Konkola Copper Mines (KCM) has announced that its newly engaged financial advisor – Rand Merchant Bank (RMB) has commenced preliminary works at KCM leading to the search for a provider of long-term finance.
KCM is seeking to increase its portion of the forecast total copper production of 3 million tonnes within the next 9 years.
Konkola Copper Mines (KCM) Provisional Liquidator Ms. Celine Nair on 28th September 2022, announced the appointment of Rand Merchant Bank (RMB) as financial advisor to the Company in the Government’s ongoing efforts to bring it back into full operation.
Ms. Nair said the RMB team is currently collecting information and data at KCM and conducting meetings with Management to enable the team to commence the valuation of the asset.
The banker is also setting up a data room to assist in dealing with queries from potential providers of long-term funding.
“In relation to the appointment of Rand Merchant Bank (RMB) as financial advisor to Konkola Copper Mines plc (KCM), the Company is pleased to inform stakeholders that RMB has commenced preliminary works at KCM leading to the search for a provider of long-term finance.RMB has been appointed through the Government’s efforts to secure medium to long-term funding for KCM.The RMB team is currently collecting information and data at KCM and conducting meetings with Management to enable the team to commence the valuation of the asset. The banker is also setting up a data room to assist in dealing with queries from potential providers of long-term funding,” Nair said on Tuesday.
“The Merchant banker will also attend to enquiries already received from entities that have indicated willingness to meet KCM’s long term financial requirements,” commented the KCM Provisional Liquidator.
Ms. Nair said the commencement of works by RMB on their mandate is a major step towards the resuscitation of Konkola Copper Mines to ensure the Company increases its portion of the forecast total copper production of 3 million tonnes within the next 9 years – the cornerstone of the New Dawn Government’s mining policy.
“We are optimistic that this process will fulfil the objectives to ensure KCM operations step up to the next level through implementation of key projects such as the Konkola Deep Mine to desired levels of production,” Ms. Nair added.
RMB was selected from a list of 11 local and international firms which were invited to participate in the tender process.
The appointment of RMB followed on from the announcement in June 2022 that a comprehensive search had begun for a financial advisor to assist in securing financing for its medium to long term projects.
A total of 11 local and international firms were invited to participate in the tender process that culminated in the selection of RMB.
“The appointment of RMB is a major milestone in the journey towards the full turnaround of Konkola Copper Mines Plc and its subsidiaries, Konkola Mineral Resources Limited (KMRL) and KCM SmelterCo Limited,” Ms. Nair said.
Ms. Nair added that, “The Company forms part of a strategic national resource base and stepping up the search for a strategic equity partner is vital to unlocking the rich ore reserves at Konkola Deep Mine. It is also pivotal in reaching the targeted increase in national copper production of 3 million tonnes within the next 10 years – the cornerstone of the New Dawn Government’s mining policy.”
Meanwhile, instrumental to the growth of KCM Plc is the Konkola Deep Mining Project (KDMP), which requires a minimum investment of circa US$1.2 billion, to construct additional pump chamber facilities necessary for pumping out water and unlocking new production areas within the rich ore reserves.
Other upgrades and expansions are required in the Tailings Leach Plant at Nchanga in Chingola, the Nchanga Smelter and other key assets.
“It is KCM’s focus to complete the process of securing capital as soon as possible in order to accelerate the unlocking of long-held back investments and mine development. These requirements are important to ensure growth and the sharing of benefits to strategic stakeholders, which include the Government and employees of KCM, its subsidiaries, as well as business partners and communities in KCM’s areas of operation,” Ms. Nair said.
Ms. Nair added that the appointment of RMB serves as an assurance to the ongoing management process, which is aimed at strengthening governance in KCM and its subsidiaries.
“A lot of improvements have taken place at KCM since May 2022 and the mine’s future is looking bright as we gear up to increase production as soon as bridge funding is secured, Ms. Nair said.
Copperbelt Province-based mining giants Mopani Copper Mines and Konkola Copper Mines, currently owned by the Government, are financially struggling due to lack of capital investment in the operations.
Uncertainty surrounding the controversial ownership of Mopani and KCM by the government has not helped the prospect of capital injection in the mining firms that have operations in Kitwe, Mufulira, Chingola and Chililabombwe.
The two firms have been struggling to pay suppliers and contractors who are equally failing to pay their respective workers.
The New Dawn government is aware of the challenges Mopani and KCM are facing.
Last month, President Hakainde Hichilema pleaded with Copperbelt residents to be patient as the government addresses challenges affecting the mining sector.
President Hichilema said the Government will soon announce new developments regarding the way forward on Mopani Copper Mines that need capital investment.
The Head of State said the Government is restoring sanity in the mining sector which was left in shambles by the previous Patriotic Front regime.
Mr. Hichilema said the PF regime made a big mistake by liquidating Konkola Copper Mines and when buying Mopani Copper Mines from Swiss firm Glencoe.