Zambia Investor Briefing: October 2023

Investor Briefing

8 Nov

OVERVIEW

• On 26 October, in a huge milestone in the country’s debt restructuring process, Zambia announced it had reached an agreement in principle regarding the restructuring of $3 billion of its international bonds with key creditors. Finance Minister Situmbeko Musokotwane said in a statement the agreement “paves the way for similar restructuring agreements with our private creditors”. Earlier this month, the country had also agreed to a Memorandum of Understanding (MoU) with its official creditors – which includes China and members of the Paris Club – to restructure $6.3 billion of debt.

• Abu Dhabi’s International Holding Company (IHC) has signalled its interest in Mopani Copper Mines. Zambia’s state-owned investment vehicle Zambia Consolidated Copper Mines (ZCCM) took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5bn.

• The African Development Bank (AfDB) and Africa Finance Corporation (AFC) have recently joined the US and EU in support of the development of the Lobito Corridor, a trans-African railway line connecting Zambia and the DRC to regional and global markets through the port of Lobito on Angola’s west coast. A seven-side Memorandum of Understanding was signed regarding this on the margins of the Global Gateway Forum in Brussels.

• Barrick Gold has pledged an investment of nearly $2 billion in a bid to increase copper production at its Lumwana mine to a projected 240,000 tonnes. The company, which has previously announced plans to explore more copper deposits along the African Copperbelt, has announced it hopes to extend the life of the Lumwana mine to 2060. Barrick’s President and Chief Executive Mark Bristow said: “In Zambia as elsewhere in our global network, we seek to share the economic benefits generated by our mines with the countries’ governments and people”.

• Zambia has officially become the sixth country to receive SpaceX’s Starlink internet service, providing high-speed broadband and uncapped service to even remote regions of the country via satellite. President Hichilema had originally opened talks with Starlink in 2022. It is currently available in the country in specific areas, but the company plans to expand its coverage in the coming months.

• President Hichilema attended the Zambia-China Jiangxi Investment and Trade Cooperation Promotion Conference in Chibombo District. There, he also commissioned the Chibombo Jiangxi Economic Cooperation Zone. The conference follows a month on from the president’s state visit to the People’s Republic of China, where he signed several MoUs to further cement the trade and investment partnership between the two countries.

• President Hichilema, along with Mozambican President Felipe Nyusi and Malawi’s Lazarus Chakwera, have signed three agreements for the management of the Nacala Corridor in Mozambique. The agreements, aimed at strengthening the corridor’s operations strengthening the region’s development, were signed at the inauguration ceremony of the rehabilitated, expanded, and modernised infrastructures of Nacala Port. The rail corridor runs from the port of Nacala to the landlocked Malawi and Zambia, and will provide Zambian businesses with a shorter and more efficient trade route.

• President Hichilema hosted a delegation from K.E. International Consortium, an organisation that consults on large-scale renewable and sustainable projects and business development and is interested in creating Public-Private Partnership (PPP) projects with Zambia. The organisation’s areas of interest include infrastructure development, electric vehicle battery production, and renewable energy work to agriculture and agro-processing.

Zambia Reaches Deal for Debt Relief

On 26 October, Zambia announced it has reached an agreement in principle regarding the restructuring of $3 billion of its international bonds with key creditors – a huge milestone in the country’s debt restructure process. The deal is a set to provide $2.5 billion of cash-flow relief during the country’s $1.3 billion IMF programme which expires in 2025.

Finance Minister Situmbeko Musokotwane said in statement the agreement “paves the way for similar restructuring agreements with our private creditors”. The Zambia External Bondholder Steering Committee also welcomed the agreement, saying it would “restore full international capital markets access to Zambia and encourage long-term investment in the country”.

This announcement followed news earlier in the month that the country had agreed to a Memorandum of Understanding (MoU) with its bilateral creditors – including China and members of the Paris Club – to restructure $6.3 billion of debt. The agreements mean Zambia will pay about $910 million in the next decade, compared to almost $6 billion that was due to official creditors before the debt restructuring process.

UAE’s IHC Expresses Interest in Mopani Copper Mines

Abu Dhabi’s International Holding Company (IHC) has signalled its interest in Mopani Copper Mines. Zambia’s state-owned investment vehicle Zambia Consolidated Copper Mines (ZCCM) took control of Mopani Copper Mines back in 2021, after global commodities powerhouse Glencore sold its stake for $1.5 billion.

IHC has now emerged as the newest outfit looking to invest in Mopani. Its main competitor for the bid is South Africa’s Sibanye-Stillwater, since two Chinese corporations, Zijin Mining and Norinco, pulled out of the process.

Mopani is one of Zambia’s largest assets. President Hichilema has placed specific emphasis on copper production, setting an ambitious target of producing over three million tonnes of copper nationally by 2032. His recognition of copper’s significance has played a major part in the renewed interest of external investors in Zambia.

OTHER NEWS

Coal miner Exxaro hunts for copper assets in Congo, Zambia and Botswana 04.10.23, Reuters

Sibanye CEO says Zambia’s Mopani Copper Mines investment not ‘onerous’ 04.10.23, Reuters

Zambia plans to sell a green bond, regulate carbon credits 06.10.23, Bloomberg

South Africa: Minister Pandor undertakes working visit to Zambia 20.10.23, African Business

EU courts Africa in early push to counter Chinese spending 25.10.23, Bloomberg

As critical minerals gain importance, Standard bank eyes investment in DRC and Zambia 26.10.23, Arican Business

Anglo, Arc agree $90m Zambia exploration joint venture 27.10.23, Mining Weekly

UPCOMING EVENTS

Zambia International Mining + Energy Conference 01-2.11.23, Kitwe, Zambia

Africa Fintech Summit - 02-03.11.23, Lusaka, Zambia

Intra-African Trade Fair - 09-15.11.23, Cairo, Egypt