It is with interest that we learned of the public discussion at Hotel Edinburgh in Kitwe where the Chairperson of the select committee appointed to negotiate the sale of Konkola Copper Mines, Anthony Mumba, spoke. We welcome his knowledge and insight into the unfair and outrageous situation in the
mining sector, proving that he is the right man for the job to defend the interests of the Zambian People and the shareholders of ZCCM-IH.
Mr Mumba questioned whether foreign loss-making mining companies could make offers to take over KCM. He made proposals for mining to finally benefit Zambians, including by giving 30% of all contracts and deals to Zambian companies.
Following his intervention, the Zambia Chamber of Mines president Goodwell Mateyo castigated his proposals and stated untruths that we wish to correct.
In order to scare the Zambian people, Goodwell Mateyo states a far-fetched $5 billion for compensation to increase the stakes in all mines to 30%. The value of an asset is linked to the profits it generates.How is it possible that mines that have been losing money for years can be worth hundreds of millions of dollars?
By reading the books of ZCCM-IH in the year ended 31 March 2018, we obtain the latest official values of some symptomatic mines at fair value :
- 10% Mopani: K223,518,000 (around $17,000,000)
- 15% Chibuluma: K16,033,000 ( $1,300,000)
- 10% Chambishi Metals: K11,900,000 ($900,000)
- 15% NFC Africa Mines: K320,049,000 ($24,000,000)
That is why we challenge Goodwell Mateyo to detail his $5 billion astronomical sum. His example for the Kansanshi mine is particularly staggering. His valuation of $8.5 billion is stated without any explanation. According to him, the additional 10% to be repurchased would be valued at $850 million.
A few months ago, rumours had circulated that First Quantum Minerals has proposed to buy back the 20% Kansanshi shares of ZCCM-IH for $700 million.
We deduce from this, that mining companies would offer peanuts to buy ZCCM-IH’s mining interests while Zambians would have to compensate them at the high price to increase the same stakes in all mines to 30%!
Goodwell Mateyo said that “the biggest stake in mines in Zambia is actually owned by ZCCM-IH”. This is not true because the main beneficiary of the Zambian copper is by far First Quantum Minerals, which owns 80% of the Kansanshi mine, 100% of Sentinel and 16.9% of Mopani. The annual copper production in
2018 from these mines is 199,626t (100%: 249,532t), 223,655t and 10,510t (100% 62,191t) respectively,for a total of 433,791t. According to official data, Zambia’s 2018 annual copper production amounts to 861.946t, the equivalent production of FQM represents 50.3% of Zambian copper production, Barrick Gold
11.8%, ZCCM-IH 11.2%, Vedanta 8.6%, CNMC 8.3%, Glencore 5.3%, EMC 2.05%, small scale 1.26%,Jinchuan 1.11%.
Moreover Goodwell Mateyo voluntarily forgets to mention that ZCCM-IH received only crumbs from its 2018 equivalent 96,571t copper production. With a corresponding turnover of $630 million (2018 average LME copper price: $6525/t), ZCCM-IH got only $20 million from its 20% interest in the Kansanshi mine, or 3.2%!
In addition, it would be appropriate for Goodwell Mateyo as President of the Chamber of Mines to explain to the people of Zambia the business model of most Zambian mines. How is it possible that so-called investors can keep pumping money into companies for years without making profits and yet not giving
up…? The example of Vedanta is telling, this company hangs on to KCM like a leech even though the mine is in a disastrous financial situation. A few years earlier, Vedanta chairman Anil Agarwal bragged in India that KCM was giving him $500 million every year in profit, plus an extra $1 billion. Would Goodwell Mateyo be afraid that even an eight-year-old child will understand that there is something completely fishy in the Zambian mining sector?
With this statement, we wish to warn the Zambian people and their Parliamentarians against the misleading comments of the minion of the foreign mining companies Goodwell Mateyo. His sole objective is to do everything possible to ensure that the unfair and shady game of mining companies continues at
the expense of the Zambian people and the shareholders of ZCCM-IH including NAPSA.
By Thierry Charles on behalf of Euronext Minority Shareholders of ZCCM-IH