Maravi

ZCCM-IH invests $170m in Equinox

ZCCM-IH invests $170m in Equinox
By Chiwoyu Sinyangwe
Wed 28 Mar. 2012, 12:59 CAT

ZCCM-IH in the first six months of 2011 received K87.3 billion (about US $18.4 million) in dividends from four of the over eight foreign owned mines it holds a stake in. And ZCCM-IH says it has invested the US $170 million received from the sale of 2.28 per cent stake in Equinox Minerals Ltd, the former parent company of Lumwana Mines.

ZCCM - Investment Holdings (ZCCM-IH) is a company formed and majority-owned by the Zambian government to retain minority equity in the privatised and current foreign owned mines. Meanwhile, ZCCM-IH fears the current prolonged debt crisis in Europe will hurt international copper prices.

During the first six months ending September 2011, ZCCM - IH received in dividends K35.7 billion (about US $7. 6 million) from Kansanshi Mines, K23.6 billion (about US $5, million) from Konkola Copper Mines, K19.9 billion (about US $4. 2 million) from Chibuluma Mines and K8 billion (about US $1. 6 million) from Copperbelt Energy Corporation.

Other companies in which ZCCM-IH holds a stake include 10 per cent each in Mopani Copper Mines and Chambishi Metals, 15 per cent each in Luanshya Copper Mines and NFC Africa.

And ZCCM-IH said it used US $170 million it got from the sale of 2.28 per cent stake in Equinox Minerals Ltd to invest in new and ongoing mining projects.

"The funds from the sale of shares in Equinox Minerals Limited have since been invested in partly Maamba Collieries Limited as an equity contribution in order to maintain the equity shareholding of ZCCM-IH at 35 per cent," stated company secretary Chabby Chabala.

"Part of the money has also been used as equity contribution to in Konkola North Copper (Konnoco) project which…is a start up copper mining project. ZCCM-IH exercised an option and obtained 20 per cent shareholding in Konnoco, of which five per cent is free-carry while the additional 15 per cent will require that ZCCM-IH contributes cash to the development of the mine. The shareholders agreement, the financing agreements and services agreements relating to Konnoco were signed by ZCCM-IH on 15th September, 2011."

ZCCM-IH stated that it had disbursed a shareholder loan to facilitate the recapitalisation programme for its 100 per cent owned Ndola Lime Company to help lower unit costs of production and strengthen production capacity.

During the same period, the company's operating profit jumped 54 per cent to K785 billion compared to the same period in 2010.

ZCCM-IH which during the year under review made a part payment of US $55 million towards pre-privatisation loans to the government, said it was keenly observing events in the Eurozone.

"Events in the Eurozone are likely to adversely impact global commodity demand and prices," stated ZCCM-IH.

"With lessons from the global financial crisis of 2008, 2009, a number of mining companies have kept a close watch on unit production costs in order to better manage base metal price fluctuations. ZCCM-IH is keenly observing events in the Eurozone and the efforts being made to address them."

Labels: EQUINOX, ZCCM-IH

posted by MrK @ 5:34 PM