Thursday, November 18, 2010

Musokotwane advises foreign mining firms to support local enterprises

Musokotwane advises foreign mining firms to support local enterprises
By Chiwoyu Sinyangwe and Kabanda Chulu
Thu 18 Nov. 2010, 04:00 CAT

FINANCE minister Situmbeko Musokotwane has advised foreign mining firms that the only way to protect their investments in the country is by making their operations relevant to local communities.

During Konkola Copper Mines (KCM) Plc’s post-Initial Public Offer luncheon, Dr Musokotwane said there was need for mining firms to give business lines to local entrepreneurs and at the same time pay taxes to the Treasury.

KCM, the country’s biggest mining operation is dual listing on the London Stock Exchange and Lusaka Stock Exchange under a new company called Konkola Resources in a transaction the company expects to raise US $1.1 billion to boost its operations.

Although the exact date for listing has not been set, sources close to the transaction have revealed that Konkola Resources would be listed in London before the year end, “soon after,” in Lusaka.

Dr Musokotwane who praised KCM for listing, in a move that would allow Zambians to own shares in the mining firm which projects to raise copper output to 400, 000 metric tonnes by 2012,

[At present prices of $7,000 per tonne or more, that is $2.8 billion. - MrK]

said there was need for the mining firms to remove perceptions that mining firms were reaping from communities they operate in without paying back.

“You can have all laws in this country to protect this industry, but the most important thing to protect this investment is to make yourself relevant to the community,” said Dr Musokotwane.

Earlier, KCM chief executive officer Kishore Kumar said the listing provided Zambia with a useful marketing tool to attract many other global players to invest in other sectors in the country apart from mining.

KONKOLA Resources Plc, the holding company of KCM, yesterday announced intentions to list some of its shares on the London and Lusaka Stock Exchanges with expected net proceeds of US $1.1 billion to be channelled towards its capital expenditure programme and loan repayments.

In a statement that did not include share structure breakdown and when the listing will take place, the company expects the global offer to comprise an issue of new ordinary shares and the sale of existing ordinary shares to institutional investors in the United Kingdom and elsewhere.

Additional ordinary shares of up to 15 per cent of the global offer are expected to be made available pursuant to an over-allotment option. All offer shares will be subscribed for, or purchased, at the offer price.

The company intends to pursue a listing on the Lusaka Stock Exchange and to offer new ordinary shares to Zambian investors by public offering shortly following admission as well as making an allocation of shares to employees.

Commenting on the matter, ZCCM-IH chairman Alfred Lungu said the initial public offer (IPO) would ensure Zambian investors making direct investments in the company.

“This first listing of a Zambian mining company is an important milestone in the history of Zambia , a development based on the substantial investment already made in KCM’s operations. The listing will help unlock value in our portfolio and encourage further investment in Zambia ,” stated Lungu.

Labels: , , , , ,


Post a Comment

Subscribe to Post Comments [Atom]

<< Home