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Wednesday, 8 October 2008

Mining windfall tax in tatters, 3rd Edition

ZCCM-IH have now moved swiftly to deny rumours circulating that as part of the renegotiation, the government was ready to readjust the fiscal regime, if it's own 87 per cent owned Zambian Consolidated Copper Mines (ZCCM) started to receive meaningful dividends from its joint ventures :

Responses to various shareholder queries received in the recent past

1. We make reference to the concerns expressed by yourselves regarding the supposed intention, by ZCCM-IH, to dispose of a number of its shares in favour of Anglo American Corporation.

It must be understood, and we wish to make it very clear, that there is no such intention presently being considered by ZCCM-IH or Government, neither is there any desire or plan to do so in the future. Suffice it to say that even where there is a possibility of such a disposal of shares, corporate procedures, good faith and sound good governance, to which we adhere, would not permit us to embark on such a programme without first seeking approval of an Extra Ordinary General Meeting of which you would be part. In addition, transparency dictates that a decision to sell shares in ZCCM-IH would be subject to public notification and the regulatory scrutiny of both the Securities and Exchange Commission (SEC) and the Lusaka Stock Exchange (LuSE). It is our considered view that your interests in this regard are, therefore, more than secure.

2. In the meantime, we are pressing on, in cooperation with our consultants and external auditors, with the completion of the "Fair Value" of investments exercise and the finalization, for presentation by December 2008, of the overdue 2006 and 2007 Annual Reports. It is intended to present the 2008 Report by the close of March 2009.

3. We wish to point out that ZCCM-IH is in the process of diversifying its portfolio in order to effectively diffuse the risk associated with existing investments, in line with its Strategic Plan 2007 to 2010. Accordingly, ZCCM-IH is actively identifying investment opportunities in other sectors of the economy such as tourism, real estate and manufacturing. Of necessity, ZCCM-IH will require to selectively partner with other private investors by means of Private Public Partnerships (PPPs) to ensure the success of these investments.

Please be advised accordingly, in the circumstances.

W S Musama
Acting Chief Executive Officer

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