An important recent report which has not had much discussion. The Government recently announced that it plans to cede control of ZCCM-IH. Mines Minister Chris Yaluma says that Cabinet will decide on the size of the divestment and that go is to give up control : “We are not looking back, but looking forward and getting the mining houses TOTALLY into private hands...We have gone past nationalisation and we are not going back.” (Source: Bloomberg)
Government currently owns about 87.6% of ZCCM-IH which in turn owns miniority shares in a number of mining houses. Yaluma’s statement suggests not merely a reduction to shares in ZCCM-IH below 50% as some have suggested, but potentially completely selling its shares and allow individuals (most of them likely to be foreigners) to purchase shares in ZCCM-IH. This is very consistent with a similar statement he gave Metal Bulletin.
The picture with ZCCM is currently very confusing. It is not clear how Government plans to do this. ZCCM-IH, effectively owned by Government, currently on paper owes Government substantial amounts of money following the privatisation exercise. It recently announced plans to sell stock to existing shareholders (including Government) to repay debt to Government and invest in new developments. It suggested that Government did not intend to increase its ownership through the exercise.
Most minority shareholders own their stock through the NYSE Euronext in Paris, according to ZCCM-IH. An independent company completed a valuation of the in September, and is yet to announce the results of the exercise.
Chola Mukanga | Economist
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