Zambia Investor Briefing: April 2024
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OVERVIEW
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal.
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambian copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’.
Canadian energy producer SkyPower Global has signed a power purchase agreement (PPA) with state-owned utility company ZESCO to deliver 1,000 MW of solar energy. This will support the Green Giant Zambia Project. A statement by President Hichilema said the project aims to substantially increase Zambia’s capacity for renewables in order to address “both current and future energy needs”, both for domestic usage and the mining economy.
The Administrator of the US Agency for International Development (USAID) Samantha Power has promoted the Lobito Corridor investment while on a visit to Angola. The rail line will link Zambia and the DRC to the Angolan port of Lobito and bolster trade and economic development in the region by significantly reducing transport time for the country’s mining output, including copper and cobalt, to reach the coast.
A CLOSER LOOK
Mining Developments
The UAE’s International Resources Holding (IRH), a unit of the country’s most valuable company International Holding Company, has reportedly made an offer of over $1 billion for a 51% stake in Konkola Copper Mines (KCM). The proposed deal, allegedly worth over $1.1 billion, would see IRH take a majority stake in the Zambian assets of Vedanta Resources, owned by Indian billionaire Anil Agarwal. A source told Reuters that the company is seeing interest in KCM from various investors.
It has been a busy few weeks for IRH in Zambia. Reuters reported in March that the Abu Dhabi company was interested in acquiring an 80% stake in Lubambe Copper Mine, despite JCHX Mining having agreed in January to purchase the asset. Shortly after, Hichilema announced the IRH had acquired a 51% controlling stake in Mopani Copper Mines ahead of fellow contenders Sibanye Stillwater and China’s Zijin Mining Group.
Elsewhere, with First Quantum Minerals (FQM) allegedly considering the sale of up to a 30% stake in its copper mines in Zambia, reports emerge of companies considering bidding for a stake. Chief among them is mining conglomerate Rio Tinto and Saudi Arabia’s Manara Minerals Investment. The assets, which include Sentinel and Kansanshi copper mines, are also being apparently being assessed by China’s Zijin Mining Group and Japanese companies Mitsui and Sumitomo. It is likely FQM will seek initial bids in the coming weeks.
Debt Restructuring
Following the welcome news at the end of March that Zambia had agreed a revised debt restructuring deal with bondholders, government is now in now in talks to restructure $3.3 billion of commercial debt. Commercial lenders yet to agree to a deal include Chinese state-owned China Development Bank and Industrial and Commercial Bank of China, regional African Export-Import Bank, and western Standard Chartered. Finance Minister Situmbeko Musokotwane has expressed optimism, telling Bloomberg: “We expect the deal to be done in months” having already made “a lot of progress”.
FDI
The EU-Zambia Business Forum, held in Kitwe this month, brought together policymakers, industry leaders, and other stakeholders in the copper industry to explore opportunities for sustainable growth and green investments in the Zambia copper industry under the theme ‘Growing the Copper Industry through Sustainable Value Chains’. Hichilema officiated and addressed the summit. The EU delegation was led by Henrik Hololei, special advisor at the European Commission Directorate for International Partnerships. Hololei has since announced the EU is ready to support Zambia in making its railway network fully operational. The revitalisation of the railways will play a major role in transforming the nation’s economic growth.
Elsewhere, in a significant boost for Zambia’s mining economy, Japan has committed $1.5 billion to support investments in Zambia’s mines by Japanese companies. This was announced during a bilateral meeting in Tokyo between the Minister of Economy, Trade and Industry Paul Kabuswe and Japanese officials at the sidelines of the Zambia-Japan Mining Investment Seminar.
In other news, State House hosted Speaker of the Senate of the Czech Republic Milos Vystrcil, who was leading a delegation from the Czech business community to explore opportunities in Zambia.
Regional Partners
President Hichilema visited Dar es Salaam to celebrate the 60th anniversary of Tanzania’s Union Day. There he held bilateral talks with the country’s president Samia Suluhu Hassan and met with Dr Akinwumi Adesina, President of the African Development Bank to discuss issues of regional integration.
Hichilema also attended the 12th African Land Forces summit in Livingstone, with the theme was ‘Regional Solutions to Transnational Problems’. The president addressed the gathering of leaders and military personnel as the Chair of the Organ on Politics, Defence and Security of SADC, where he stressed the importance of peace and security to economic growth on the continent.
OTHER NEWS
Zambia: Investment flows to return following $3bn restructure, says finance minister (The Africa Report)
How Gulf states are putting their money into mining (Financial Times, 01.04.24)
Zambia: The journey of building a retail chain for farmers (How We Made It In Africa, 03.04.24)
UPCOMING EVENTS
06-09.05.24 - US-Africa Business Summit, Dallas, Texas
07-11.05.24 - Africa Sustainable Trade Week Expo, London, UK
16-17.05.24 - Africa CEO Forum, Kigali, Rwanda
27-31.05.24 - African Development Bank Group’s Annual Meetings, Nairobi, Kenya
28.05.24 - Zambia-Netherlands Business Forum, The Hague, Netherlands