Saturday, April 20, 2024

Mopani Acquisition Is a Scandal That Will Cause Untold Misery To Many In Due Course

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The acquisition of Mopani Copper Mines by Delta Mining Limited is a scandal that many will regret in due time. So far in this particular week, this is the most bizarre announcement that the country has heard and ought to pay attention to.
Listen to part of paragraph one of the announcement. “has agreed to acquire 51% of shareholding of Mopani for an investment total of up to $1.1 billion.”

This statement above is one that is simple but very tricky. I will try to explain it below according to my understanding.

(1) Before this transaction, Mopani was wholly owned by Zambians through ZCCM – IH.
(2) Upon acquisition, 51% of shareholding moves from the Zambian people to Delta Mining Limited. This means the control of the mines moves instantly to Delta.
(3) From now on, all future dividends will accrue to new shareholders in line with current shareholding structure.
(4) Now, what has Delta given to the existing shareholders as consideration for them to give up their controlling stake in the mine? According to the announcement as referred to above, Delta is giving a promise to invest up to a total of $1.1 billion. This is one of the most silly expressions that I have ever seen in such transactions.

My question is – once Delta invests $1.1 billion in Mopani, and the mine starts to perform, and consequently the mine starts to issue dividends, who will be receiving those dividends? Is it not Delta itself? If the answer is that it is Delta that will be receiving those dividends, how then can an investment into its own company be considered as consideration for Zambians to give up a controlling stake in the mine?

This is like someone coming to takeover your house and saying, “I will construct a wall fence to the house, and I will also put pavers and then you will remain with a servants quarter as your 41%.” And then as the original owner, you are paid nothing. All you are waiting for is that wall fence and pavers as a payment for giving up the main house, the 51%. If this this is not foolishness then I don’t know what is.

And once new tenants come in, the one who took over your house will receive rental income from the main house while you receive your rental income from the servants quarter.

We have been taken for granted on this. This is one of the most audacious Zambian company transactions I have heard about since privatization.

Let me end by reminding the investor that Article 210 of the Constitution awaits you. Even though the people know about the attempt to mutilate the constitution by making haste amendments to it, owing to the fear of what may come due to such transactions may be under way, I strongly recommend that investors should take due care.
This advise is hearty from my point of view.

Restoring EVERYTHING PATRIOTIC.

MK26.02.2024

Patriotic Front FB page

31 COMMENTS

  1. What name can you giv to a person who is always negative and bitter with whatever others do ; whether good or bad . When others remove brutality , him becomes annoyed, others reopen the mines to increase job opportunities , GDP and exports, this man becomes bitter. Others introduce free education bursaries for skills training to young ones, this man becomes bitter. others increase cdf, this man becomes bitter, others manage to find a solution to solve the national debt crisis, this man becomes bitter, others improve and expand international relations, this man becomes bitter. others increase business opportunities , this man becomes bitter. the worst to him is to see anyone not coming form ….. to be in leadership . IS HE ONLY BITTER?

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  2. Indeed, this is a sale were the vendor receives nothing. What Mopani requires is a loan. We’re back to privatization were we sold but still remained empty handed

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  3. Zambians are being swindled in broad day light….HH coming up with all sorts of tricks to steal no wonder he’s been going round in circles with the Mine issue….ZAMBIANS WERE WARNED THAT HH WILL CONTINUE HIS DIRTY TRICKS OF PRIVATIZATION….and here we now…..ZAMBIANS YOU’VE BEEN DUPED

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  4. The best thing to do is to let the so called investor know that, the signed contract will not go beyond 2026.
    It is time for us Zambian to wake up.

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  5. Chachine muli P4rte of Fo0ls; you bought the mine for $1.5b from Glencore and have been operating it at a loss since then. Now you want to continue the bleeding using borrowed money? Only fools think like that.

    Which developed country runs mines? Why do developed countries leave mines in private hands? Zambia pa chalo, we just like talking. Nonsense!

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  6. Very interesting, Zambia defaulted all its loans some five years ago, this means that no one can give us a loan to finance Mopan mine and KCM. The people of Copperbelt voted for UPND in view of reopening both KCM and Mopan mines so that they can get back their jobs, only a poor writer can write this trash to make some political mileage.

    Dividend is paid to even people who own 0.05%, so Zambia returned 49% shareholding meaning Zambia will still get its dividends, and suppliers will still supply to both Mopan and KCM at a profit, that is what we call economics both the suppliers and the mines owners will benefit. The employees will be paid salaries and PAYE will be collected from them now what is wrong here Bwana writer?

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  7. “I will construct a wall fence to the house, and I will also put pavers and then you will remain with a servants quarter as your 41%.”

    What a drunken example…….even the numbers don’t add up.

    Should be more like ” I will renovate your derelict house and use it as a shop…..I will employ you and your family to work in the shop and you will supply the service needs…..and you get 49% of profits plus i pay taxes to you….”

    This sounds reasonable comming from a house falling into dereliction……..

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  8. I started reading then I came across some incorrigible arguments. Basically arguments that do not take into account the hard-nosed glencore hard placed mopani in.
    1. A1.5 bn usd debt
    2. All metal production to be sold to Glenmore
    3. Glencore to receive windfall royalties if copper price goes beyond 12000usd (similar to windfall tax which the private mining firms vehemently opposed)
    I went straight down to the bottom to find out who the support was. Oops. I stopped reading and shared there few salient points

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  9. This article is utter nonsense.
    The writer clearly does not understand the concept of how a business should operate and is trying to discredit a good business deal.
    Too many of your contributors are disingenuous and are just trying to score political points, they lose sight of things that are done for the greater good of Zambia.

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  10. arent you the same pf dunderheads who messed up mopani mine in the first place when yiou were in power. if you had the solutions why didnt you solve the problem. you are just mere talkative dunderheads.

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  11. so the pf day dreamers are still alive. time will surely teach u a lesson that dont have emotional attachments-emotional afiliations can be costly to you as a person. pf is gone my dear. u beter recognise that fact

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  12. Oops it’s like post 1991 privatisation. Most u you not yet born or still babies so u only read or heard.
    Livingstone Intercontinental Hotel sold for US $5million in transaction languages despite offers of over 20 to 30 million dollars. A new company Sun International Zambia is quickly registered and it buys the hotel. Who are the main shareholders in Zambia? HH and Chief Mukuni with Sun International South Africa.
    Ask Hh how he got cash to invest and be director he says I’m just a child from Bwengwa village.
    Sounds Familiar? Nothing happens which has never been it history repeating itself

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  13. KCM is going back to legal owners. Still Vedanta promised to invest in excess of $1bn, keep jobs, and increase production to the government ambitious copper production of 3, 000, 000 tonnes per year. At the same time KCM pays all suppliers and maintains the same workforce for PAYE collection base.

    Contrast this with Delta who are new fresh owners. Delta have not paid a single dime for MCM ownership apart from promising $1.1bn future investments. In 2004, Vedanta got KCM at $25m instead of $1.3 billion. In 2024, Mopani is sold for free at $0.00 when it is valued at $3 billion by the same chief privatisation agent. Tomorrow we go borrowing money to IMF, WB and so on and so forth. Life goes on.

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  14. Oops it’s like post 1991 privatisation. Most of u you not yet born or still babies so u only read or heard.
    Livingstone Intercontinental Hotel sold for US $5million in transaction languages despite offers of over 20 to 30 million dollars. A new company Sun International Zambia is quickly registered and it buys the hotel. Who are the main shareholders in Zambia? HH and Chief Mukuni with Sun International South Africa.
    Ask Hh how he got cash to invest and be director he says I’m just a child from Bwengwa village.
    Sounds Familiar? Nothing happens which has never been it history repeating itself

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    • That is criminal…….

      Why didn’t 4 previous GRZs prosecute him…?

      He must be a genius to evade prosecutions despite duping more than 15 million Zambians and international moneyary bodies………

      This is the type of genius we need to take us out of this debt quagmire……..

      Forwardee 2031……..

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    • How does the auctioneer bid for what he is selling? It’s corruption that even a bat can see (Bats don’t have eyesight ). But there are no laws against it.
      If I were HH I would sell the hotel to myself much cheaper than it is. Then come back with investors for the actual value. Imagine! And I can become Zambia’s richest man! Using national assets for myself!

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    • If what HH did was not illigal……….

      He must be commended for keeping what ever assets he bought in Zambians hands……..

      Atleast profits are circulating within zambia……

  15. KCM is going back to legal owners. Still Vedanta promised to invest in excess of $1bn, keep jobs, and increase production to the government ambitious copper production of 3, 000, 000 tonnes per year. At the same time KCM would pay all suppliers and maintain the same workforce for PAYE collection base. Contrast that with Delta.

    • Delta have not paid a single dime for MCM ownership apart from promising $1.1bn future investments. In 2004, KCM was sold at $25m instead of $1.3 billion. 20 years on, Mopani is given for free at $0.00 when it is valued at $3 billion by the same chief auctioneering agent. Tomorrow we go abroad borrowing money.
      Life goes on.

  16. This business transaction is too complicated for the writer of the article. A consideration and purchase price of such businesses are too complex to analyze with such simplicity, especially that non of us have access to Mopani balance sheet and current operational capacity. What we only see is the head gear at the shaft…and we think it should cost more!

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    • But must you assume that it should cost below the belt? Exactly the point. Why are buyers willing to invest in what is meant for the trash can? Unless it is viable. Which is why it NEEDED to be bought, not GIFTED for $00.00

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  17. Patriotic Front Page should read the entire contract, analyse where we are coming from, consider the cost benefit analysis vis-avis your views. Engage the ministry of mines to appreciate how the sale of 51% shares to Delta Mining Ltd was arrived at. What were the other options in terms of complex decision making matrix given the position of mining in Zambia. Then, you can alarm Zambians of the untold misery and rationale of it.

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  18. The Bembas say “Muleipusha imbwa ngeifwele” loosely translated as “How do you ask the gender of the dog that is naked? The chief “seller” is in state house what would you expect. Before we work up everything will be sold. That is the mind of a so called businessman. It is amazing that Hakainde is not selling his properties but those of the state, from privatisation time that has been the story.

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  19. The acquisition of 90% Mopani shareholding from Glencore for a debt of $1.5 billion by the PF was total madness.
    You have a debt of $1.5 billion in a mine, you have defaulted on national debt $19 billion and you have no money to fund the operations of the mine.in addition Glencore still had control over all the copper sales from mopani.
    You really wonder what the PF were smoking

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  20. And it is okay to flock from one madness to another with a senseless transactions. If PF are the gold standard of how matters are settled, we also have runners up in UPND. Where is the sanity you promise the people?

  21. How do you have dudderheads with degrees in that country? Even a grade 7 dropout knows only investors & shareholders get dividends. This author is one of those chaps in the failed PF who benefited fr the Lungu looting,now he wants to question the mining deals?

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  22. You have failed to run it. You have no capital to inject into it. It is on its way to become a white elephant but you still want to maintain ownership. Do you want to be 100% owner of a derelict mine which as time goes will continue losing value as it gets stripped of all assets to maintain and run it including paying salaries until eventually you have to just flood it and completely close it and abandon it like kabwe mine today. Or do you want to be a 49% shareholder of a vibrant, state of the art and fully functional mine producing tons of copper each day for export giving you a handsome dividend every year, employment for the local people, revenue in form of local contracts and taxes as well as other levies and fees to local authorities, rates, ground rent etc.

  23. The mines need recapitalization.The government has no money to pump into these mines for them to run viably, hence the need to attract investors with resources to invest in them.

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