Last week, it was revealed by Government, through ZCCM-IH, is seeking to buy controlling shares in Mopani Copper Mines (MCM) by buying off Glencore shares.
At the moment, ZCCM-IH is a shareholder in MCM with only 10% shares. Glencore holds 73.1% shares while First Quantum owns 16.9%.
MCM is valued at about US$1.67 billion. This means Glencore shares are worth about US$1.22 billion.
The question is: should Government use ZCCM-IH as a vehicle to buy these shares?
First of all, at the moment, we do not think that ZCCM-IH has financial resources to pay US$1.22 billion cash. However, IDC has the capacity to do so.
Of course, we are aware that IDC has 60.28% shares in ZCCM-IH, while Government has 17.25% shares in ZCCM-IH.
Our view as the Green Party is that acquisition of the MCM shares is a very welcome move in the sense that in 2022, we expect the prices of copper and cobalt to spike. This could therefore a golden opportunity for Government to find money to pay the first Eurobond loan of US$750 million which is due about that time. Otherwise, it will be extremely hard for Government to find such colossal funds if restructuring efforts fail to materialize.
Having said this, we think that ZCCM-IH is a wrong vehicle to acquire the MCM assets. Rather, we think that it is better for Government, through IDC should set up a new company altogether to takeover the Glencore and Government shares in MCM.
The reason is simple. You will recall that two years ago when Felix Mutati was Finance Minister announced in Parliament that Government would soon sale 17.3% of its shares in ZCCM-IH?
You remember he said the long term strategic plan was to reposition ZCCM-IH for growth through strategic partnership and to comply to LUSE requirements? He said that the LUSE listing requirements stipulates that no single shareholder should control more than 25% of equity in any one listed company? And that in compliance with the listing requirements, government intends to sale 17.3% of its shareholding in ZCCM-IH?
You also recall that Government planned to sell the shares to an Israeli company? You also recall that a search on the physical address of the company in Israel for the said company was elusive? And you recall that ZCCM-IH paid over $100 million advance payment to an Italian company to rehabilitate Ndola Lime, and that company went into liquidation making ZCCM-IH lose so much money?
You will also recall that ZCCM-IH is in court and arbitration with KCM over multi-million claims? Are you aware that if, ZCCM-IH loses, it may be liable to compensate Vedanta billion dollars?
How far has Government gone with the sale of the 17.3% of ZCCM-IH shares to comply with LUSE listing requirements? How far has ZCCM-IH gone to recover the US$100 million advanced to the Italian company in liquidation? How far is the ZCCM-IH and Vedanta KCM case in court? How far is the ZCCM-IH and Vedanta KCM case under arbitration?
As Green Party, we do not think it is wise to use ZCCM-IH as a special vehicle to take over MCM shares owned by Glencore. We think that ZCCM-IH has too many skeletons that require to be cleansed or exorcised. Otherwise, ZCCM-IH will be a public liability that will swallow for nothing MCM shares.
We demand that Government abandons the dirty scheme of transfer of MCM shares to ZCCM-IH as the scheme will ultimately not be in public interest.
Peter Sinkamba
President
Green Party
Sinkamba is copying and paste “consultation reports” by HH during privatization on Zambian parastals. This exactly what made HH so filthy rich, just those %%% .
25 years from now Sinkamba will be accused of selling Mopani Mines.
The only difference between HH & Peter is that , HH was demanding high price for his analysis, which made him a millionaire. But Sinkamba is offering FREE advise, plus paying LT to publish his expensive analysis.
Good observation Mr Sinkamba. Private enterprises and investors dont have confidence in any business with Government control in Africa. ZCCM IH tried to offload the shares owned by GRZ on LUSE and they were snubbed. I still dont agree that government should start running the mines, they are not going to yield anything desirable for the general citizenry because, unfortunately we are not such a disciplined people when it comes to public institutions. Majority of us are not yet there. Only few will benefit and the copper production can even get to Zero
Good observation Mr Sinkamba. Private enterprises and investors dont have confidence in any business with Government control in Africa. ZCCM IH tried to offload the shares owned by GRZ on LUSE and they were snubbed. I still dont agree that government should start running the mines, they are not going to yield anything desirable for the general citizenry because, unfortunately we are not such a disciplined people when it comes to public institutions. Majority of us are not yet there. Only few will benefit and the copper production can even get to Zero
A decision has already been made by the competent government on this issue. Any way thank you for the suggestions. At least sinkamba comesup with his views and solutions unlike the privatisation thief who only criticizes and loses his temper when asked questions
KK failed to run the mines under state control, what more incompetent PF who can’t even see beyond their short nose, or is it pockets, or both?
KK failed to run the mines under state control, what more incompetent PF who can’t even see beyond their short nose, or is it pockets, or both?
LT, even if you censor comments, you can’t stop the truth. And the truth is out there for all to see..
There so much incompetence and polirical interference at ZCCM-IH. As for IDC it should be dissolved as soon as new giovernment assumes office.it is an unnecessary bearaucracy and condiut of corruption, nepotism, cadrerism choking the already precarious vaibility of companies like zamtel, zesco etc
There so much incompetence and polirical interference at ZCCM-IH. As for IDC it should be dissolved as soon as new giovernment assumes office.it is an unnecessary bearaucracy and condiut of corruption, nepotism, cadrerism choking the already precarious vaibility of companies like zamtel, zesco etc
GREEN PARTY IN ITS EFFORTS TO REMAIN RELEVANT TO ITS SPONSORS SHOULD STICK TO ENVIRONMENTAL ISSUES AND LEAVE FINANCIAL MATTERS TO BUSINESS EXPERTS AND NOT PARADISE HH.
GREEN PARTY HAS MADE SOME VERY GOOD OBSERVATIONS. ANY PATRIOTIC ZAMBIAN WILL APPRECIATE THIS AND TRY TO TELL GOVENMENT TO CONCIDER THESE VIEWS BEFORE GETTING THE MCM SHARES