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President Edgar Lungu receives credentials from envoys

President Edgar Lungu pose for a group photo with the newly accredited ambassadors to Zambia after they presented their credentials at State House
President Edgar Lungu pose for a group photo with the newly accredited ambassadors to Zambia after they presented their credentials at State House
President Edgar Lungu shares a light moment with the newly accredited ambassadors to Zambia after they presented their credentials at State House
President Edgar Lungu walks outside State House for a group photo with Mr Nelson Pages Vilas Cuban Ambassador to Zambia (center) and Mr Ahmed Mostafa Abdel Aal Egyptian Ambassador to Zambia after the presentation of credential at State House
President Edgar Lungu receives a letter of credentials from Mr Cho Jai- Che Korean Ambassador to Zambia during the presentation of credential at State House
President Edgar Lungu receives a letter of credentials from Mrs Barbra Maria Van Hellemond Netherlands Ambassador to Zambia during the presentation of credentials at State House
President Edgar Lungu receives a letter of credentials from Mr Nelson Pages Vilas Cuban Ambassador to Zambia during the presentation of credential at State House

Constitution amendment bill to be tabled on 19 June

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Minister of Justice Given Lubinda
Minister of Justice Given Lubinda

Justice Minister Given Lubinda says the constitution of Zambia amendment bill will be tabled in parliament on 19th June, 2018.

Mr. Lubinda told parliament in a ministerial statement that government has made headways in refining the republican constitution.

He says his ministry is preparing the draft constitution amendment bill, 2018 taking into account the stakeholder comments and submissions.

Mr. Lubinda says government is expected to finalize the drafting of the bill by 13th April 2018.

He says the draft copy of the constitution of Zambia amendment bill, 2018 will then be subjected to a team of independent draftspersons and eminent scholars for scrutiny between 16th to 20th April, 2018.

He explains that the ministry will then proceed with the process of obtaining cabinet approval in principle to introduce in parliament a bill to amend the constitution of Zambia.

Mr. Lubinda says the bill will then be published for 30 days as is required by law.

He adds that in order to continue on the basis of broad consultation, his ministry will conduct a consultative caucus for members of parliament on 12th June.

Treatment of Kambwili was cruel and inhuman, says Human Rights Commision

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The Human Rights Commission (HRC) has described as cruel and inhuman the decision by the Police to rush Roan Member of Parliament to Lusaka Central Correctional Facility after he collapsed at the Lusaka Magistrate court yesterday, instead of rushing him to the hospital.

In a statement, Commission Chairperson Mudford Mwandenga says the action by the Police is deeply regrettable.

Mr Mwandenga says the Commission is also deeply concerned at the continued infringement of Mr Kambwili’s right to bail despite the Court granting it to him.

Below is the full statement

29th March 2018
Press Statement
For Immediate Release

THE HUMAN RIGHTS COMMISSION IS CONCERNED AT THE CHALLENGES ROAN MEMBER OF PARLIAMENT HON. CHISHIMBA KAMBWILI IS FACING IN BEING GRANTED BAIL

The Human Rights Commission (HRC) is deeply concerned at the continued infringement of Roan Member of Parliament Hon. Chishimba Kambwili’s right to bail despite the Court granting it to him.

The Commission has been informed that the Ministry of Home Affairs, through the Department of Immigration, is in possession of Hon. Kambwili’s passport, which is supposed to be surrendered to the Court in order for him to meet the bail conditions. As a result of the failure by the Immigration Department to hand over the passport to Court, Hon. Kambwili is unable to be released on bail.

The Human Rights Commission is calling upon the respective state institutions to effectively co-ordinate and ensure that Hon. Kambwili’s rights and freedoms are not compromised as a result of the consequences of the unfortunate actions of the state at the expense of his health.

It is in the best interest of everyone, particularly the government, that Hon. Kambwili is granted an environment conducive for him to recover as a matter of right.

It is in the public domain that Hon. Kambwili has been of ill health, and that he has no record of being a fugitive for him to be treated in the manner in which he is being treated.

The Commission also condemns the decision to rush Hon. Kambwili to Lusaka Correctional Facility instead of rushing him to the hospital for medical attention after he had collapsed at the Lusaka Magistrate Courts on Wednesday. We consider that action to be an act of cruel and inhuman treatment, which is deeply regrettably.

The Commission is calling upon the state to accord Hon. Kambwili his right to equal protection of the law like any other suspect, by removing all impediments to him enjoying his right to bail which has duly been granted to him by a competent court of law.

The Human Rights Commission is a National Human Rights Institution established under Article 230 of the Zambian Constitution to ensure that the Bill of Rights is upheld and promoted.

Mudford. Z. Mwandenga
Chairperson
HUMAN RIGHTS COMMISSION

Lusaka Water interruption will normalise once all the rehabilitation works are done by November

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Lusaka Water and Sewerage Company
Lusaka Water and Sewerage Company

Rehabilitation works at the Lolanda Water Treatment Plants in Kafue are expected to be completed in the next eight weeks. The rehabilitation works which are being done under the Millennium Challenge Account project involves the changing of water pumps at the Iolanda water intake and treatment plant.

The project also involves the changing of equipment and cleaning of the segmentation plants and the filter bed.

The Lusaka Water and Sewerage Company shutdown the production and supply of water to Lusaka yesterday to facilitate the rehabilitation and maintenance works at the plant.

Lusaka Water and Sewerage Company, Public Relations Officer, Nshamba Muzungu said the water utility company will only be able to supply water at 63 percent during the period of rehabilitation because only two pumps out of three will be working.

Mr. Muzungu stated that the water interruption being experienced in Lusaka will normalise once all the rehabilitation works are done by November this year.

ZANIS reports that Mr. Muzungu was speaking during a media tour of Lolanda water intake and the treatment plant which was yesterday temporarily shut down.

He explained that the Lolanda water plant which has a capacity of 110 million litres will resume operations at 100 percent once all the works under contract one of the project is completed.

Mr. Muzungu noted that the plant will however continue to supply water at 63 percent once the two pumps have been replaced while 100% supply will only be attained after completion of the whole project.

He said his company is aware of the ever increasing demand for the commodity due to increased population hence is working on other water projects to meet the expected demand.

He cited the Kafue Bulk water project which will produce about 50 million litres and the JICA project which will add another 240 million litres of water as some of the projects that will be implemented to respond to the rising demand.

And Lusaka Water and Sewerage Company, Senior Engineer Mango Mwanza said the installation of new pumps has commenced saying one pump has so far been replaced while the second one is being worked on.

Mr. Mwanza said the project also involves the replacement of electrical equipment at the water intake whose works have advanced.

He said the installations of the new machines is on schedule saying the whole contract package one will be completed in the next eight weeks.

Zambia’s March Inflation jumps to 7.1%

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Shopping in Lusaka
Shopping in Lusaka

Zambia’s annual rate of Inflation for March 2018 has risen to 7.1% from the 6.1% recorded in the previous month.

Central Statistical Office (CSO) acting Director of Census and Statistics Goodson Sinyenga said that the increase in the annual rate of inflation is attributed to price movements in both food and non-food items.

Mr. Sinyenga said that the food inflation rate for March was recorded at 5.8 percent from 4. 6 percent in February which is attributed to price changes.

He has also explained that non-food inflation rate for March stood at 8.7 percent from 7.9 in February due to price movement for transport.

Mr. Sinyenga said this during a media briefing in Lusaka.

And The Central Statistical Office (CSO) has disclosed that Zambia recorded a trade surplus of K694.6 million in February 2018.

CSO Acting Director of Census and Statistics, Goodson Sinyenga however said in the month of January 2018, the country had recorded a trade deficit of K651.8 million.

Mr. Sinyenga told journalists today that the country exported more than it imported in nominal terms.

He said imports declined by 12.2 percent from K8, 841.2 million in January 2018 to K7, 765.1 million in February 2018 while exports increased by 3.3 percent from K8.189.3 million in January 2018 to K8, 459.7 million in February in 2018.

Mr. Sinyenga attributed the increase in trade surplus to the increase in metal exports by 2.3 percent and a decrease in the imports of consumer and capital goods by 22.7 percent and 22.3 percent respectively.

Government on track to develop the country

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Chief Government Spokesperson, Hon. Dora Siliya, MP
Chief Government Spokesperson, Hon. Dora Siliya, MP

Government says it is on the right path to spur social and economic development of the country.

Minister of Information and Broadcasting Services, who is also Chief Government Spokesperson, Dora Siliya says government has adopted a multi-sectoral approach in developing the country both socially and economically.

Speaking when she featured on ‘The Interview Programme’ on Millennium radio station this Morning, Ms. Siliya said the developmental activities taking place in different parts of the country are being done in line with the Seventh National Development Plan(7NDP) which is a road map to the vision 2030.

She stated that it is the first time the Republican President has introduced quarterly reports from ministries saying this is instilling a sense of responsibility in them.

In the agriculture sector, the Minister explained that government will soon come up with farming blocks which will empower people with land for agricultural activities.

“The Farm block that will soon be functional will see people being empowered with land. It is not only the provision of land but government will ensure that the basic services like water and energy are available,” she said.

She further said government has secured 200 hectares of land in the Northern Province that will benefit the young people.

And on housing, Ms. Siliya said government has plans to start partnering with the private sector in building 200,000 decent houses annually in the country to reduce the huge deficit that the country is having.

“We have plans to build 200,000 decent houses per year to address the shortage of decent housing units in the country. Of course this will not be done solely by government but in partnership with the private sector,” she said.

Ms. Siliya also clarified that the newly introduced statutory instrument on borehole fee is a one off payment that will enable Water Resources and Management Authority (WARMA) to regulate and monitor boreholes in the country.

President Lungu receives credentials from six envoys

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President Edgar Lungu shares a light moment with the newly accredited ambassadors to Zambia after they presented their credentials at State House

President Edgar Lungu says government will continue to value its relations with other countries to foster its social- economic development.

President Lungu said it is government’s desire to further enhance cooperation with other countries in various sectors of the economy.

The Head of State said this at State House today when he received letters of credence from ambassadors designate accredited to Zambia.

President Lungu stated that Zambia has over the years shared warm relations with all the respective countries in various sectors of development such as health, education, agriculture and culture among others.

The President added that there is also need to fully implement agreements signed between Zambia and Egypt on youth and sport, health and tourism.

He further said he looks forward to further strengthen bilateral cooperation in many areas of mutual interest with all the respective countries.

And the ambassadors also pledged their respective governments’ continued support to Zambia in implementing its developmental agenda.

Netherlands Ambassador to Zambia, Barbara Van Hellemond stated that Netherlands hopes to continue the good relations that have existed between the two countries.

She indicated that apart from investing in health, renewable energy and irrigation among other sectors, her country has sponsored Zambian students to study at post graduate level at various universities and institutions in Netherlands.

And Korean Ambassador Cho Jaichel stated that his government is willing to share its experience of successful economic development with the Zambian government towards achieving the industrialization programme of the country.

President Lungu received letters of credence from ambassadors for Cuba, Egypt, Romania, Netherlands, Republic of Korea and Hellenic Republic.

Nkana finally kick off 2018 league campaign

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Nkana coach Beston Chambeshi says they are itching to finally getting some league action under their belts on Friday.

Nkana are finally set to kick the ball in the 2018 league season on March 30 when they visit promoted National Assembly away at Woodlands Stadium in Lusaka.

The Assembly game will come before they host Power Dynamos in the big Kitwe derby on Monday in Wusakile.

“I think we can handle the pressure of playing two games in four days. What we need to do is focus on the first game against Assembly then we can look at the next game,” Chambeshi said.

“Yes, Assembly is a good team with a good coach and have just been promoted but I have the confidence in the team that they can handle any team now.”

Meanwhile, Nkana face Assembly after they were awarded a walkover result against Forest Rangers who failed to turn up last Sunday in Kitwe.

“It is a morale booster to the team and we were ready to play Forest who didn’t turn up,” Chambeshi said.

“But we have put that game behind us and we are looking forward to National Assembly to see how we do in that game.”

Assembly meanwhile, are hoping to avoid suffering a second successive defeat against a Kitwe giant after Power Dynamos left Lusaka last Sunday with a 1-0 win.

Kambwili finally released after meeting all the bail conditions

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Mr Kambwili at ACC Headquaters
Mr Kambwili at ACC Headquaters

Roan Member of Parliament Chishimba Kambwili has finally been released after meeting all the bail conditions in the matter in which he is charged with 34 counts of being in possession of properties reasonably suspected to be proceeds of crime.

This was after Mr Kambwili’s passport; a bail condition he failed to meet yesterday was presented to Magistrate Mwaka Mikalile.

A medical doctor from the ministry of health presented the Roan Member of Parliament’s passport to the court thereby securing Mr Kambwili’s released.

Earlier, Magistrate Mikalile had subpoenaed the deputy director general of the Immigration Department to appear before her to explain why Mr Kambwili’s passport which was believed to be in the custody of the Immigration was not submitted to the court.

The Immigration Department had grabbed the passport from Mr Kambwili upon his arrival at Simon Mwansa Kapwepwe International Airport in Ndola from South Africa where he had gone for medical checkups.

Meanwhile one of Mr. Kambwili’s lawyers Gilbert Phiri expressed shock how the passport moved from the Immigration department to the ministry of health , when it was confiscated from the NDC consultant at the airport in Ndola.

And NDC Secretary General Mwenya Musenge has described Mr. Kambwili’s release as partial relief.

Mr. Kambwili was who supposed to be remanded at the Lusaka Central Correctional facilities after failing to meeting the bail conditions , could however not spend the night in confinement as he was still unwell and instead spent the night in the university teaching hospital under guard by two officers from the Lusaka central correctional facility.

Eric Silwamba is new ZCCM-IH Board Chairman

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Lawyer Eric Silwamba speaks during the wedding ceremony of Masuzgo Kaunda Junior (grandson son of Dr Kenneth Kaunda) and Makomba Silwamba (daughter of Eric Silwamba) at InterContinental Hotel in Lusaka
Lawyer Eric Silwamba

Lusaka Lawyer Erick Silwamba has been appointment of S.C as Board Chairman of the ZCCM-IH.

Mr Silwamba is the Principal Partner at Messrs Eric Silwamba, Jalasi and Linyama Legal Practitioners.

He holds a Bachelor of Laws Degree with Merit (LL.B) from the University of Zambia and he is an Advocate of the High Court of Zambia.

He has over 30 years’ extensive experience in both private and public practice.

Mr Silwamba was elected Member of Parliament for Ndola Central Parliamentary Constituency in October 1991 and was re-elected in 1996 and 2001.

He served in very senior positions in government including as former Deputy Minister of Information and Broadcasting Services, Deputy Minister (Special Duties) Office of the President, Minister of Presidential Affairs and Minister of Justice and Government Chief Whip.

A statement from ZCCM-IH says Mr. Silwamba has had the opportunity of handling some of the most complex and high profile litigation in Zambia that relate to mining, commercial law, tax, administrative, criminal and constitutional law.

He is also a member of the Chartered Institute of Arbitrators of the United Kingdom and a qualified legal draftsperson.

Mr Silwamba becomes the first Board Chairman for ZCCM-IH since the death of Mr Willa Mung’omba in February 2014.

SERIES 1: IMPEACHMENT MOTION: President Lungu To Be Impeached For Debt Which Parliament Approved

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His Excellency President Edgar Lungu delivers his speech during the State of the Nation address at Parliament Buildings

By Isaac Mwanza

Shortly before the South African Parliament was to pass a motion of no confidence in President Zuma, Opposition Economic Freedom Fighters’ (EFF) begun calls for Parliament to be dissolved and fresh elections held before a new president of the country is elected.

EFF leader Julius Malema stated, “Once we remove Zuma, Parliament must be dissolved. The Constitutional Court made a ruling that Parliament failed to discharge its responsibility when it couldn’t protect the Public Protector, including holding the president accountable”

The Democratic Alliance leader Mmusi Maimane said they were calling for early elections because the ruling party is holding the country to ransom while the African Christian Democratic Party leader Reverend Kenneth Meshoe says this is not about just Zuma: “As a collective, we’re saying the man (Zuma) is not the only problem. The proof is that with all the motions of no confidence and having stated why we want President Jacob Zuma to step down, the ANC Members of Parliament defended and protected him.”

Zambia has launched an impeachment motion, similar to South Africa’s motion of no confidence, except the allegations made against the President of Zambia are mainly about the collective decisions made the Cabinet while other grounds are matters before the Court.

Some of the allegations made against the President of Zambia include procurement of debt, presidential undertaking of foreign trips when money could have been spent on hospitals or health facilities and procurement of debt. The other grounds which are also matters the United Party for National Development (UPND) leaders Hakainde Hichilema, Godfrey Bwalya Mwamba and Heritage Party Leader Brigadier General Miyanda has taken to court involve the question whether President Lungu should have handed over power to the Speaker of the National Assembly, Patrick Matibini, and President Lungu’s remarks on the eligibility case, respectively.

UNPACKAGING THE GROUNDS

1. Allegation on procurement of public debt

The particulars of the allegation on this matter is contained in 2.
2.2.2: The President conducted himself in a manner which brought the office of the President in disrepute, ridicule and/or contempt by procuring public debt which is beyond the capacity of the Nation to sustain contrary to provisions of Article 198 (c) of the Constitution.

Article 198(c) reads:
“The guiding principles of public finance include the following sustainable public borrowing to ensure inter-generational equity”

The relevant provisions of the Constitution of Zambia, Chapter 1 of the Laws of Zambia are Articles 63(2)(d), Article 114 (1)(e) and Article 65(2)(e) which read, in this same order, as follows:
“Article 63(2)(d)
The National Assembly shall oversee the performance of executive functions by approving public debt before it is contracted”

“Article 114 (1)(e)
“The functions of Cabinet are as follows recommend, for approval of the National Assembly loans to be contracted by the State; and guarantees on loans contracted by State institutions or other institutions.”

“Article 65(2)(e)
A Money Bill means a Bill that provides for, among other matters the raising or guaranteeing of a loan or the repayment of it”

The ground raises the question on what role did the President play in debt contraction? Did Parliament discharge its mandate under Article 63(2)(d) or it failed such that if it was in South Africa, Julius Malema, would say ‘Parliament must be dissolved because it failed to discharge its responsibility including holding the President accountable in contracting public debt’? Did the Minister of Finance, through the Bill on National Budget, seek Parliamentary approval of the debt to be contracted? Did Parliament collectively approve the Budget?

If South Africa’s ACD leader Meshoe was a Member of the Zambian Parliament, wouldn’t he have said, ‘As a collective, we’re saying the man (Lungu) is not the only problem,… the PF Members of Parliament defended and protected President Lungu’s borrowing by approving the Budget’?

CONCLUSION

If President Lungu is to be impeached for contracting a public debt, Parliament should consider a motion to dissolve itself for approving the Money Bill that outlined how much Government was allowed to borrow. Secondly, this ground is a way of putting the 41 Cabinet and Provincial Ministers on trial who recommend, for approval of the National Assembly loans to be contracted by the State.

As President Lungu does not get directly involved in procurement of debt except chairing Cabinet, the ground is a way of putting the ruling Patriotic Front on trial for the many debts that it has contracted. The success of the ground on debt contraction will simply confirm that the ruling Patriotic Front has failed to govern. In an event that this ground succeeds and two-thirds of Members of Parliament vote to impeach President Lungu based on the debt Parliament approved, to quote Julius Malema, ‘the problem will be the PF, and the people of Zambia must be given a chance to vote for their next leader.’

TopStar refutes high charges to Zambian TV Stations

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Prime TV owner Gerald Shawa and others with TopStar CEO Leo Liao
Prime TV owner Gerald Shawa and others with TopStar CEO Leo Liao

TopStar management has denied accusations of heavily inflated transmission fees to Zambian TV stations claiming their operations are affected by the fee structure for frequency.

TopStar transmission charges are reported to be around K800,000 per month.

TV stations have accused TopStar of being both a signal distributor and content provider but at a meeting held with TV station owners last week – TopStar Communications management said the compnay was responsible for national digital migration and the partnership with ZNBC allowed the decoders to carry different content.

TopStar is a joint venture between ZNBC and China’s StarTimes.

Recently ZICTA announced the awarding of the public signal distributor license to Multichoice who have been operating in Zambia for the past 22 years and have invested US$14 million in 8 transmitters.

TopStar claims to have erected 43 transmitters in one year and have signal coverage in urban and rural Zambia with the Western and North-Western provinces to be connected to transmission in April.

The TV owners that attended the meeting with TopStar management have demanded that government review the Digital Migration project to make sure all players on the market benefit.

Prime TV owner Gerald Shawa led the delegation of TV owners and was joined by others from Camnet, ABN TV, Diamond TV, TBN Zambia, Healing Centre Tv, Revelation TV, ACTS TV, Catholic TV, Hope Channel, City Tv and CBC TV.

Meanwhile, TopStar Zambia has assured soccer fans in the country that it will televise live all the 64 FIFA Russia 2018 World Cup matches.

ZANIS reports that TopStar Sales Director, Cliff Sichone disclosed the development during the company’s launch of the Ndiye Itambika campaign ahead of the Easter season.

Mr. Sichone said with the Ndiye Itambika campaign, Top Star has slashed prices of the company’s combo decoder from K299 to K199 in order to avail Zambians an opportunity to access affordable and quality TV programming ranging from sports to drama and other entertainment programmes.

The campaign will see new customers of TopStar anywhere in the country get a month’s free subscription in addition to the combo decoder kit which can be obtained from any outlet across the country.

Mr. Sichone said Top Star being a leader in digital migration is proud to share the benefits of the on-going digital migration to Zambians across the country.

He stated that Top Star is committed to the process of ensuring that more Zambians own satellite TV kit anywhere in the country.

Mr. Sichone said this is part of the reason his company has launched the Ndiye Itambika campaign in order to fulfil part of its mandate of implementing digital migration.

He added that TopStar has in the last six months spread coverage of the digital signal to over districts across the country and that satellite coverage is countrywide.

ZRA’s tax bill gets FQM a Negative Outlook from Moody’s Rating Agency

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Zambia Revenue Authority’s tax bill of of $8 billion has earned First Quantum Minerals Limited a negative outlook from the rating agency Moody’s

In a report released this week to the media, Moody’s said that while it affirmed the B3 corporate family rating (CFR), the B3-PD probability of default rating (PDR) and the B3 senior unsecured rating of First Quantum Minerals Ltd (FQM), the agency concurrently, changed the outlook to negative from stable.

The agency cited said that the negative outlook reflected the uncertainty of the magnitude of a potential settlement outcome with the ZRA and the timing of such in the light of limited financial resources to manage any material settlement.

Below is the full report

Moody’s affirms FQM’s B3 corporate family rating; outlook changed to negative

London, 27 March 2018 — Moody’s Investors Service has today affirmed the B3 corporate family rating (CFR), the B3-PD probability of default rating (PDR) and the B3 senior unsecured rating of First Quantum Minerals Ltd (FQM). Concurrently, Moody’s has changed the outlook to negative from stable.

“While we have recently recognized improved fundamentals of the global copper market and our expectation of materially rising EBITDA generation in 2018, the change of the outlook to negative reflects the risk associated with the assessment of the Zambia Revenue Authority (ZRA) for import duties, penalties and interest on consumables and spare parts of 76.5 billion Zambian kwacha equivalent to around USD7.9 billion”, says Sven Reinke, Senior Vice President and Moody’s lead analyst for FQM”.

RATINGS RATIONALE

FQM has confirmed that it has received a letter from ZRA noting an assessment for a liability of 76.5 billion Zambian kwacha equivalent to USD7.9 billion. Moody’s understands that the vast majority of the liability is related to penalties (equivalent to USD 2.1 billion) and interest (equivalent to USD 5.7 billion) rather than an actual potential import duty of around USD150 million on USD 540 million of goods imported by FQM between January 2012 and December 2017. FQM has stated that on some of the around 23,000 separate items in question there might have been an incorrect level of import duties applied, higher and lower than required. The company unequivocally refutes the assessment by the ZRA and questions the basis of the calculation.

The negative outlook signals that the company could be downgraded should a potential settlement have a material impact on FQM’s financial profile and liquidity position. The uncertainty of a potential settlement and the timing of such comes at a difficult time for FQM as the company has currently elevated leverage and high capital expenditure cash outflow both mainly related to the Cobre copper greenfield project in Panama. Accordingly, FQM has in Moody’s view currently only limited financial capacity for a large settlement payment.

FQM’s B3 corporate family rating also reflects the company’s solid fundamental position as a medium-sized, high-growth copper producer operating two large scale, high-quality, low-cost mines in Zambia, and several smaller mines in other jurisdictions. The company increased its copper production to 574 kt in 2017 compared to 539 kt in 2016 However, adjusted EBITDA improved only by 18% in 2017 to $1.1 billion despite copper prices having rallied by around 30% over the course of 2017 as EBITDA generation was affected by $568 million of hedging losses. For 2018 Moody’s expects FQM to increase EBITDA by around 40% to $1.6 billion, taking into account the company’s existing hedging arrangements at significantly higher prices than in 2017 and Moody’s copper price assumption of $2.75/lb for 2017, compared to current copper spot price of $3.10/lb.

In 2018, FQM continues to invest heavily into its Cobre greenfield copper project in Panama that it expects to bring on stream in 2019. The company has recently raised the project cost guidance to $6.3 billion from $5.7 billion previously and also increased its exposure to the project as it raised its ownership of the asset to 90% from 80%. FQM acquired LS-Nikko Copper Inc’s 10% stake in Cobre for $664 million of which $485 million will be paid in five instalments over a four-year period starting in 2018. FQM stated that a further $1.56 billion need to be invested to complete the Cobre project. The large investment plan will keep FQM’s capex high in 2018 and we expect the company to generate negative free cash flow of around $0.8 billion in 2018. However, once the Cobre project comes online and capex declines materially, free cash flow should turn strongly positive enabling FQM to deleverage rapidly in the absence of any new substantial projects.

FQM recently issued $1.85 billion of senior unsecured notes to repay some of its existing debt and to fund the large investment program. While the funding transaction has improved the company’s liquidity position and debt maturity profile, we expect that FQM’s adjusted leverage remains high this year. However, our forecast for EBITDA growth of around 40% this year (based on our copper price assumption of $2.75/lb) offsets the rising adjusted debt level and should result in adjusted debt/EBITDA falling from 7.7x at the end of 2017 to 6.1x in 2018 and further to around 5.1x in 2019.

During the expansion phase in Panama, FQM’s credit profile, remains constrained by the high metal, operational and country concentration, with about three quarters of 2018 EBITDA expected to be generated by two large copper mines in Zambia.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects the uncertainty of the magnitude of a potential settlement outcome with the ZRA and the timing of such in the light of limited financial resources to manage any material settlement. However, the outlook would likely be stabilized should FQM be able to settle the tax dispute without any material payment to the ZRA. Under such a scenario, the stabilization of the outlook would be justified by FQM’s improved liquidity position and the better profitability trajectory taking into account the stronger copper market fundamentals. A stable outlook would also require Moody’s continued expectation that FQM’s financial profile will strengthen, with adjusted leverage falling below 6x in 2019 and that the company will sustain a solid liquidity position.

LIQUIDITY POSITION

FQM has significantly improved its liquidity position with recent issuance of notes at a total amount of $1.85 billion. The new notes repaid a $700m term loan and the balance was used to fully pay down the utilization under the $1.5 billion RCF, which matures in December 2020. In the absence of any material tax settlement with the ZRA, the RCF together with the balance of unrestricted cash and cash equivalents of $702 million at the end of 2017 will enable FQM to fully fund the Cobre project taking into account the latest capex guidance. In addition, FQM has now only very limited debt maturities of less than $100 million in 2018 and 2019 which removes any debt refinancing needs until the end of 2020.

WHAT COULD CHANGE THE RATING — UP/DOWN

A stronger financial and operational profile, reflected in sustained positive FCF generation and reduced leverage, with adjusted debt/EBITDA below 4.5x, as well as strong execution and substantial de-risking of Cobre Panama project would support the upgrade of the CFR. A greater share of cash flow from projects outside of Zambia would be a requisite for an upgrade as well. The upgrade of the ratings will require FQM to sustain strong liquidity position.

Failure to timely reduce deleverage as a result of significant delays or cost overruns on the Cobre Panama project or a material financial settlement with the ZRA, with adjusted debt/EBITDA remaining above 6.0x, as well as weaker liquidity position would put negative pressure on B3 CFR.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Global Mining Industry published in August 2014. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

First Quantum Minerals Ltd (FQM), headquartered in Canada and listed on the Toronto Stock Exchange, is a medium size mining company with a large operation in Zambia (B3 stable), which represents the large part of the company’s earnings. In Zambia, FQM manages Kansanshi, a large and low-cost copper and gold deposit, as well as Sentinel a new low cost mine. FQM also operates a number of smaller mines in different countries. FQM has a 90% interest in Cobre Panama, one of the world’s largest copper deposits, in Panama (Baa2 positive). In 2017, FQM generated revenues of around $3.3 billion ($2.7 billion in 2016) and Moody’s adjusted EBITDA of around $1.1 billion ($0.9 billion in 2016).

Immigration Chief summoned to testify in Court over Kambwili’s “missing” passport

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Kambwili after he failed to walk
Kambwili after he failed to walk

The Lusaka Magistrate Court has summoned the Deputy Director General of the Immigration Department to testify in court this afternoon on the whereabouts of Chishimba Kambwili’s passport which was confiscated last week.

In a notice of subpoena issued this morning, the Deputy Chief of Immigration should testify before Magistrate Mwaka Mikalile at 14:30 Hours this afternoon.

The Deputy Chief of Immigration is also expected to answer questions on where Mr Kambwili’s passport is which has been deposed as being in the possession of the Department of Immigration.

Yesterday, Mr Kambwili accused Home Affairs Minister Stephen Kampyongo having instructed Immigration officials to hide the passport as a way of preventing him from meeting bail conditions.