Zambia’s main opposition party leader Hakainde Hichilema criticised the government’s deal with Glencore on Thursday, comparing the economy to a leaky bucket broken by debt.
The state mining investment arm ZCCM-IH agreed on Tuesday to take on $1.5 billion in debt in exchange for full control of Mopani Copper Mines, previously majority-owned by Glencore.
“You are filling the economy with more debt, expensive debt, there’s no compensating growth. Where is the money going? It’s going. The bucket is leaking,” Hichilema, president of the United Party for National Development (UPND), said in a TV interview.
Zambia became Africa’s first pandemic-era sovereign default in November, and its debt burden is a key issue for the public, who will head to the polls in a general election on Aug. 12. Hichilema is the main challenger to President Edgar Lungu.
Lungu has framed the Mopani deal as a boon for workers and a success for his strategy of greater government control over mining assets. Glencore sought to shut the mine last year due to covid-19 disruptions and lower copper prices.
“What is wrong with government acquiring shares in the mines, especially when the investor was not keen to pump in resources?” he said on Thursday.
ZCCM-IH says the $1.5 billion is guaranteed by Mopani, not by the government, and is therefore not sovereign debt. It was unclear how the International Monetary Fund (IMF), to which Zambia has applied for a financing arrangement, would classify the loan.
Under the deal terms, Glencore will retain buying rights to Mopani’s copper, and ZCCM-IH will repay the loan principal by giving Glencore creditors 3% of Mopani’s gross revenue from 2021-2023 and between 10% and 17.5% of gross revenue from then on.
Glencore declined to comment.
Zambia’s copper belongs to Zambians and not to Glencore or IMF. A real patriot should rejoice when national resources are under the control of his country’s citizens because this is what leads to economic growth and wealth for all citizens. However, it seems this is not a view shared by the opposition in Zambia.
“Zambia’s economy is filling with debt and there’s no compensating growth” HH is 100% right bcoz that is what brought about last year’s default.
These are facts. We do want to own the mines but this was a bad move. So short-term. We’re so doomed with such people in charge.
The PF have a strange way of thinking.
Imagine someone bragging that he owns a block of flats. When you ask how much of rent he is getting. He surprises you by saying the rentals still go to the former landlord.
That is what the Mopani and Glencore debt issue is all about.
Nine Chale or Neneh Cherry always as gullible as ever typing away from a little affluent village in Germany oblivious of what even patriotism means….let explain it to you in layman’s terms this deal is like you who is a minority shareholder in lets say a cashew nut or rubber plantation and you get full ownership from your partner who says I will be selling the produce whilst retaining 70% you will get the rest and pay for wages, maintenance, running costs of the farm until the debt is paid….your partner is not stupid he is away of how long those rubber trees will produce. Now you think that is a good deal? Dont be blinded by stupidity …this is the same man who warned you about borrowing for consumption and you said the same thing about patriotism ..now $30 billion dollars later…
My comment is awaiting moderation
It’s good Zambia has taken over its own resources. Glencor’s CFO was apparently boasting to my workmate that was responsible for the Glencor banking relationship in London that they don’t pay tax in zambia. I’m also glad that HH has nothing to do with this transaction because of his conflicts of interest and we would have ended up like the Sun hotels international deal in Livingston where he ended up a shareholder
@Mzambia wa Zamani, there may be no compensating growth at the moment but at least we can say we have regained full control over our resources and that’s a liberating force in itself. The debt may seem expensive now but to leave the country’s resources in the hands of multinational companies is an even more expensive debt because it robs the future generations of the possibility to exploit these resources some day.
I hate personal attack but I cannot resist this one. Nina Chale, It doesn’t seem you have had the privilege of being in the four walls of a classroom & benefited from enriching whats between your ears. Don’t missuse the word patriotism. The word sounds nice however the implications of the Mopani deal are grievous under our economic circumstances
Quest – Leave our sister or brother Nineh Chale s/he is annoyingly gullible as they come …Glencore had its reasons for wanting to close that mine even when copper is currently high but PF are simply looking out for those 15000 votes. This govt has lamentably failed to record a single profit in Zamtel which has a monopoly in the telecoms sector in Zambia and now want to run a mine….they can not even run a small Gold mine in Solwezi.
So utupuba tuletalika. You cannot borrow money to acquire an asset without proper risk assessment and whether your return on investment is over a certain allowable or within a given payback period. It would be nice to see what the business case from government looks like.
Mubambe Tutu Shimette good English but no solutions for miners if we go by hh way of handling mopani
As I have repented and I am now born again, i can only pray that our brother HH thinks hard and reconsiders his position. These are our resources and getting back control should be in every zambians interest. I would like to think that as a zambian, hh should be proud of this development. My brother hh we love you and need you to offer constructive advice on how we can manage these mines so that they generate income to pay off debt and the future generation has ownership. I will pray for you hh so that you see beyond politics.
Tarino, LTs owners are full born again like me. If you promise to change your evil ways, I will recommend that your comments are not censored. You are a brother to me but you need the lord in your life
Pay back what you owe the whites not bribe people to persecute me pa ndola, I hate HH
I think that we as Zambians should be proud of what God gave to us, you can only boast about what is in your house and guard it jealously don’t allow a foreigner to come and rule in your own house, those characters were punishing our people with un founded reasons for job losses if it means failing then better we keep the mines to ourselves, and do other ventures of business to employ our people rather than allow crooks to keep mining without any dividends.
If we fail which is unlucky to happen, we can do other things as we properly plan how to run that mine without losing anything .
It’s his brain that’s leaking. He needs to be checked. The challenge is that he has his funders like Anglo-American pushing him to say whatever he has to so. We won’t be deceive like those of old. Just find other ways of paying those who have been funding you for long time without fruition .
Lisa Liywali good observation any normal human being will borrow money to save a friend or relative no matter the cost.the government is right to protect the workers from sudden loss of employment and no immediate income for the entire Mufulira population and other dependants linked to the mine
Christopher Phiri that’s for sure
U are right guys this HH is a ruthless business man who cares mire about money than people’s lives
Lisa Liywali HH never criticised the the move taken by government. HH made it clear that mines can be owned by Zambians/government as long as there is no political influence. Pf are trying by all means to fabricate fake stories about HH over mopani mine just to dent his name especially on the copperbelt
HH’s lack of clarity is what will hurt him in the polls. I have read the whole thing but I can’t still get what he is trying to put across. He should tell us how the UPND would deal with the issue.
I pray for hh. He seems lost. I believe deep down he is a good soul who just needs direction in the lord’s word.
I will continue to pray for people like hh and his supporters so that they see that being zambian is more important than following party ideology. In my old life I would have insulted hh but as I am born again, I wish him nothing but love and will pray for him. I love you brother hh
@Nine Chale ,ok what have you achieved with the resources in your hands – Zamtel,Zambia Airways ,Mulungushi Textiles ,Zambia Railways,the depreciating Kwacha etc…? ALL GOING TO ROT.
DO NOT CONFUSE LUNACY WITH PATRIOTISM.
They are two completely different things
Any debt financed asset that in time can pay for itself is the best you can find on the market. All big time real estate investors in all markets use this mode of financing. This is at the heart of project finance. We may have doubts about the terms of the agreement since we are not privy to it but to denounce such a deal begs the question: would you throw away such a deal that self finances so as to make you an eventual owner? I doubt if any of us will answer in the affirmative.
But it’s him who has been leaking all this while. He brain-mouth coordination abilities have been questionable for a very long time. He has had a lot of trouble doing anything sensible for himself
Are you sure? HH is a very successful businessman. The problem is not running of the mine but the corruption and misuse
15 years on since the Mwanawasa era we have not learned anything still repeating the same mistakes even worse we have a Kakistocracy in charge…just repeating the same mistakes …Glencore are laughing all the way to the bank for a company registered in some tax haven and a master of transfer pricing …they will make a killing selling that copper in front of your dull silly faces. How can a broke country be making such deals when it can not even afford to pay $42 million.
The problemo here is the economy is in freefall……
every bussiness in the country lives in the economy, …..if the economy is in freefall , every business is struggling,
except the pockets of lungu and co…
@Mzambia wa Zamani the companies you mention represent a different business operation concept from the mines because their sustainability depends on their performance and not just on the availability of natural reserves.
Let me be clear: I’m not saying the state is the best enterpreneur but I believe it’s the sole responsibility of the state to manage the country’s natural wealth by retaining the upper hand and not foreign companies. The ability for citizens to directly benefit from the resources should be state priority.
Copper production in Zambia:
Pre-independence: 1930 – 1963 (1 to 500,000 t)
Post independence: 1964 – 1968 (500,000 t to 750,000 t
Nationalisation: 1969 – 2000 (750,000 t to 300,000 t)
Privatisation: 2000 – 2018 (300,000 t to 700,000 t)
Numbers do not lie.
Aka kapuba nako kafula ifya kutalika talika mwe..
Did HH consider the risks of selling the mined when he was consultant for the government during privitisation. Why now? Cheap politicking. Consider the welfare and prite of thousands of miners and their families who were supposed to lose income. Don’t just think of money but the well being and dignity of your citizens.
Voice of Reason – Please don’t compare mining to Property development or Real Estate investment …the problem with you chaps is that you dont have a single clue how a mine is run you think its property where you simply get tenants to finance the mortgage….it takes prudence and ruthlessness to run a mine something that a govt cannot do. The likes of Glencore have borrowed on the market at reasonable rates but the pandemic , you add on the unpredictable economy, political interference in regards to modernising the mine leading job cuts has played havoc to their numbers. Remove Hakiende name from that article and think about what the person is saying…I can assure you whatever happens in August those jobs at Mopani are going and we will pay heavily as taxpayers.
HH u are government assets seller sorry no chance for u not even in 2026
Some of you think because Chile is doing it so can we …really laughable …Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. In Zambia how can you have strong financial institutions when BOZ Governor is a full-time drunk cadre and our sovereignty bond rating is laughable….our President is weak and a jokester a prankster, a buffoon, a gagster etc ..name it he is all above. There is nothing he has done that he can stand on platform for re-election if he qualifies to allude to PF need to pick another candidate.
Stuff from hh indicates that everything by current government is faulty, is wrong, is leaking. Not true, we don’t believe you, hh. Your stuff doesn’t wash, will not wash this election cycle.
Hello Zambian, Can we wake up and debate the MCM takeover with facts without using the political party lens. Let us put Zambia First and not the party. From the takeover deal, Zambia will be getting around $2300 per tonne mined and Glencore will get away with &5000,
The average production cost of copper per tonne is above $4500. This simply means will incur a loss of 4500-2300= 2200 per tonne produced. Where are the Zambian economist in this deal? Can we be serious for once as Zambians, this is not health at all because technocrats are failing apply themselves fully. See below snap shot of the data i googled.
Even you HH, you need to debate with facts, For GOD sake you need to inspire confidence in the voters by showing that you understand what the problem, rather debating anyhow…
My comments of late are not being posted by Lusaka Times
IDC chairman: “…Regarding the payment of the US$1.5 billion transaction debt by Mopani to Glencore, Mr Kaluba said that the debt was the burden of the mining company itself and not the State…”
Then this oval headed twit says this????
I can feel the demons here. Since I was baptised and born again last week, I am able to sense negative forces. My brothers in diaspora I urge you all to repent. Hating your country of birth and disrespecting leadership will only curse you. They say respect your elders and authority. You won’t lose anything. Anyway I will continue praying for you sinners
Zambian Citizen – You are another one …really laughable ….so if its not the burden of the govt who do you think owns those shares? ZCCM IH and who owns ZCCM …why do you think that Mines minister was busy celebrating about saving 15,000 jobs…you people have small brains …you are the ones who say that you dont need toilets in your homes but complain when you smell faeces in your back yard.
You are the same blogger who stated right here that its okay for an ambulance to cost $280,000 …really laughable.
This deal is to toxic!! It was cheaper to pay all workers for 15 years even if they don’t do anything that getting a loan requiring to pay $1.5 billion immediately plus $4.8 billion overtime for the assets you released at $20 million. It is insane!!
If they put money in the Gold mine in Mwinilunga it would make sense and not in the dead horse!! Tomorrow they will wake and say Lizard will help negotiate debt. Silly Boma iyi!!
And the PF monkeys still think that those 3000 jobs will be saved? In your own imagination, where did u see Government, especially PF government pay even 1000 pipo on time? So, here is what’s going to happen; yes, government will retain all the employees at Glencore,but they ll simply not get paid.
No time to waste on Hichilema’s statements that lack detail. He’s just good at stealing.
It sounds so good when you listen to PF and UPND’s debates.we have so many learned zambians who should come on board and shade more light on this issue in the likes of former finance ministers : Edith nawakwi, Ngandu Magande,Felix Mutati, Situmbeko Musokotwane, Bwalya Ngandu and other brain thinkers like Bob Sichinga. On paper the deal is so complicated to a layman considering that sometimes politicians take people for granted. How l wish Frank mutubila and costa means a can take such a task to bring these patriot zambians on board.I pray that something positive will come out. Please Bowman Lusambo sponsor this noble cause to ease tension amongst yourselves.
Takapite
This is exactly why kleptoh² sounds the silliest. Mopani wanted to shut down the mine because of SARS-CoV-2. The arm twisting maneuver. That would have had miners lose their jobs. The satanic demon can’t offer alternatives but criticize.
Well kleptoh², what would you have done under the circumstances? Ndwiiiii!
This chap has no solutions for the country. He is an empty capitalist with his name written in the paradise papers.
THIS IS A NO WIN SITUATION REGARDING GLENCORE
TIME WILL TELL AND ALL WILL BE REVEALED WITHIN 2 YEARS
THEN THE CONDEMNATIONS REGARDING THE PURCHASE WILL BE REALISE
AND TEARS WILL BE SHED !!!!
MOTOR MOUTH A BORN AGAIN WHAT A LOAD OF RUBBISH !!!!!!
HE CANT EVEN HONOUR 1 OF THE COMANDMENTS
HE SEEN THE WRITING ON THE WALL AND NOW GETTING COLD FEET
HIS UTTERANCE STILL WONT SAVE HIM
Well Any meaniful Investor will see the potential presented in the forecast for copper prices and would seize on current prices to increase productivity to lock in forward buys and repay not only the amount of $1.5 Debt Financing in the deal but also use those sovereign wealthy reserves to beef the national treasuries and repay the Euro Bonds with proceeds or sale of equity participations in placing of shares to private investors in need who may want to take a [position in the Red metal and profit The average copper price in 2021 can reach $6,800 more than 12% price increase projected in for 2020
HH kuti amisampwisha uyu.
From the analyis, i shared above, it is clear that MCM will be running at a loss due to higher production cost Vs Earnings as stipulated by the deal. While we appreciate the ownership coming to the zambian people. The big question is , how are we going to offset deficit incurred. If i take you back to the 1990s, ZCCM was making a loss of $1m per day and hence the donor condition of desposing of it in order lift off the burden on GRZ.
If a loss of $2200 per tonne is anything to go by and with daily production for MCM estimated at 1000000/365= 274 tonnes, the daily estimated losses is $0.603m. Mind you this is without putting KCM into the equation. In short, we look like we headed back to 1990s, where economical hardship where too harsh and we were forced to sell the mines cheaply…
Tarino Orange; I gave two examples. For your own information, I used to undertake the financing of ZCCM when I worked for an international bank. I know something about mining. Project Finance, where an asset self-finances is the bedrock of all kind of projects, of which mining is one. A positive NPV in project finance, implies that a set criteria has been met and the project will self-liquidate. So my comment on the issue under discussion is based of corporate finance. Apply your comment to this, if you will.
Comment: According to prophecy ECL Will win the August election. For it is not the will of the opposition and its supporters but that of God the almigt to have this done. Just like what the devil did in heaven, he was throan like rotten eggs. Zambia is like heaven. “God do this for HH’s surrogates to prove in August Amen”.
OK.. THIS IS IT NOW…
Till date, Hichilema criticized the government for no reason, he even criticized for those projects which have been popular, and appreciated by Zambians.
We all know that economy is slow due to Covid19 pandemic. He just playing with it to target PF ahead of the August elections.
President Lungu took the right decision…it has given new chances to mine workers of Mopani copper mines because more than a thousand mineworkers would have lost their jobs due to pandemic. Once copper production starts increasing, the country’s economy will automatically increase.
Zambia is on the path of development, through the economic recovery programme the country and people both will be uplifted, our economy will be boosted up, within two-three years.
HH is the biggest thief in Zambia!! He holds properties worth millions and millions. His criminal details are mentioned in his biography, Zambians must see that as it is not written by PF.
The mining industry has the potential to attract foreign investment and to boost up the country’s economy. So, how could the government allow the industry to shut down due to pandemic loss? President Lungu has taken the correct decision and we support him.
Before targeting and criticizing the PF government over their decisions, why can’t HH tell his own development vision? It is high time, we just can’t vote for him on the bases of criticism. The elections are around the corner and still, Hichilema shared zero plans to uplift Zambia’s economy.
So, according to Hichilema, the government should have avoided interfering in the matter and let the mining industry get shut, let thousands of people lose their jobs, right??? Thank God, HH is not our President.
Bo HH everything you are against mmmmm what stone heart you are, HH will never rule this nation because he as no plan for Zambia.You cant rule what you hate I cant never.
In as much as i agree with HH on many things, i don’t agree that everything PF does is nonsense. It is gullible to think like that. In this case, the government had no choice if any apart from the course of action taken. I want to believe that they took precaution in reaching this agreement and that it was the most prudent available option.
Am happy my brother Kaizar Zulu is born again. You almost went bananas my brother.
It’s true about HH he doesn’t give us goosebumps or have a good conviction when he is addressing the nation he lucks vocal aggression on some of the issue affecting the ppl of our country he is too soft in his approach to things. he is like showing softness from outside whilst campaigning and he is going to be ruthless when he gets his presidency seat. Some of us don’t have any crew what his original mandate is going to be moving forward.
Ladies and gentlemen
Refrain from commenting on issues that are beyond your knowledge. Mining is not a katemba where you pump in a ka small capital today and tomorrow you start enjoying the profits. Please allow economists and mining engineers to discuss.