Mining and Technical Exhibitions Expo Begins in Zambia
Foreign Brief, September 26, 2022
Zambia’s Mining and Technical Exhibition (MTE) begins today.
The MTE event takes place throughout Sub-Saharan Africa with the goal of introducing innovative technologies and developments in the mining sector to Zambia’s top mining companies like Konkola Copper Mines. Zambia is home to some of the world’s largest copper deposits and has smaller but exploitable cobalt, manganese and nickel deposits. Copper accounts for 60% of Zambia’s total exports. For years, investment has been hindered by inconsistent policies and unfavorable political conditions.
Image via First Quantum Minerals
First Quantum Minerals, a Canadian mining company, recently announced a $1.2-billion-dollar investment in Zambia’s Kansanshi copper mine, the largest such mine in Africa, indicating a trend towards more investment in Africa’s “Copper Belt” between Zambia and The Democratic Republic of Congo. With copper demand expected to grow as the renewable energy revolution continues and traditional producers, such as Chile and Peru facing greater political and regulatory uncertainty Zambia may come to the forefront as a viable source of copper.
Today’s exhibition where suppliers will showcase key products and innovative technologies that will be important for ramping up Zambia’s productive capacity by reducing costs to support major increases in output to support growing demand for copper cables and wires needed for electric vehicles, solar panels and other products for a global green economy transition.
Glencore Proposes Loans to Ensure Production at Mopani Copper Mine
Reuters, September 23, 2022
Glencore Plc and Zambia’s state-owned mining company ZCCM-IH could jointly lend Mopani Copper Mines $200 million to help cover running costs under a proposal made by the global miner last week, a letter seen by Reuters showed.
Glencore, which owned Mopani until March 2021, is prepared to lend up to $100 million as a short-term cash injection to Zambia’s Mopani copper mine, the global miner said in a Sept. 12 “non-binding letter of intent”.
Mopani Copper Mines is a large mine and smelter complex that Glencore sold to state mining investment firm ZCCM-IH in 2021 after drawing the ire of the Zambian government by putting it on care and maintenance in 2020 at a time of lower copper prices.
Switzerland-based Glencore however kept the exclusive right to sell Mopani’s production when it sold its majority stake in the asset to ZCCM-IH in a $1.5 billion deal funded by debt.
The more than 90-year-old mine has the potential to produce 225,000 tonnes of copper annually, nearly three times its expected 2022 production, Mopani Copper Mines officials have said, but it needs investment of at least $300 million to fund a complicated underground expansion.
With copper production falling and Mopani struggling to pay suppliers on time, ZCCM-IH in June hired investment bank Rothschild & Co for a strategic review that aims to find a new investor for the mine.
While Mopani waits for new investment, its production has fallen, making running costs increasingly hard to cover.
In the letter to Rothschild, Glencore said Mopani needs $200 million in “short-term liquidity”, and proposed to split that equally with ZCCM-IH. The cash would help Mopani cover general costs including buying reagents and paying workers and contractors, according to a source with knowledge of the letter.
Neither Glencore nor Rothschild commented on the contents of the letter, possible negotiations between the parties or progress of the strategic review.
Mopani Copper Mine - Image Courtesy of ZCCM Investment Holdings
ZCCM-IH declined to comment on the letter, saying only: “Rothschild… are looking at a range of expressions of interests and letters of intent from various stakeholders aimed at ensuring the sustainability, growth and profitability of Mopani.”
Zambia’s mines ministry did not respond to questions about the letter.
In the letter, Glencore said it has already lent Mopani $47 million through procuring letters of credit to cover copper concentrate purchases and electricity bills. Under the proposal, Glencore would provide up to $53 million more through letters of credit.
The proposal did not specify the interest rate for the loan.
Reuters reported in May that Glencore was helping to pay some of the company’s running costs, including electricity bills.
It is in Glencore’s interest for Mopani to keep producing because ZCCM is paying off its $1.5 billion debt to Glencore through Mopani’s copper.
Glencore would require $120 million worth of copper concentrates, anodes, and cathodes to be at the Mopani smelter or being transported to the border as a guarantee for its $100 million loan, according to the letter.
With future demand for copper expected to be strong due to the growth of electric vehicles, charging stations and other renewable energy infrastructure as the world seeks to decarbonise, Zambia sees expanding the mine as an opportunity to generate much-needed income.
Zambia to be a champion of nickel production in Africa-HH
Lusaka Times, July 27, 2022
President Hakainde Hichilema says the newly a US$250 million Enterprise Nickel mine project in Kalumbila district is important as it will provide raw materials for the production of electric motor vehicle batteries.
Mr Hichilema says development will also help the country make the vision of moving into a clean and environmental friendly nation a reality.
The President made the remarks when he officiated at the ground breaking ceremony for a project which is part of the US$1.35 billion expansion investment by First Quantum Minerals (FQM).
The project which will be the biggest nickel producer in Africa is expected to create about 18,000 direct and indirect jobs.
“The vision of Zambia moving from a brown energy to green energy is slowly becoming a reality with such projects coming on board,” Mr Hichilema said.
The head of state said the project will also create jobs and household income for the local people as well as generate revenue for the country adding that the revenue generated through taxes will be channeled to other needy areas such as procurement of desks and drugs.
” This project is important for our country, as it will create jobs for our people and food in homes, this is an important consideration for us when embarking on any project,” he said.
Mr Hichilema said there is need to create long lasting relationships between the community and investors because both parties are beneficiaries.
He said government will for this reason continue working with partners and investors in reducing poverty, creating jobs and income for the local people.
“We are ready to work with any and all that love progress to reduce poverty, create jobs and household income,” Mr Hichilema said.
Speaking earlier, FQM chief executive officer Tristan Pascal said Zambia continues to be a prime destination for investment owing to the conducive environment.
Once in full operation , the mine will produce 30,000 tonnes of nickel per year.
Mr Pascal said the nickel project will also provide about 430 megawatts of wind and solar energy in a few years to come.
And mines Minister, Paul Kabuswe said the mine project will make Zambia a champion of nickel production in Africa as the country will contribute to the growing demand of nickel for production of electric motor vehicle batteries.
Mr Kabuswe said government will ensure that any investment that comes to any part of the country uplifts the lives of the local people.
Northwestern province Minister Robert Lihefu said the nickel project will create many other opportunities apart from direct jobs.
Mr Lihefu said the coming of the project is in line with the United Party for National Development (UPND) manifesto on job creation and poverty eradication.
Ritam Holdings Plans $500m Investment
Zambia Daily Mail, July 12, 2022
RITAM Holdings, a South African holding company, will in the next three years invest US$500 million in various sectors of the economy, with a targeted 2,000 jobs for the local people.
This follows the good policies of the New Dawn government, particularly the ones encoded by President Hakainde Hichilema during the mining indaba in South Africa recently.
Mr Hichilema pledged Zambia’s active participation in Africa’s economic agenda through unlocking investment potential in the extractive industry.
He said to this effect, Zambia has started reforming its mining sector in order for the country to maximize its potential for economic development.
Key sectors covered up by the company include health, agriculture, mining, finance and energy.
The company has set up base in Lusaka and plans to acquire land and start building a multi-storey head office within 90 days.
Ritam Holdings chairman Mcebisi Mlonzi said: “As a South African diversified holdings company, we found it befitting to work in partnership with Zambia, given our southern African ties to strive to become Africa’s leading diversified industrial group, applying innovation, technology and resources to enhance the sustainability and development of human life.
“We will be launching a multi-sector investment in Zambia, this is off the successful partnership with Government on a hospital infrastructure project through one of Ritam Holdings subsidiaries, TFM. The success of the hospital has paved way for Ritam Holdings to strengthen its ties with Zambia by launching a multi-sector group of companies supported by investments that will exceed US$500 million over the next three years.”
Mr Mlonzi said in a statement yesterday that the broader vision for Zambia is to make a positive contribution to the economy by creating value, wealth, jobs and transferring skills.
Meanwhile, Ritam Ecomed Zambia chief executive officer Marius Smith said the goal of the firm is to be the first choice for medical equipment solutions, supported by innovative technology, quality and comprehensive range of products, among others.
Ritam Ecomed, a subsidiary of Ritam Holdings, is a flagship medical equipment supply, installation, commissioning, servicing, maintenance and training company that has partnered with Zambian-based healthcare company Kano Healthcare Solutions.
Under the partnership, Ritam Ecomed will provide solutions in the areas of intensive care units, theatres, maternity wards, general wards, trauma units, radiology, emergency medical services, homecare and pain management.
Copperbelt Business Groups Praise President HH’s Commitment To Mining Sector
Zambian Observer, June 14, 2022
Business groups and other stakeholders on the Copperbelt have praised President Hichilema for his commitment to the mining sector; in particular his pledge to unlock opportunities for local suppliers and contractors.
On Saturday, the President addressed a large crowd of residents at the Chaganamai grounds in Kitwe. During his speech, he reiterated the government’s commitment to unlocking opportunities at Konkola and Mopani Copper Mines in order to create local jobs.
The Zambia Association of Manufacturers (ZAM) described the news as “welcome”, saying that it was something local small and medium-sized enterprises had been looking forward to for some time.
ZAM President Ashu Sagar said the priority for the government should be to allow local contractors and suppliers to participate in mineral resource value chains. He observed that President Hichilema’s plans to resuscitate the Zambian economy chimed well with this.
In recent weeks the government has been working to unlock operations at the previously gridlocked Konkola Copper Mines and Mopani Mines. Last week, KCM’s provisional liquidator Celine Nair announced the mine would be appointing an adviser to held find a new equity investor willing to fund the mine’s expansion. She also announced the resumption of operations at KCM’s open pit mine.
At Mopani Mines, meanwhile, the government recently announced plans to resume cobalt production after it was halted more than a decade ago. The move will help Zambia capitalise on the accelerating market for electric vehicle batteries, in which cobalt is a vital resource.
In Saturday’s speech, President Hichilema also announced that the government was prioritising works on the Ndola-Mufulira and Chingola-Chililabombwe-Kasumbalesa roads. Mr Sagar similarly described this as a positive step, with the roads providing key infrastructure to enhance trade between Zambia and the Democratic Republic of Congo.
“As a manufacturing sector, we rely on these border posts to take our goods to Congo which is one of the major markets, I think this is a very welcome move by the President that we have the roads worked on, as soon as possible,” he said.
Anglo American to Return to Zambia with Arc Minerals Copper Deal
Reuters, May 12, 2022
Anglo American returns to Zambia with copper deal
CAPE TOWN, May 12 (Reuters) - Arc Minerals (ARCMA.L)shares jumped 6.7% on Thursday after it announced an agreement under which Anglo American (AAL.L) would take majority control of the junior exploration firm's Zambia copper-cobalt licences.
Under the deal, which was first reported by Reuters, Anglo will take 70% of a joint venture with Arc that will own licenses to explore Zambia's copper-rich North-Western province, an area Anglo previously explored in the late 1990s. It would mark the first new investment by Anglo in Zambia in 20 years.
Major mining firms are searching for new sources of the battery metals copper and cobalt, especially following the war in Ukraine and sanctions on Russia which have sent metal prices soaring.
Anglo American will pay $3.5 million into Arc upon signing. It will be able to retain its stake by spending $74 million on exploration within seven years of signing and making cash payments of $11 million to Arc, according to terms of the deal.
Arc Minerals previously had an exclusivity agreement with Anglo from July 2020 to July 2021, and when that lapsed Arc Minerals said it would start talks with other major miners which had approached it.
Zambia, Africa's second-largest copper producer, has become a more attractive investment proposition for mining companies since the election last August of business-friendly President Hakainde Hichilema and a subsequent mining tax reform.
The country aims to more than triple its annual copper output within the next decade to 3 million tonnes a year.
First Quantum Minerals last Sunday said its board had approved plans for a $1.25 billion expansion of its Kansanshi mine in Zambia, a decision it said was prompted by renewed confidence in Zambia's investment climate.
Image via Reuters
President of Zambia and President of Botswana to Attend Mining Indaba 2022
Global Mining Review, March 2, 2022
Investing in African Mining Indaba has announced that the President of the Republic of Zambia and the President of the Botswana, Dr Mokgweetsi Eric Keabetswe Masisi, have confirmed their attendance at Investing in African Mining Indaba, taking place in Cape Town from 9 – 12 May 2022.
Newly elected President Hichilema, who was inaugurated in August 2021, has been hailed as an inspiration after he reversed his fortunes – having been imprisoned for 127 days after the 2016 elections he went on to secure a landslide victory in the 2021 polls.
Now the seventh president of Zambia, President Hichilema has pledged to foster a better democracy through respect for the rule of law, restoring order and protecting human rights. He also hopes to restore confidence in the country as a mining investment destination.
Zambia’s mining investment climate deteriorated in recent years as the previous administration pursued resource nationalism, leading to damaged relationships with investors and lower levels of investment. According to the the Zambia Extractive Industries Transparency Initiative, mining accounted for 79.5% of Zambia's total exports and nearly 31.4% of government revenues in 2020.
President Hichilema is expected to share his vision of a new dawn for Zambia, in which macroeconomic stability is restored and sustainable, inclusive economic growth is promoted. Believing that the mining sector can be an important catalyst for national development, his government is looking to significantly increase the production of copper and other minerals so that Zambia can reclaim its place as a leading miner on the continent. To support these ambitions President Hichilema has already introduced a friendlier mining tax regime and made clear his intention to bring stability to the sector, as well as ensuring regulatory fairness and the elimination of obstacles that stand in the way of new investment.
The President believes that stronger relationships – between the government, miners and local communities – will improve equitable growth and help the country to deliver for its citizens.
Mining remains Botswana’s biggest revenue earner, accounting for approximately 85% of national foreign exchange earnings, one-third of government revenue, and one-fifth of GDP. In recent years the government has actively sought to diversify its economy from its reliance on mining, particularly diamonds.
While Botswana continues to be one of the world’s largest diamond producers by volume, President Masisi has been actively advocating for expansion and development of the country’s diamond, coal, copper, silver and gold resources. He is also encouraging greater investment in a knowledge-based economy and the adoption of innovation in mining.
Building on the Mining Indaba 2022’s theme – Evolution of African Mining – the President is expected to share his insights on Botswana’s progress and his ambition to develop a vibrant and diversified mineral sector that contributes to the sustainable development of the Botswana economy in an inclusive manner that allows for the participation of local indigenous business. The government of Botswana wants to ensure that investments in its economy offer mutually beneficial upside to both the investor and local partners.
Facilitating greater local participation in the economy led to the launch of the government’s Middle Income Strategy in December 2021. The objective the strategy is to facilitate the middle class to effectively participate in the economy through the creation of globally competitive sustainable businesses and by boosting employment opportunities.
After the virtual event in 2021, the May 2022 Mining Indaba is back in person and is looking at the future, at moving forward. The programme content for 2022 is geared towards exploring the key drivers of investment decisions within the African mining market and forging the future direction of the African mining industry. A significant platform for over 27 years, the Indaba will this year expand its industry-leading content to include a Green Metals Day, a Host Buyer Programme and an Infrastructure & Supply Chain content stream. The investment battlefield has also been reimagined as the Innovation & Research Battlefield to encourage collaboration between the mining industry and academia.
The overarching theme: ‘Evolution of African Mining: Investing in the Energy Transition, ESG and the Economies’ is set to inspire new approaches, spark conversations and encourage partnerships that will truly transform mining on the continent.
Image: Sebastian Pichler via Unslpash