STANDARD Bank has provided a US$500m (K2.5 trillion) bridge finance facility to Konkola Copper Mines plc (KCM) that will be used to refinance shareholder loans from parent Vedanta Resources plc.
The bank which operates in Zambia as Stanbic is also mandated to arrange and underwrite a US$700m loan to fund investment that will turn the Zambian copper miner into one of the world’s leading copper producers, and provide further impetus for growth in the Zambian economy.
Standard Bank head of mining, energy and infrastructure finance at Brad Breetzke said in a statement at the weekend that the funding to KCM was the bank’s largest injunction into the Zambian copper roduction. “The investment made by Standard Bank is an illustration of our commitment to KCM and the broader copper region in Zambia.
“Standard Bank has full confidence in KCM management’s ability to drive the company’s growth towards becoming one of the world’s leading copper producers. We are proud to be KCM’s and its parent Vedanta’s financial partner in this process,” Mr Breetzke said. Investments in infrastructure will see KCM produce in excess of 400 000 tonnes of copper per year. The production target will rank KCM as the largest copper producer in Zambia and place it among the top 10 globally.
“This transaction reflects our confidence in the future of the mining industry in Zambia as well as Zambia’s future growth prospects. “In the last 5 years, real GDP in Zambia has expanded by an average of 6% per annum. Even during the Global downturn in 2009 the economy managed to expand by 6.3%, and we expect this trend of robust growth to continue over the next five years,” he said.Mr Breetzke noted that the copper mining was integral to the Zambian economy, although more than 75 per cent of the labourforce was in agriculture.
Despite that, he said, it was copper mining that drives growth noting that in 2009, 83 per cent of exports were accounted for by copper and cobalt, equating to almost 30 per cent of total GDP, an increase from 77 per cent in 2006. Standard Bank, a leading international natural resources bank, has been providing funding and investment support in the Copperbelt for the past decade. Notable transactions in Zambia include acting as lead arranger for funding the development of the Kansanshi Copper Mine in 2003 as wellas for the Lumwana copper mine in 2007.
It is also providing funding to ARM for the development of the Konkola North Copper Project as Stanbic Bank Zambia, its in-country operation, continues to provide the full spectrum of banking products to companies in Zambia. Standard Bank global head of mining & metals, Rajat Kohli concluded that: “This landmark financing event further demonstrates our commitment to natural resources and to Africa. With an outstanding track record of success, we are positioned to continue acting as the financial Ainstitution of choice to the sector on the continent.”
[Times of Zambia]
Just how do you begin to call debt a “windfall”? Please read up before writing headlines that dont make sense!
Kcm will dfntly deliver,its upto the current government to wrk around each situation with these mines!
Exactly why we need windfall tax, make KCM largest producer in Zambia and top 10 in the World, and Zambians ought to benefit. We need a win-win situation period.
I’m not quite sure what you mean about “exactly what we need”. As is clear from the first sentence of the article, this story is about KCM taking on $500m short-term debt, not windfall profits as the headline mistakenly suggests. Probably it would be better to read and understand the issues than to salivate at the prospect of new taxes each time the word windfall is mentioned.
Tamwakwata insoni you predicted that Rupia Banda akawina ama Election.
# 1 peema, u’ve said it all. Thanks!
Ba lt mis leading headline
Wrong Headline! Nothing exciting about a Company becoming highly Geared!! It can work for or against them!! Debt is a double edged sword period!!!!!!!
# 1 walasa,already some cadre is screaming windfall tax.
Who is the numb head at LT who posted this article, please proof read before you post articles and misplace headlines!!
LT contact me for simple lessons on how to read, and correctly interprete! Wrong Headline period.
#4 CC its stanchart Bank that made the predictions. Anyways the article is out of the topic.
@11 anti corruption,ba cc balewela standard chartered bank over their wrong prediction,ala kuti waseka.
very misleading headline.
My thinking is that Vedanta wants to go. If not how then refinance the shareholder loans?? They have seen some risk here but they can go and we can get better players from the SA market.
I agree with # 14, why refinance the shareholder looans???? any our copper is on demend, any chingola is full of indains, let them go