Maravi

FQM presents $18.1m dividend to ZCCM-IH

COMMENT - The nature of this measly $18.1 million dividend over a period where Kansanshi made hundreds of millions if not billions of dollars in profits, is also touched on here and here.

FQM presents $18.1m dividend to ZCCM-IH
By Fridah Zinyama
Tue 11 May 2010, 04:00 CAT

FIRST Quantum Minerals (FQM), the owners of Kansanshi Mining PLC has presented a dividend cheque of US $ 18.1 million to Zambia Consolidated Copper Mines and Investment Holdings (ZCCM-IH). And mines minister Maxwell Mwale has said those stakeholders calling for the re-introduction of the windfall tax do not know what it takes to run government.

Meanwhile, ZCCM-IH board Chairman Alfred Lungu said the company’s major strategic objective was to diversify its investments portfolio into other sectors of the economy apart from mining which is susceptible to external shocks.

During a handover ceremony of dividend cheque to ZCCM-IH at Intercontinental Hotel yesterday, FQM resident director Kwalela Lamaswala said the payment of dividends to government through ZCCM-IH follows a review of Kansanshi dividend policy by the board and comprises a special dividend of US$ 15.6 million for the financial years ending 31st December 2007 and 2008 and a final dividend of US$ 2.5 million for the year ending 31st December 2009.

“Kansanshi Mining has reinvested most of its retained earnings since the mine came into production in December 2004,” he said. “This re-investment has enabled Kansanshi to increase its copper production from 69,000 metric tonnes in 2005 the first full year of production to 244,979 metric tonnes in 2009.”
Lamaswala said this was a growth in excess of 350 per cent over the four-year period.

And Mwale said the cheque dividend payment made to ZCCM-IH was the largest single payment made to government in a long time.

“Future prospects lie in exploration and Kansanshi Mine has been undertaking such activities in North Western Province,” he said, adding that re-introducing the windfall tax would lead to a reduction of such activities and hence threatening the future of the mining sector.

“Others may not know what windfall taxes do to exploration, this is why we are happy with the decision that the Australian government have made to introduce super profit taxes which are like a windfall tax as they will chase away investors to Africa,” Mwale said.

Meanwhile, Lungu said the dividend payment from Kansanshi Mining Plc presented a valuable return on ZCCM-IH’s investment and also gave an opportunity for the company to further enhance its investment portfolio.

“As the premier investment vehicle of government, it is our responsibility to seek and pursue viable investment opportunities locally and abroad that will yield positive returns,” he said.

Lungu said significant investments in the mining sector have however made the company susceptible to external shocks, specifically the fluctuation in base metal prices on the international market.

“This was particularly evident during the recent global financial crisis…tumbled drastically and are only commencing to stabilise,” he said.

Lungu said whilst investment into mining companies still remain viable, it has been exceptionally difficult for the company to achieve its objectives, especially the enhancement of the livelihoods of Zambian citizens.

“This is why, it is one of our major strategic objectives to diversify investment into other sectors of the economy,” he said.

Lungu said ZCCM-IH had to this end identified some land in the Central and Copperbelt provinces for it to undertake some agricultural activities which have enormous potential.

“Hopefully by the end of the third quarter, a major announcement would be made by the company to this effect,” said Lungu.

Labels: CORRUPTION, DIVIDENDS, FIRST QUANTUM MINING, KANSANSHI MINING PLC, ZCCM-IH

posted by MrK @ 4:02 PM