(LUSAKA TIMES) ZCCM-IH to appeal against the Lusaka High Court judgment delivered in favour of First Quantum Minerals
March 31, 2020
ZCCM Investments Holdings Plc (ZCCM-IH) has said that the company intends to appeal against the Ruling of the Lusaka High Court delivered on 23 March 2020 regarding a matter the firm commenced in
2016, against
First Quantum Minerals Limited (FQM Ltd), FQM Finance Limited, Philip Pascall, Arthur Mathias Pascall, Clive Newall, Martin Rowley, and Kansanshi Mining Plc.
In a statement released to the media, ZCCM-IH said that the defendants’ conduct, allegedly, among others, that
the defendants on several occasions fraudulently engaged in transactions totaling in excess of $2 billion for the benefit of the FQM Group, is detrimental to ZCCM-IH’s interests and those of the nation, and remained committed to protecting the said interests, adding that it will be appealing against the Ruling.
In 2016, ZCCM-IH started the process of claiming up to $1.4 billion from First Quantum Minerals Ltd accusing the firm of engaging in fraud. The claim included $228 million in interest on $2.3 billion of loans that ZCCM-IH said First Quantum wrongly borrowed from the Kansanshi copper mine, as well as 20 percent of the principal amount, or $570 million, according to an internal company presentation, dated Nov. 4, 2016.
ZCCM-IH is also seeking $260 million as part of a tax liability the Zambia Revenue Authority said Kansanshi owed it, as well as the cost of the mine borrowing money commercially that ZCCM-IH said could have been avoided.
In papers filed in the Lusaka High Court on Oct. 28 2016, ZCCM-IH said that First Quantum used the money as cheap financing for its other operations.
ZCCM-IH is triple listed on 3 stock exchanges: the Lusaka Securities Exchange (Primary listing) and on the London Stock Exchange and the Euronext Access (Paris – Marche Libre) (Secondary Listings).
Government holds directly 17.25% shares and its 60.28% shares is held through the Industrial development Corporation (IDC) in Zambia, with the remaining 22.47% held by institutional and private individual shareholders.
ZCCM-IH currently has an investment portfolio of 22 companies, including Kansanshi Mining Plc (20%), Mopani Copper Mines Plc (10%) and Konkola Copper Mines Plc (20.6). Its shareholdings in these companies range from 10% to 100%, with commodities and services that are diversified in nature, including copper, gold, cobalt, coal and power, limestone, mining consultancy, financial services and gemstones.
Labels: FQM, KANSANSHI MINING PLC, TAX EVASION, ZCCM-IH
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COMMENT - This is awesome. What happened?
(LUSAKA TIMES) ZCC IH sues FQM claiming $1.4 billion
November 14, 2016
ZCCM Investments Holdings has started the process of claiming up to $1.4 billion from First Quantum Minerals Ltd accusing the firm of engaging in fraud.
The claim includes
$228 million in interest on
$2.3 billion of loans that ZCCM-IH said
First Quantum wrongly borrowed from the Kansanshi copper mine, as well as
20 percent of the principal amount, or $570 million, according to an internal company presentation, dated Nov. 4, obtained by Bloomberg.
The company is also seeking $260 million as part of a tax liability the Zambia Revenue Authority said Kansanshi owed it, as well as
the cost of the mine borrowing money commercially that ZCCM-IH said could have been avoided.
ZCCM-IH said in papers filed in the Lusaka High Court on Oct. 28 that First Quantum used the money as cheap financing for its other operations.
ZCCM-IH also last month filed a notice of arbitration against Kansanshi in London over the same matter.
No figure was mentioned in the court filings.
ZCCM-IH owns 20 percent of Kansanshi.
But in a statement released Monday evening, FQM President Clive Newall said having carefully studied the claims made in both the Notice of Arbitration and Statement of Claim, First Quantum is firmly of the view that the claims are utterly without merit, or indeed any foundation in facts.
“It is notable that the Kansanshi Mining Plc deposits were fully repaid to KMP and were then used to fund a major investment program in Zambia, including the successful construction and commissioning of the Kansanshi smelter and expansion of the processing plant and mining operations.
“On October 28, 2016, KMP also received a Statement of Claim filed in the High Court for Zambia naming additional defendants, including First Quantum, its subsidiary FQM Finance Ltd., and a number of directors and an executive of the named corporate defendants. This dispute arises out of the rate of interest paid on deposits made by KMP with the Company’s financing entity, FQM Finance Ltd. The funds on deposits were retained for planned investment by KMP in Zambia.”
He said, “FQM Finance paid interest on the deposits to KMP based on an assessment of an arms-length fair market rate, which is supported by independent third party analysis. ZCCM disputes that interest rate paid to KMP on the deposits was sufficient. Unfortunately, ZCCM has taken the extra-ordinary additional step of commencing a further action in the High Court for Zambia, making allegations repeated from the Notice of Claim against certain First Quantum directors and an executive that are inflammatory, vexatious and untrue.”
“In fact, KMP is now indebted to FQM Finance for the funding of further investment in Zambia. The Company is currently engaged in constructive discussions with representatives of the Zambian Government, which holds a 92% direct and indirect majority shareholding in ZCCM, with a view to achieving an amicable resolution. We do not believe it is appropriate to comment further on the arbitration or court proceedings while they run their proper course, but we will provide further information as and when required.”
Meanwhile, Philippe Bibard, a spokesman for a minority shareholder group based in France said FQM is disregarding the rights of minority owners in ZCCM-IH in dealing directly with government.
*With Additional Reporting by Bloomberg
Labels: KANSANSHI MINING PLC, KCM, TAX EVASION, TAXATION, ZCCM-IH
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FQM targets 4th largest copper producer slot
By David Chongo in Solwezi
Mon 27 May 2013, 14:00 CAT
FIRST Quantum Minerals is targeting to become the fourth largest copper producer in the world by 2018 with new acquisitions and expansion projects at existing operations, which includes three sites in Zambia.
The mining group, which owns the country's flagship copper mine, Kansanshi Mining Plc in Solwezi, would leapfrog industry giants like BHP Billiton, Anglo-American, Rio Tinto and Vale into fourth position behind leaders Freeport-McMoRan, Glencore Xstrata and Codelco.
Kansanshi Mining Plc acting general manager Alan Delaney says First Quantum Minerals (FQM) has increased its operations and project portfolio to be a global player with a presence in eight European, African, South American countries including Australia.
"Beyond that, First Quantum has diversified globally and now has a presence in Europe (Turkey, Spain and Finland), Australia, South and Central America as well as West Africa," he said. "The acquisition of Inmet Mining and its operating mines and projects, as well as FQM's expansions and new projects within Zambia will make us the fourth largest copper miner in the World by 2018 at current production levels."
Kansanshi Mining, according to Delaney, will play a key role in the process by doubling its production to between 350,000 and 400,000 tonnes of copper per year through expansion of oxide treatment plant and the construction of a new sulphide concentrator plant.
Kansanshi Mining, jointly owned with ZCCM-IH, will also commission a new 1.2 million tonnes smelter by mid next year which will also treat concentrate from the parent company's operations at Sentinel and Enterprise which form the Trident Project that includes Intrepid, west of Solwezi.
Labels: ALAN DELANEY, COPPER, FQM, KANSANSHI MINING PLC
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Solwezi farmers supported by Kansanshi mining double yields
By Vincent Chilikima in Solwezi
Mon 20 May 2013, 14:00 CAT
KANSANSHI agricultural manager Mike Corken says his organisation's dream of improving small-scale farmers' productivity and production has started becoming a reality.
Speaking during a field day held at Solwezi Trades Training Institute, Corken said Solwezi farmers under the support of Kansanshi Conservation Farming Programme had more than doubled their maize yields.
He explained that prior to the intervention of Kansanshi Foundation in 2010, small-scale farmers were producing an average maize yield of 1.2 metric tonnes per hectare but on their first attempt on conservation farming during the 2010/2011 agriculture season, managed to increase their yields up to 2.6 tonnes.
Corken had projected that farmers would, during the current 2012/2013 season increase their maize yield up to four tonnes per hectare, describing the crop stand as good due to the farmers' increased experience and competence in conservation farming.
He said that with time, farmers were expected to increase their maize yield up to seven tonnes per hectare, adding that those who may be willing to step up their fertiliser and lime regime to commercial level may reach up to 14 tonnes per hectare.
Corken explained that Kansanshi Foundation, a Kansanshi Mining department in charge of corporate social responsibility, identified the support to local small-scale sustainable agriculture as a valuable undertaking because farming existed before and shall exist long after the mining activities.
"We had humble beginnings of seven beneficiaries in 2010, increased to 288 in 2011 and to 600 in the current 2012/2013 season. We intend to support 1,500 farmers in the next 2013/2014 agriculture season and continue thereafter increasing the number in every succeeding season," revealed Corken.
He disclosed that each farmer beneficiary receives inputs for an area within a range of 0.5 to one hectare adding that farmers after harvesting and selling their produce return only 30 per cent of the total cost of the inputs.
Corken further disclosed that the conservation farming programme had embraced and subsidised the production of soybeans, groundnuts, sugar-beans and vegetables in addition to maize, providing farmers with inputs that included seed, fertiliser and agriculture lime.
And officiating at the same function, North Western acting provincial agricultural coordinator Derrick Simukanzye described conservation farming as the farmers' 'magic' to success and implored farmers to engage in sustainable practices that would benefit both the current and future generations.
He also commended First Quantum Minerals' Kansanshi Mining Plc for supporting small-scale farmers by establishing a corporate social responsibility programme in the agricultural sector which he said was supplementing the programmes of the Ministry of Agriculture in Solwezi.
Labels: AGRICULTURE, CONTRACT FARMING, KANSANSHI MINING PLC, MIKE CORKEN
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Kansanshi mine demands for $20million from 2 Solwezi residents
TIME PUBLISHED - Tuesday, June 26, 2012, 2:24 pm
KANSANSHI Mining PLC is demanding for US$20 million from two Solwezi residents and others who allegedly incited mine employees to go on an illegal strike which resulted in loss of business.
The $20 million was for damages and loss of business resulting from the four-day alleged premature and illegal strike action early this year.
The mining company has dragged Benson Ngambo, Yobe Banda and others to court demanding for compensation for loss of business which the company endured when the duo allegedly induced and influenced employees to undertake an illegal strike action.
According to a statement of claim filed before the Lusaka High Court, Kansanshi Mining stated that Ngambo, Banda and others allegedly induced, persuaded and procured its employees to breach the contracts of employment by influencing a strike action which resulted in the loss of business.
The company stated that Ngambo, who claimed to have been a representative of Government and Zambia Congress of Trade Unions (ZCTU), together with Banda and others on March 1, 2012 induced Kansanshi mining employees to go on a strike action contrary to the provisions of the Industrial and Labour Relations Act chapter 269 of the Laws of Zambia.
It stated that on the material day, Ngambo addressed the employees and made a call for them to participate in a strike action and picketing around the company premises.
The company said the move taken by Ngambo, Banda and others was a breach of its employees’ employment contracts as the strike was unlawful and illegal.It said the duo and others influenced the employees to physically ban the way of persons and motor vehicles trying to enter and leave the mining area while they intimidated and harassed drivers.
Kansanshi Mining claimed that the striking employees barred heavy duty vehicles loaded with various merchandise from delivering in and out of the mining area, a move that caused lossof business not only to it but third parties as well.
It stated that because of the same, Kansanshi Mining lost approximately $5 million per day in revenue.
The company, which had initially jointly sued 14 of its former employees and later filed a notice of discontinuation against them, had also sought an injunction restraining further striking, which was granted.
The matter is being handled by High Court Judge Dominic Sichinga who has set September 20, 2012 as the date for commencement of trial.
[Times of Zambia]
Labels: KANSANSHI MINING PLC, STRIKE, ZCTU
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Mushala awaits official complaints from Kansanshi laid off miners
By Moses Kuwema
Fri 30 Mar. 2012, 12:57 CAT
BERT Mushala says he has only received one complaint of a miner who has been laid off for taking part in the strike action early this month at Kansanshi Mining Plc in Solwezi.
Commenting on complaints of witch-hunt by some miners following the strike action that paralysed operations and resulted in a $25 million loss, Mushala said he was still waiting for other miners that were laid off to approach him.
"I have heard of that complaint laying off and I have only seen one letter which indicated that the gentleman had been laid off for participating in the strike action. However, I did request to get the full detailed information of how many have been laid off because of the outcome of the strike action. So we are waiting for those that are affected to approach our office. As soon as we know those that are affected, we will engage Kansanshi Mining Plc and so far they also understand and I trust and believe that they will understand so that we can reach an amicable solution," Mushala, who is permanent secretary of the province, said.
Mushala further advised the affected miners to also make their complaints known to the Ministry of Information, Broadcasting and Labour through the labour officer.
"When they raise these complaints with our labour officer, the labour officer will immediately come and inform us. We are all government. We will see how we can resolve the issue amicably, looking at the pros and cons of the scenario and what caused it, before we even interact with both the union and the management of the mine," he said.
Kansanshi miners recently revealed that their management had allegedly prepared close to 100 letters on charges related to the strike action for employees in the processing, engineering, information technology as well as production sections.
According to the letters sent to affected miners by human resource manager Linda Mambwe, Kansanshi laid off some employees pending disciplinary hearing on charges related to the strike action blamed on delayed negotiations for the 2012 Collective Agreement which has since been referred to the Industrial Relations Court.
Labels: BERT MUSHALA, KANSANSHI MINING PLC, LABOUR, MINING
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Unions take Kansanshi, FQM to Industrial Relations Court
By Misheck Wangwe in Kitwe
Sun 18 Mar. 2012, 11:57 CAT
THE Mineworkers Union of Zambia and the National Union of Miners and Allied Workers have taken the failed 2012 salary negotiations with Kansanshi Mine and First Quantum Minerals Operation Limited to the Industrial Relations Court.
And the unions say President Michael Sata must do everything possible within his powers to resolve the impasse between workers and managements of Kansanshi and FQMOL which would negatively result in the mineworkers not receiving their deserved and agreed items, including salaries.
The MUZ and NUMAW a fortnight ago reached a deadlock with managements of both Kansanshi and FQMO over the 2012 negotiations for a pay rise.
At a joint press briefing in Kitwe on Friday, MUZ acting president Charles Mukuka said in terms of the provisions of the industrial and labour relations Act on the settlement of collective dispute, the parties to the dispute took the inevitable action of taking the process to another level.
"The matter is now proceeding to the Industrial Relations Court for adjudication, now that the mediation process still leaves the parties to the dispute apart. We would like to appeal for calm and commitment to duty, now that the process has entered an untouched territory in terms of our recent history in industrial relations," Mukuka said.
He said in a memorandum of understanding signed, Kansanshi Mine management, among other things, conceded to consider permanent employment and to work towards working out modalities of implementing the decision.
Mukuka said in subsequent joint industrial council meetings, management had informed the unions that the board met and could not make a decision on permanent and pensionable employment and proposed to defer the issue and effectively meant it falling off the 2012 collective agreement.
He said in the case of FQMO, there were disagreements on the tenure of the collective agreement from one to two years, adding that the parties in their rounds of negotiations made progress on a number of items, except on salaries.
"We would like to remind our members and the nation that in 2008, the Unions, MUZ and NUMAW, reached a similar impasse. The actions of management then was to entice our members with money to withdraw from the two unions.
That episode was painful to the unions and the members," he said.
Mukuka said it was distressing that managements at Kansanshi and FQMO had refused to accept the amicable way of resolving the impasse and subsequently implement the items in the 2012 collective agreement.
And Mukuka said President Sata and his government must take action and help the unions to get a better deal through collective agreements.
He said the Minister of Labour, Fackson Shamenda, was empowered in the industrial and labour relations Act to intervene even at the last and inevitable hour of the matter.
Mukuka said Kansanshi and FQMO were key drivers in the mining industry and "the unfortunate developments of deadlocks and misunderstandings should not be allowed to derail the country's march to mining growth and expansion…"
Labels: FIRST QUANTUM MINING, KANSANSHI MINING PLC, MICHAEL SATA, SALARIES
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Kansanshi loses $25 million in strike
TIME PUBLISHED - Tuesday, March 6, 2012, 8:56 am
First Quantum Minerals
FIRST Quantum Minerals Limited says the company has lost over US$25 million in revenue through the five-day strike action by miners who were demanding improved conditions of service. The mine says the company has been losing US$5 million per day in revenue and in excess of US$1.5 million per day in taxes to government.
“Management reiterates its regret that the illegal work stoppage has caused great losses to the Zambian economy. These losses have an adverse effect on all stakeholders, employees, government and all Zambians,” the mining giant said in statement released yesterday.
The statement says management is committed to ensuring a speedy resolution of the dispute with unions and has initiated the required process provided for by the laws of Zambia.
The company has urged everyone to remain calm and exercise restraint to allow for the dispute to be decided by competent authorities.
“We request that the union recognises the due legal process and encouraged its members to return to work,” the company said. The company warned employees of disciplinary action.
The company also warned that management will ensure that legal and civil action is taken against anyone who engages in acts of intimidation or who willfully encourages or exacerbates the initiation or extension of work stoppage.
First Quantum Minerals Limited are the owners of Kansanshi Copper and Gold Mine in Solwezi, the biggest copper producer in the country. Miners at the mine have been on strike, which entered its fifth day yesterday.
[Zambia Daily Mail]
Labels: KANSANSHI MINING PLC, MINING, STRIKE
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Government writes chief Kapijimpanga over business agreements
By Moses Kuwema
Mon 05 Mar. 2012, 11:57 CAT
MINISTRY of Chief and Traditional Affairs permanent secretary Coillard Chibbonta has written to chief Kapijimpanga to suspend the signing of any agreements on behalf of the chiefdom because his legitimacy as chief is in dispute.
Chibbonta's letter comes in the wake of Kansanshi Mining Plc's agreement with chief Kapijimpanga to launch the K235.4 billion housing project of staff members of the mining firm in Solwezi.
In his letter addressed to chief Kapijimpanga and Kansanshi Mining Plc general manager, Chibbonta advised that any business with chief Kapijimpanga could only be conducted once the judiciary had dispensed the court action.
He advised that all potential investment projects and agreement negotiations with the sitting chief Kapijimpanga would be null and void after the June 12, 2012 court judgment.
There is a contention in chief Kapijimpanga's chiefdom as the legitimacy of the current chief Kilolo Ngambi was in dispute.
The contesting group had written to President Michael Sata seeking his indulgence in the matter following an agreement that the current chief Kapijimpanga signed with Kansanshi Mines to build houses for its staff under the Kabitaka housing project in Solwezi.
Labels: CHIEF KAPIJIMPANGA, CHIEFS, COILLARD CHIBBONTA, KANSANSHI MINING PLC
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Employees fear for their fertility after by being subjected to infra-red searches every day
TIME PUBLISHED - Sunday, January 8, 2012, 10:15 pm
EMPLOYEES at Kansanshi Mining Plc who are involved in the production of gold fear that their fertility could be affected by the rigorous infra-red searches they are subjected to every day.
The employees, who did not want to be named, said they are worried that their reproductive systems are under threat because of the unwarranted searches which expose them to radiation.
“We are subjected to searches almost every hour. There are always fears we can steal gold from the plant, so they search us several times,” one miner said.
They complained that even when miners go to answer the call of nature, they are exposed to an infra-red search on all parts of the body.
The workers, who have appealed to Labour Minister Fackson Shamenda to look into their plight, said some categories of workers are not searched or exposed to infra-red radiation.
The gold production unit is kept sacred and no dignitaries or government officials are allowed to tour it, one worker said.
And Government will soon carry out a labour audit on companies which have hired expatriates, to reconfirm the relevance of giving expatriates certain jobs, Labour, Youth and Sport Minister Fackson Shamenda said in Solwezi at the weekend.
The audit is aimed at establishing the qualifications and jobs that expatriates hold.
Mr Shamenda, Vice-President Guy Scott, Foreign Affairs Minister Chishimba Kambwili and Minister of Mines Wybur Simuusa were in Solwezi to ask miners at Kansanshi Mine to return to work after a wildcat strike.
The miners complained that there is a huge gap in conditions of service between them and expatriates.
“We will verify their qualifications and check if the qualifications and skills match,” he said.
Mr Shamenda said Zambia has many qualified professionals who can take up jobs that have been given to expatriates, especially in the mining industry.
HE said his ministry will soon set up a database of workers to ensure that only qualified expatriates are allowed to work in the country.
Mr Shamenda also said there are ‘very serious’ salary disparities between management and unionised workers in most companies in the country.
“The audit will ensure that expatriates doing jobs that Zambians can do are sent away to pave way for locals,” he said.
Mr Shamenda also said the ministry of labour will engage qualified Zambians, including those in the diaspora, to take up jobs that will be left by some expatriates who are not qualified.
He also said that government will not tolerate any investors abusing Zambian workers.
Mr Shamenda also bemoaned the high levels of casualisation of labour in mining companies, saying the Ministry of Labour will review labour laws to resolve the problem.
[Zambia Daily Mail]
Labels: CASUALISATION, FACKSON SHAMENDA, HEALTHCARE, KANSANSHI MINING PLC, SAFETY
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Zambians shouldn't be taken for granted - Scott
By Roy Habaalu
Sun 08 Jan. 2012, 14:00 CAT
VICE-President Guy Scott says Zambians should not be taken for granted. Speaking after a 30-minute closed door meeting with unions representatives and Kansanshi Mine management in Solwezi on Friday, Dr Scott said his appointment as Vice-President showed that Zambians could not be taken for granted.
"That's reason why they (Zambians) made a muzungu Vice-President, it sends a message that you Zambians cannot be taken for granted," he said.
Briefing journalists after the meeting, Vice-President Scott said the management system at Kansanshi had broken down and urged management to reorganise itself.
Vice-President Scott, however, did not elaborate further the outcome of the meeting which was called to discuss workers' concerns over salaries and working conditions at Kansanshi Mine.
Kansanshi Mine is Zambia's largest producer of copper. It is majority owned by First Quantum Minerals while the Zambian government has retained 20 per cent shareholding in the mine.
Over 50 miners at the mine last week went on strike, demanding 100 per cent salary increase and other improved conditions of service.
They also demanded, among other things, the removal of some senior managers including public relations manager Godfrey Msiska.
Just after a closed-door meeting, foreign affairs minister Chishimba Kambwili warned Msiska of dismissal.
Meanwhile, Vice-President Scott, in an interview, said former MMD ministers under probe should know that times have changed.
Vice-president Scott said the government would continue investigating anyone alleged to have stolen public resources until they were recovered.
"I am warning them (MMD officials) that times have changed. In some cases some South African companies were donating bicycles to MMD so we have to keep investigating. Who knew we would find K2 billion buried?" asked Vice-President Scott.
"Some of them (investors) were making donations to the MMD in return for contracts, especially the Chinese. In some cases, they inflated contract prices so the investigations will continue until we are satisfied."
On foreign investment, Vice-President Scott said the PF government is investor friendly and expected investors to respect ordinary Zambians.
He said the PF government would not forget the poor and ordinary Zambians like the MMD did in 20 years of being in power.
"We're concerned because the MMD slipped into a disorderly situation.
They were only oiling their wheels without respect for unions and workers. Poor people remind us that they hired us to work for them," said Vice-President Scott.
Labels: GODFREY MSISKA, GUY SCOTT, KANSANSHI MINING PLC, LABOUR
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Kansanshi mine strike is illegal says FQM
TIME PUBLISHED - Wednesday, January 4, 2012, 2:32 pm
First Quantum Minerals says the strike action by miners at its Kansanshi mine in Solwezi is illegal.
Workers at the Kansanshi mine, Zambia’s largest copper mine which produced 231,000 tonnes of the red metal in 2010, downed tools on Tuesday demanding 100 percent pay rises and bringing production to a halt.
Company spokesperson Godfrey Msiska says there was no deadlock reached and as far as the management is concerned the strike is illegal.
He confirmed that the strike action by the workers has entered the second day today, with workers blocking the gate to the mine plant.
Mr Msiska has appealed to union officials to convince the workers to go back to work so that negotiations, which had been suspended because of the strike, could resume.
[Reuters]
Labels: FIRST QUANTUM MINING, GODFREY MSISKA, KANSANSHI MINING PLC, MINING, STRIKE
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COMMENT - If FQM rehabilitated Chingola-Solwezi road, and it's trucks use that same road, it is just a business expense. Also, does this 'K8 billion' include the taxes that their workers pay on their incomes (PAYE)? If so, those are not taxes paid by FQM, any more than taxes paid by copper buyers are paid by FQM or anyone else.
Kansanshi pays about K8bn in taxes daily - Gen Chinkuli
By Bright Mukwasa
Wed 28 Dec. 2011, 13:20 CAT
KANSANSHI Mine pays about K8 billion in various taxes to the Treasury on a daily basis, says First Quantum Minerals country manager General Kingsley Chinkuli. And First Quantum Minerals has spent about K23 billion for the rehabilitation of the Chingola-Solwezi road.
Speaking when he, together with Kansanshi Mine public relations manager Godfrey Msiska, toured The Post Newspapers offices in Lusaka on Friday, Gen Chinkuli said his company had to date paid up to K8 trillion in various taxes to the government since attaining a taxpaying position over five years ago.
"The projections were that we will make profits after five years, but we did that in 18 months and immediately started paying taxes. We have so far paid US$1.6 billion (about K8 trillion) to date," Gen Chinkuli said.
He said the company had an ambitious expansion drive that could see many young people given a chance to be employed in the next few years.
"First Quantum is a homegrown company and its operation has made a significant contribution to the people of Solwezi. We have a workforce of approximately 1,300, plus the sub-contractors," Gen Chinkuli said.
He also observed that the view that mining companies were not contributing much to the communities they operated in was a debate that could be allowed for people to suggest which areas the companies could contribute development to.
General Chinkuli also said he was hopeful that relevant authorities would work to develop infrastructure in Solwezi that could accommodate the pressure that has been brought as a result of expanding industrial base in the province and Solwezi in particular.
And Kansanshi Mine has set aside about K35 billion for the upgrading of the Solwezi Airport to international standards.
Kansanshi Mine public relations manager Godfrey Msiska said the company was currently involved in community development projects such as the training of youth in various skills.
"We have plans to turn Solwezi airport into an international airport. We're currently upgrading the runway to a level where it can handle a Boeing 737 and for that project we have budgeted K35 billion for the upgrade of the runway," Msiska said. "Of course we expect government and other stakeholders to come in."
He said the mine had also invested in the upgrade of Solwezi General Hospital, a project that would cost K11 billion.
"We have projected to spend about K30 billion on health, social welfare and infrastructure development like the maintenance of Chingola-Solwezi road. We have spent K23 billion on maintaining this road. For instance the Kibombenene area, the road was totally eaten up, but we have put a bridge and culverts," said Msiska.
Kansanshi mine, the largest copper mine in Africa, is 80 per cent owned by Kansanshi Mining PLC, a First Quantum subsidiary while the remaining 20 per cent is owned by a subsidiary of ZCCM. First Quantum bought Kansanshi Mine from Phelps Dodge in 2001. It started production in 2005, and soon afterwards made profits and begun paying taxes to the government. To date, Kansanshi is the only company that pays dividends to the government for the 20 per cent shareholding held via ZCCM-IH.
Labels: FIRST QUANTUM MINING, KANSANSHI MINING PLC, TAXATION
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Kavindele opposes ZCCM-IH investment plan
By Chiwoyu Sinyangwe
Wed 12 May 2010, 04:00 CAT
ENOCH Kavindele has strongly opposed ZCCM Investment Holdings (ZCCM-IH)’s plans to invest dividends from Kansanshi Mines to
develop agriculture in Central and Copperbelt provinces, insisting that the money be taken to
develop North Western Province.
On Monday, First Quantum Minerals (FQM), the owners of Kansanshi Mining Plc presented a dividend cheque of US $18.1 million to ZCCM-IH. During the handover ceremony, ZCCM-IH board chairman Alfred 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.
But Kavindele, who is former Vice-President, said there was no way the resources of North Western Province could be used to develop other regions when it also required development.
Kavindele said even if the province was endowed with natural resources, the region equally boasted of strong potential in agriculture development where ZCCM–IH was attempting to diversify its investments into.
“If ZCCM–IH is interested in developing agriculture, two royal highnesses there… chief Kalilele and senior chief Mujimanzovu has surrendered a total of 200,000 hectares of traditional land to the government. So, what ZCCM –IH want to do in other provinces should be replicated in North Western Province because the land is available and we have abundant water resources.”
Kavindele said there was no way North Western Province could cede its resources to the development of other provinces.
Kavindele likened the intention by ZCCM–IH to history repeating itself when proceeds from Zambia copper mines were used to develop other countries at its expense.
“This money has been made in North Western in a place like Solwezi which is in a hurry to see development, so it’s important that ZCCM-IH should also invest where the money is coming from,” he said as he praised FQM for declaring dividend to ZCCM-IH.
“We can’t accept to go back to the federal government The Federation of Rhodesia and Nyasaland where copper mining in Zambia went to develop other capitals. We don’t want the question of history repeating itself.
Kavindele called for the establishment of a fully-fledged university in North Western Province.
“We should enjoy our resources…it’s our birthright and we are also in a hurry to develop,” said Kavindele. “ZCCM–IH should participate in the establishment of a university in Solwezi. We would like to build a university in Solwezi where chief Mumena provided land to government a long time…during the First Republic and this land is still available and that university should be developed as a matter of urgency.”
Kavindele praised FQM for declaring the dividend and at the same time, urged other mining companies to emulate.
“FQM has shown us that Kansanshi privatisation was successful and in fact, there efforts to create employment can be greatly supplemented if ZCCM-IH invested the dividends back into North Western Province, said Kavindele.
Labels: CORRUPTION, ENOCH KAVINDELE, KANSANSHI MINING PLC, ZCCM-IH
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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
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Kansanshi launches K200m community project
By David Chongo in Solwezi
Mon 03 May 2010, 22:40 CAT
KANSANSHI Mine has launched a K200 million poultry, irrigated vegetable and fish farming community empowerment project under parent company First Quantum Minerals Group’s corporate social responsibility programme.
Releasing details of the initiative in a statement to The Post in Solwezi, Kansanshi public relations manager Godfrey Msiska said the project was targeted at creating income generating activities for the surrounding Kyafukuma community near the mine.
He said the three-phase programme was aimed at not only creating employment for the local community but also enriching the environment and communities in which Kansanshi Mine operates.
Msiska said the projected amount in the exercise included the cost of rehabilitating old existing infrastructure, maintenance works, construction of new buildings, training and purchase of materials and livestock.
“Kansanshi will provide funding to meet the cost of rehabilitating the existing infrastructure such as the canals. The vegetable-farming project will entail the setting up of an irrigation system to tap water from one of the rivers in Kyafukuma, so that the community can grow vegetables all year round.
The budget on this project also covers training of the community in appropriate and sound training in fish farming, purchase of 11,000 fingerlings and start-up feeds… chicks, medicines, chicken feed, drinkers, feeders, doors, lamps and charcoal; all the inputs for vegetable growing which include fertilisers, seeds, pesticides and fungicides, spray pumps and other similar implements,” he said.
“A number of residents will be employed as brick layers, supervisors and labourers during construction of the irrigation system. Labour alone will gobble up K30m of the K84m earmarked for the irrigation project. These projects will not only create employment for the Kyafukuma community, but will also provide them with a source of sustainable income which should, in turn, spur them to create their own wealth.”
He hoped that the community in Kyafukuma would regenerate the investment and set up a revolving enterprise in capacity building and cater for some foodstuff needs of the province.
Beside the K84 million set for irrigated farming in the K200 million funding, K49 million would go into poultry farming and K67 million toward fish farming.
The project, in which Kansanshi is has received technical assistance from the district veterinary, fisheries and agricultural offices, follows the mine’s promotion of the jatropha out-grower programme in Kabwela and Mushitala and the bee keeping project in Mutanda.
Labels: FIRST QUANTUM MINING, GODFREY MSISKA, KANSANSHI MINING PLC, TAXATION
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Kansanshi aims to produce 244,000 tons of copper
By Chiwoyu Sinyangwe
Wed 30 Dec. 2009, 04:00 CAT
KANSANSHI Mining Plc, the only foreign owned mine paying tax to the government, has said it is on course to produce the targeted 244,000 tonnes of copper this year.
According to environment manager, Richard Zyambo, Kansanshi Mining Plc, a unit of Canada's First Quantum Minerals, increased output by 19 per cent in the third quarter of this year compared to 15 per cent during the same period last year.
“In the third quarter, the company recorded production levels amounting to 61,300 tonnes whilst the same period in 2008 had recorded 53,000,” Zyambo told a stakeholders’ meeting held in Solwezi.
“With the current levels of production, it is envisaged that the company will reach the expected tonnage for 2009 which is at 244,000.”
Zyambo said the increase in production came after Kansanshi Mining Plc cut production costs at the mine.
“During the same period, the average cost of production decreased by 28 per cent in comparison to quarter three of 2008,” stated Zyambo. “This was attributed to the cost saving initiatives implemented in quarter four of 2008 and lower oil and sulphur prices.”
Copper mining is Zambia’s economic mainstay and the copper and cobalt producers are a major employer in the country.
Other foreign mining companies operating in Zambia include London-listed Vedanta Resources Plc, Equinox Minerals, Glencore International AG of Switzerland and Metorex of South Africa and the growing Chinese influence.
Labels: COPPER, KANSANSHI MINING PLC
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Seek election as ward councillor before presidency, Kunda urges HH
By Mutuna Chanda in Solwezi
Wed 11 Nov. 2009, 04:01 CAT
VICE-PRESIDENT George Kunda has said UPND leader Hakainde Hichilema should seek election as a ward councillor before gunning for the presidency. And North Western Province minister Joseph Mulyata has attacked Kansanshi Mine that it has employed PF cadres instead of locals.
Meanwhile, MMD Kamalamba ward councillor Emmanuel Chihili blamed the poor attendance of the rally that Vice-President Kunda addressed on farming activities that Kyafukuma residents had gone to attend to.
Addressing a poorly-attended rally at Kyafukuma Basic School which was attended predominantly by children, some clad in school uniforms, Vice-President Kunda said Hichilema's insatiable appetite for power had led him into a very dangerous alliance with PF leader Michael Sata.
"Mr Hichilema has been losing elections, every presidential election he stands and he has been losing," Vice-President Kunda said. "He's a young man but the problem with him is he's in a hurry to go to State House and his political strategy amuses me. …For example, when I qualified as a lawyer, I went to work for the Luanshya Municipal Council and I know how the local government system works and I have been moving eh!
Ask other ministers, this is how we move, some start as MPs members of parliament then you start moving, learning politics. Him, he should first start as a councillor, from there as an MP, from MP he can become a minister like that but him the only thing he thinks about is to be President. Now because he is panicking and because of his insatiable appetite for power, he has now made a very fatal mistake; he has gone into a very dangerous arrangement with a very poisonous and dangerous snake. This snake is Mr Sata."
He said Hichilema mistakenly thought that Sata was popular and that he would bring him into government once he won the elections.
He charged that Sata had lost ground.
"Even Northern Province where he claims to have support where he was campaigning on tribal lines in Kasama, we have 11 MPs meaning that a lot of people even in Northern Province they do not vote for Mr Sata because he has a lot of weaknesses, for example he's a very violent man," he said.
"The whole of Luapula Province is drifting away from Mr Sata. In Central Province many voters do not vote for Mr Sata..."
And Mulyata put Vice-President Kunda in an awkward position when he accused Kansanshi Mine of employing PF cadres.
Mulyata said instead of employing locals, Kansanshi Mine employed PF cadres and yet the government did not discriminate when employing people.
"This is Kansanshi and even Kansanshi Mine are not employing MMD, they are employing PF," Mulyata said.
"We are not going to allow such a situation, you are the nearest people here, we want you to be employed. When government employs, it does not only employ teachers from MMD...but they just employ PF, is that in order? That Kansanshi is in Solwezi. Solwezi mabwetu so the first people to be employed are Solwezians. We are going to talk to them because each one of us should get equal treatment."
Vice-President Kunda in response instead spoke of the good corporate governance and social responsibility that companies were supposed to abide by.
"Now about the issue of jobs at Kansanshi; it is part of our laws that investors who are coming to Zambia should practice good corporate governance and they should put into practice corporate social responsibility by looking after the local people, building infrastructure such as schools by way of helping the local people building of health centres and where the local people have problems try to help them, avoid pollution.
There are certain simple things which the company which is running Kansanshi Mine can help the communities here. These companies should not only make money but they should give a bit of what they are getting from the community back to the community, that is good corporate governance and good corporate social responsibility," said Vice-President Kunda.
And community development deputy minister Moses Muteteka warned civil servants against undermining government programmes.
He said the consequences for civil servants who were discovered to work against the government would be harsh.
Meanwhile, Chihili gave an excuse that the rally was poorly attended because many Kyafukuma residents had gone to their fields to cultivate.
He said Kyafukuma residents were very productive and had gone to their fields hence their non-attendance.
However, Chihili complained of the poor state of the road that led from Kyafukuma to the town centre.
He said the only source of water that residents in Kyafukuma had was at the clinic and that people from far flung areas had to make way to draw the commodity for domestic use.
He said many of the wells because of the activities in Kansanshi were drying up as the water table had been affected.
He said local farmers had not benefitted from the Fertiliser Support Programme.
Chihili said people from far-flung areas were serviced by one health centre at Kyafukuma.
MMD candidate Albert Chifita asked Kyafukuma residents for forgiveness if he had wronged them in any way.
He appealed to residents of Kyafukuma to vote for him on November 19.
Chifita is running against independent candidate Thomas Kafula, Watson Lumba of the PF and UPND pact and Forum for Democratic Alternatives' Muhammad Kalela.
At another rally at Tuvwang'anai Basic School in Solwezi on Monday, Vice-President Kunda said Sata had no credibility.
He said the PF lost in the Chitambo parliamentary by-election because its leader insulted people all over the shore.
"He's exporting to Solwezi and North Western Province, violence," Vice-President Kunda said. "He's a violent man. They've injured people here in Solwezi. We reject violence. MMD stands for peace."
He said Hichilema mistakenly thought that he could ride on Sata's popularity and yet the man was a spent force in North Western Province.
He said Sata was losing grip of areas that he traditionally had support in areas such as Luapula Province.
Vice-President Kunda congratulated residents of North Western Province for their enterprise and said that a lot had changed since 1976 when he first came to Solwezi for his national service training through to 2001 when he used to represent clients in the area through his law practice.
He said Zambians had built many lodges.
He encouraged residents of North Western Province to work hard in agriculture and that the government would provide the fertiliser that they needed.
"I like the Solwezi beans which is unique to Solwezi," remarked Vice-President Kunda.
He said the country was prospecting for oil in North Western Province and that Solwezi airport shall soon be expanded.
He urged Solwezi Central voters to vote for Chifita who would continue with the development projects that the government had embarked on in the area.
MMD deputy national secretary Jeff Kaande said UPND leader Hakainde Hichilema could not think as evidenced by his canvassing for support for Sata.
Kaande said Hichilema had brought Sata to North Western Province who insulted the people of that area.
Health minister Kapembwa Simbao who is in the Vice-President's delegation told Solwezi residents that the government had provided drugs to hospitals throughout this year and that it was not true that there were no medicines in public hospitals.
“I hear in Solwezi you are provided with prescriptions, I can't accept that,” Simbao said. “We have provided drugs throughout the year. I have been to Kyafukuma and they have drugs and the main hospital they have drugs. I want this talk of no drugs to stop! Solwezi General Hospital is the only second level hospital with 21 doctors. You can pick up the phone and call Kasama, Mbala you'll be surprised if they even have five doctors.”
Muteteka said the government's investment in Solwezi could only be protected if Solwezi Central residents voted for Chifita.
And communications minister Professor Geoffrey Lungwangwa said only the MMD had a development programme for Solwezi residents.
Prof Lungwangwa who is also former education minister said the government was aware of the congestion among pupils in schools such as Tuvwang'anai but that it was constructing new ones to decongest the existing ones.
Labels: CADRES, GEORGE KUNDA, HAKAINDE HICHILEMA, KANSANSHI MINING PLC
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COMMENT - I think a couple of hundred million dollars in taxes have gone missing.
‘Only Kansanshi Mine is able to pay normal taxes’
By Chiwoyu Sinyangwe
Tue 27 Oct. 2009, 04:01 CAT
KANSANSHI Copper Mine is the only mine in the country in a position to pay normal taxes, finance minister Dr Situmbeko Musokotwane said yesterday as parliamentarians reiterated calls for the restoration of the abolished windfall taxes regime.
And Zambia Revenue Authority (ZRA) commissioner general Chriticles Mwansa said the expected revenue earnings from the variable profit tax in the mining sector had not yet been determined.
Appearing before the expanded parliamentary committee on estimates, Dr Musokotwane said all mining companies with the exception of Kansanshi Copper Mine were
not in a position to pay normal taxes as they were still paying back the startup loans or were expanding their projects.
Dr Musokotwane said the government would be in a position to collect money from the mining companies once they started making profits after repayment loans for their invested capital.
He said the current regime governing the mining sector favoured increasing attraction of investments into the country’s main economic stay than to “kill the cow before it starts producing milk.”
“If we force them mining companies to pay by getting taxes when they are not in the position to do so, the incentive for them to expand their operations will be killed,” Dr Musokotwane told parliamentarians.
“The reason for the revenue not coming from the mining companies is that we recognise that we have to allow them to recover the losses because they spent money to bring in equipment, things like hiring staff which all went up with the recent high international metal prices…so, we allow the companies to write-off losses against profits. I believe that at the moment, only First Quantum Minerals who operates Kansanshi has exhausted the right of that period to pay back the loans and are now in a position to pay normal taxes.”
And Mwansa said ZRA was currently working on modalities of estimating the revenue earnings from the mining sector including the variable profit tax.
Mwansa said the revenue could not be pronounced in the just-released national budget for 2010 as the country’s revenue authority had not yet finished auditing the mining companies. He said ZRA was expected to complete the auditing by next year.
“…But you need to have trust in the institutions entrusted with this responsibility because we have the qualified staff whose ability has been enhanced over the years,” said Mwansa, adding that ZRA’s ability to track revenue from the mining sector went beyond the Zambia’s frontiers as provided for in the revenue’s Act.
Earlier, the parliamentarians complained that mining companies had continued to reap at the expense of the country following the abolishment of the popular windfall tax.
Luapula member of parliament Peter Machungwa said while it was acceptable for new mining projects like Lumwana Copper Mine to be given tax breaks, most investors like Vedanta Resources needed to pay normal taxes as they took over already developed mines.
“Even talking about waiting before starting to milk the cow…you find the cow will keep getting fatter while the country disintegrates,” said Machungwa.
At the height of the copper boom, the Zambian government introduced a new mining fiscal regime which aimed to increase revenue earnings from the country’s lifeblood with last year’s projection estimated at US $415 million.
Labels: CHRITICLES MWANSA, KANSANSHI MINING PLC, PARLIAMENTARY ESTIMATES COMMITTEE, SITUMBEKO MUSOKOTWANE, TAXATION
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Kansanshi Copper Mining increases production by 16%
Written by Mulimbi Mulaliki in Solwezi
Thursday, July 16, 2009 5:06:12 AM
KANSANSHI Copper Mining Plc's copper production has increased by 16 per cent in the first quarter and is expected to meet the production target for this year. And the mine achieved one million fatality free shifts from December last year.
Presenting a report of operations of the mine for the past six months to stakeholders at Floriana Lodge in Solwezi, Kansanshi Mine environmental manager Richard Zyambo said the increase in production was as a result of the sulphide circuit expansion which was commissioned last year.
"The First Quantum Group continued to weather the effects of the global meltdown. In the first quarter of the year leading indicators indicated that the rate of the weakening of the global economy might be slowing. However there was no consensus on the timing for a sustained improvement in the economic conditions," he said. "The copper price on the London Metal Exchange (LME) has recovered since December 31, 2008 with the price increasing to $2.10 per pound as at May 12, 2009. However, uncertainty remains in the future."
Zyambo said the increase in copper production to 60,838 tonnes in the first quarter of 2009 was as a result of the sulphide circuit expansion, which was commissioned last year.
He added that the cathode production was now at maximum following the completion of the fourth electro-winning tank-house and installation of the transformer required to bring the section to nameplate capacity.
"The production of the second quarter is likely to meet the budget projection," he said.
Zyambo disclosed that copper production last year was 215,300 tonnes and production for this year was expected to reach 244,000 and indicators were that the company would meet the target.
"The environmental and social management plans have been prepared in accordance with the environmental regulations of Zambia and are in line with ISO 14001 requirements" he said. "Monitoring on monthly basis is carried out on all major streams - Kansanshi, Kifubwa and Solwezi rivers. Results of this monitoring exercise are sent to the department of water affairs right here in Solwezi."
He stated that for the past six months, the mine had remained compliant with statutory requirements adding that monitoring of air quality had also continued.
"The company has continued to work as safely as possible and you might want to know that in December 2008, the mine achieved 1,000,000 fatality free shifts and the goal was to achieve 2,000,000 fatality free shifts. I am however sad to report that on Thursday July 9, 2009, this record we were aiming at was sadly interrupted when the mine recorded a fatality," said Zyambo.
Labels: COPPER, KANSANSHI MINING PLC
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