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Alba Iulia
Saturday, March 6, 2021

Acquisition of the 100 % stake in Mopani Copper Mine by Government wins praise

Economy Acquisition of the 100 % stake in Mopani Copper Mine by Government...

The Economic Association of Zambia (EAZ) has commended government for acquiring a 100-percent stake in Mopani Copper Mine.

Yesterday Government through ZCCM-IH acquired 90-percent shareholding in Mopani in addition to its 10-percent stake in a 1.5-billion-dollar deal.

EAZ President Lubinda Habaazoka said that the association is ready to work with the government to ensure that the mine is a success and urged those in charge of running the mine to be patriotic and ensure that set objectives are met.

Dr. Habaazoka was speaking to ZNBC News in Lusaka today.

Meanwhile, opposition Patriots for Economic Progress (PEP) President Sean Tembo has supported the government’s decision saying the move is progressive. Mr. Tembo has told ZNBC News that government’s participation in mining is critical as it helps mitigate challenges experienced in the mining sector.

Mr Tembo said this move will also help secure jobs and ensure tax compliance.

And The Industrial Development Corporation (IDC) has welcomed ZCCM -HI’s acquisition of Mopani Copper Mine saying the move will benefit Zambians. IDC Chief Executive Officer Mateyo Kaluba said that ZCCM-HI has the capacity to run the mines because of having experts in the industry.

Mr. Kaluba has urged Zambians to embrace the move and to have full confidence in ZCCM-HI. Mr. Kaluba said that it is high time that Zambians have a stake in the running of key mines in the country, adding that the IDC Group’s mandate is to see to it that companies under it continue to make profits for the benefits of all Zambians.

Mr. Kaluba was speaking in an interview with ZNBC News in Lusaka.

25 COMMENTS

  1. Answered prayer thank you God. In my last job in an international Bank in the USA my colleague responsible for the Glencor Bank relationship mentioned how the Glencore CFO had boasted about how they don’t pay tax in Zambia. In my MBA lessons on international law it highlighted how these multinationals evade tax through contracts and transfer pricing and Zambia featured highly as a victim. This development is good news. Careful about the off take agreement mentioned in the sale agreement, it may sell the copper at less than market prices.

  2. What Zambia needs to invest in is a company like ZAMEFA that was privatized. We shouldn’t export raw copper but have value added by manufacturing products like electric cables and appliances for export. There is a market for this and it will create employment. I like how this man Dr. Habaazoka thinks. He’s exposed and not one of the local self appointed economists that don’t seem to understand how the subject can and should be applied.

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  3. It’s very good news indeed. Just don’t put people who’ll behave like Hichilema once in charge. Zambia is full of greedy chaps

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  4. great move.I like this man.The problem of some Zambians can’t understand that a country can only develop when Zambians buy industries or govt run them.No where in the world u can develop with foereigners running your companies .America is like that bcoz americans owns 90% of assets.Why should u have HH to run a country with ideas of bring foreigners to take over all companies.And he thinks Zambians can’t run a company.Does that man think?I see inferiority complex in him.He won’t win.Bakopala never waste your votes to such saviour of foreigners

  5. New mines are better than old mines. Is it so hard to start from scratch instead of moving in abruptly? Time for consultations is here. Even then, investors collaborating directly with government are likely to create distortions in the mining industry. Substantial share holding on behalf of government coupled with effective monitoring is more suitable for the mining sector. It seems government is choosing to ignore history of mines in the country. The idea of finding a suitable investor is really great. Experience is the best teacher. Perhaps monitoring could be strengthened in the area of revenue collection. There is no guarantee that a public company cannot indulge is in the same type of mistakes that private companies committed in the first place. The ideological battle would never be…

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  6. Gov’t acquisition is one good thing ,but running it competently ,profitably with no corruption,kickbacks and politically influenced decisions is the real unknown monsters.

  7. @George Mbukisita, stick your head back in the sand where it belongs. You’re a danger to the nation. PF can’t even manage a pit latrine efficiently.

  8. Finally!!!
    Governemt through IDC now should create a new ‘MEMACO’ so that all metals from ZCCM-IH mines should now be marketed through the new MEMACO. That way, I guarantee you, Zambia will immediately see benefits – strengthening of kwacha, lower interests rates, lower inflation rates.

  9. Thank Dr. Lubinda for the well articulated write up. Some people need to be given such information so that they start understanding that we are a nation with brains capable of achieving anything we put our minds to

  10. This analogy is interesting!!! ???

    So, Zambia sold Mopani for $20m and $155 annual payments between 2003 and 2007, and today Zambia has bought back the same company for $1 and with that assumed a debt burden of $1.5 billion owed by the company to various lenders, suppliers and so on, this is merely months after the corporate entity declared the mine being uneconomic to run.
    My one question is ‘Whose brain was used to think this transaction through?’

    Painful as certain things are, the best thing to have done was to let the sleeping dogs lie..
    They would have closed the mine, paid off employees and incentivised the spin-off other industries. And the country would not have added to its existing debt burden.

    Let me simplify what has happened by using an analogy from the familiar

    Let’s say that you own a car worth K50,000 and you desperately need cash, so you advertise your car for sale and Mr. Smith shows up. Mr. Smith says, he will buy the car from you and in addition to which will employ your son to run it as a taxi business, except he won’t pay the amount in full or in cash.

    He pays K10,000 up front and promises you the rest over a period of five years.
    He starts his taxi business and builds himself a mansion, buys himself a car, grows his portfolio and runs this car down until it costs more money to keep it on the road than it actually makes operating as a taxi.

    Mr. Smith comes over to your house and declares that, he can’t keep your son employed any longer because the business is no longer profitable and he’s losing money running the car as a taxi.

    But because Mr. Smith has been keeping the car going and paying your son consistently, you decide to negotiate terms with Mr. Smith to keep the car running, the taxi business going and your son employed. After all, having unemployed children doesn’t look good to the neighbours.

    Mr. Smith can’t seem to convince you to stop insisting that he keeps running the car business, so he makes you an offer.

    Buy back the car for K0.5, keep your son employed, and one more thing…
    You will assume responsibility for all the debts that the taxi business acquired over the years of operation..

    This includes the money borrowed against the business to pay for Mr. Smith’s yacht, car, mansion, debts to spare parts suppliers and mechanics, and generally unscrupulous misdeeds, that you don’t bother to investigate. You also don’t bother to establish how much life the car is left with.

    Total debt amounts to just over K300,000.
    Mr. Smith has just walked away with the most amazing deal in the history of deals! He is walking away from the need to pay off debts, he keeps the portfolio he’s grown as a result of the business and you’re stuck with a car that has cracked chasis, a knocking engine, worn out tire, the road tax and insurance are unpaid… but at least you son still has a job.

    You sir have just proven Albert Einstein’s point.
    “Two things are infinite. The universe and human stupidity, and I’m not sure about the universe”.

  11. BaSatanist ba Glencore naba Mopani na Kleptoh² and all those against this brilliant move gotta go rot in hell fire.
    It is always costly to undo what was done muma 90s.
    We had very dull Zambians trading our mines causally with nkusa kleptoh² overseeing the project.
    Glencore aliswamo kale.
    Our assets mwandi okay chilankalipa.
    Uyu chigili kleptoh² kuntu namulangulamo nelya kwikoshi awa napanshi.

  12. Its only us Zambian who will develop this nation. I was born a Zambian and will die a zambian. If zccm ih cant learn from past mistakes, then call obama from USA to develop Zambia

  13. I thought we needed to discuss this:
    principal outstanding under the Transaction Debt will be repayable under a dual mechanism whereby:
    i. 3% of gross revenue of the Mopani group from 2021-2023 (inclusive), and 10-17.5% of gross revenue of the Mopani group thereafter; and
    ii. 33.3% of EBITDA less tax, changes in working capital, capital expenditure, royalty payments and interest and principal (calculated under the first mechanism) payments in respect of Transaction Debt, is at the end of each quarter required to be paid.

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