Maravi

Govt closes bidding process for LCM

Govt closes bidding process for LCM
Written by Chiwoyu Sinyangwe
Thursday, April 16, 2009 2:37:03 PM

THE government yesterday closed the bidding process for the takeover of operations at Luanshya Copper Mines (LCM) which is expected to resume operations this June, sources have disclosed. Mines minister Maxwell Mwale was not readily available for comment on the matter.

But according to sources within the ministry, LCM which was closed and placed under care and maintenance last December by its former owners - Switzerland-based International Mineral Resources AG and Bein Stein Group Resources of Israel [that would be the Beny Steinmetz Group or BSG - MrK] would be reopened by June this year.

The sources explained that after the LCM assets which included Baluba Shaft and US $351 million greenfield Mulyanshi copper project were handed back to the government last week, the Ministry of Mines wanted to expedite the selection of the new investor from among the companies that had shown interest in taking over the mine.

The sources explained that some of the mining companies that had expressed interest in taking over the mine included Vedanta Resources Plc, the majority shareholders in Konkola Copper Mines, and Chinese Nonferrous Metal Mining Group, with the latter strongly tipped to take over the mine.

Only Baluba and Mulyanshi are to be sold to the new investor while LCM management was intending to resume operations of the Chambishi smelter in June and would be treating concentrates from Democratic Republic of Congo and other mines within the country.

The Chambishi smelter has the capacity to produce around 4,000 metric tonnes of cobalt as well as 40,000 tonnes of copper a year.

Recent indications from the mines ministry are that the prospective LCM investor would be given a 65 per cent stake in the company, with the government through ZCCM Investment Holdings (ZCCM-IH) retaining the remainder, 35 per cent.

LCM management put the mine under care and maintenance in December last year, blaming the decision on the collapsed international copper prices.

The mine was finally handed back to the government after April 6, at which LCM management met the firm’s creditors where 86 per cent of them agreed to a repayment scheme which meant the mine paying half of the debt it owes.

Labels: BENY STEINMETZ GROUP RESOURCES, FDI, LCM

posted by MrK @ 1:38 PM