Muf, Nkana mines sold First Quantum clinches record deal
Times of Zambia By ASTON KUSEKA
A CONSORTIUM of First Quantum Minerals Limited of Canada and Glencore
International AG of Switzerland has
bought Mufulira and Nkana mines in a record deal that almost concludes
the privatisation of Zambia's mines.
Finance Minister Katele Kalumba, Zambia Consolidated Copper Mines (ZCCM)
chairman Shalaulwa Shimukowa, First
Quantum president Clive Newall and Glencore business development officer
Steven Isaacs signed the sale agreement in
Lusaka yesterday.
Following the sale, the new owners would assume 90 per cent interests in
the two mines through a new company called
Mopani Copper Mines (MCM) while Government would retain 10 per cent
"golden shares" through its new non-mining
ZCCM Investment Holdings Company.
"This ceremony marks an important stage in the conclusion of the ZCCM
privatisation programme. Due to the strategic
importance of these assets to the Zambian economy, Government will hold
a special share which will provide certain
rights exercisable in the national interest," Dr Kalumba said.
Commercial terms of the agreement include a $20 million cash
consideration at close of sale, $23 million deferred cash
payments payable in five equal annual instalments beginning 2003.
The terms also included a copper price participation calculable at two
per cent of the excess of copper price over and
above 85 cents per pound payable for five years beginning in 2003 and
pegged at $4.4 million per year.
MCM would make investment commitments of up to $343 million dependent on
some unspecified defined conditions.
MCM would also assume the accrued terminal benefits for the employees it
would retain.
An already negotiated development agreement included human resources and
local business development programmes
and the enabling fiscal and environmental regimes under which MCM would
operate.
Taxation concessions and stabilisation for MCM were in line with those
provided to other privatised firms and were
aimed at the global trend of encouraging investment and providing for
reasonable investment returns.
The Mining and Metal Treatment Operations Programme forecasts that by
2003, the combined production by MCM
would be in the range of 130,000 tonnes of copper per annum and 2,200
tonnes of cobalt over the 1998 levels of 75,385
and 1,354 tonnes respectively.
"It is our sincere expectation that the successful completion of these
transactions will lead to major developments in the
country's mining industry and the economy in general, to the benefit of
the Zambian people," Dr Kalumba said.
Mr Newall whose high-profile firm First Quantum had acquired Ndola's
Bwana Mkubwa Mine, said the MCM success
would attract a lot of other investment from Canada rated as the world's
largest source of mining finance.
He said the Zambian Government had exhibited rare boldness and readiness
to take action and make difficult decisions
which MCM was ready to support.
"There is no question that we will encounter difficulties along the way
but we are here for the long term. To succeed, we
need the cooperation and assistance of the workforce to introduce new
technology, management and working practices.
Meanwhile, the MCM has been warmly welcomed as serious-minded and humane
investors who had the interests of all
the stakeholders like workers, the community, the shareholders and the
nation at heart.
In separate interviews, Mines Minister Kaunda Lembalemba, his Copperbelt
counterpart Mathew Mulanda said First
Quantum were serious minded investors.
Mineworkers Union of Zambia (MUZ) president Andrew Mwanza and Zambia
Federation of Employers (ZFE) president
Samuel Musonda all hailed MCM as credible investors. |
