Zambia: Hichilema continues push to get new capital into mines, Konkola next up

By Reuters
Posted on Tuesday, 7 June 2022 16:36

Zambia's President Hakainde Hichilema
Zambia's President Hakainde Hichilema in Glasgow, Scotland, Britain November 1, 2021. Andy Buchanan/Pool via REUTERS

Zambia President Hakainde Hichilema's push to bring fresh capital into the mining sector continues apace; after Mopani's First Quantum move, it is the turn of Konkola Copper Mines to receive the treatment.

Zambia’s Konkola Copper Mines (KCM) will appoint an adviser to help it find an equity investor willing to fund the mine’s expansion, its provisional liquidator said on Tuesday.

Zambia’s previous government put KCM into the hands of a liquidator in May 2019, triggering an ongoing legal dispute with Vedanta Resources, KCM’s parent company.

The government at that time accused Vedanta of failing to honour licence conditions, including promised investment, charges which Vedanta has denied.

The government takeover of KCM goes to an arbitration hearing in January 2023 in London, Zambia’s mines minister Paul Kabuswe said on June 1.

KCM provisional liquidator Celine Nair said in a statement that a strategic equity investor would be required to guarantee the development of the company’s $1.1 billion Konkola Deep Mining Project (KDMP).

Who will advise?

Firms invited to submit a proposal to act as adviser include international banks Citibank Investment Banking Group, Standard Bank, Bank of America Merrill Lynch, Rothschild, Rand Merchant Bank and InvestEcon, Nair said.

“The search for a strategic investor in Konkola Copper Mines has started in earnest,” Nair said.

Investment expected

Nair also announce the resumption of mining operations at a KCM open pit mine, saying the move was part of broader plans to improve operations before the government finds a new investor.

KCM plans to spend $17 million on an annual maintenance shutdown of the Nchanga Smelter, which has an annual capacity of 311,000 tonnes of copper, said Nair said, who also announced other measures to expand output in the Konkola East operation.

“We are looking at various options to improve production at KCM for the benefit of the company and the nation,” Nair said.

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