enjoy and drink responsibly from home,” He added

He has further called on bars and night club owners to adhere to governments’ directive as doing so will not only protect people’s lives, but also avoid complete shutdown of stores which would negatively impact local businesses.

“We are grateful to government for allowing liquor stores to operate on take away basis because the complete closure of these premises would result in closure of business and to Zero percent performance and further have a huge impact to VAT and other statutory contributions which ZB makes which is about K80 to K100 million,” He said

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Following the directive for the closure of

Markets

Zambia’s inflation rate for the month of March 2019 has recorded a decrease of 0.3 percent the largest decrease in four months.

The March inflation rate decreased from 7.8 recorded in February 2019 to 7.5 recorded this month and this has meanly been attributed to the reduction in fuel and Lubricants (Diesel and petrol) and solid Fuels such as charcoal and petrol.

Despite the reduction in fuel prices that led to a decrease in the inflation rate, the annual food inflation rate has recorded a 0.5 percent increase from 7.7 percent recorded last month to 8.2 recorded this month and this has mainly been attributed to the price change in products such as maize grains, Samp, meat products and fruits, Acting Director of Census and Statistics Central Statistics Office (CSO), Goodson Sinyenga has said.

Although the annual food inflation rate has recorded an increase, the annual nonfood inflation rate has recorded a 1.1 percentage point decrease and this has mainly been attributed to the price change of items in the transport CPI main group such include both liquid and solid fuel.

Meanwhile the month on month inflation rate for the month of March has recorded a 0.4 increase from 0.7 percent recorded last month to 1.1 percent recorded this month. This means that on average, prices of goods and services increased by 1.1 between last month and this month and this increase has mainly been attributed to the change in the prices of food and non-alcoholic beverages.

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Zambia’s inflation rate for the month of