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Friday, 1 November 2013

Bye, Bye ZCCM-IH!

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.

AUTHOR
Chola Mukanga | Economist
Copyright © Zambian Economist 2013

6 comments:

  1. The Post wrote “ there is something seriously amiss here; there is something stinking here. Is this a product of oversight, incompetence or outright corruption? “ about Chikwanda and First Quantum dealings

    It is exactly the same with ZCCM-IH....

    It is well known that the corruption of Frederick Chiluba's 10-year-rule was a joke when compared with the theft of public resources in just three years of Banda's government.

    The question is : How many months will Sata's govt need to beat Banda's record ?

    ReplyDelete
  2. a comparison with the Congolese Gecamines would be interesting....

    ReplyDelete
  3. Hi Cho,

    Sorry for not replying earlier, but I'm still using Windows 98 and only IE still posts, with workarounds. (I have Vista, but 98 just works better.)

    The problem is that ZCCM-IH is deeply corrupt. If you look at who the directors are - Situmbeko Musokotwane, Godfrey Beene, etc., they are complete shills for the mining industry.

    This is why ZCCM-IH has received no dividend payments, and the one time they received $18 million, which is nothing, they couldn't fall all over themselves quickly enough to give it back.

    This is daylight robbery. Perhaps parliament should own ZCCM-IH. Not that they are free of corruption, but more eyes on the money and proceedings would do a lot to increase transparancy.

    Maybe they should transfer their local mine ownership (KCM, MCM, etc.) into stock of Glencore, Equinox, etc. Maybe they do pay out to their shareholders. If they were honest, they could even add unpaid taxes and dividends from previous years to increase their ownership of Glencore and similar stock.

    Glencore Xstrata PLC has a history of dividend payments. So does Vedanta Resources.

    Why not ZCCM-IH?

    ReplyDelete
    Replies
    1. Wow! Unfortunately MrK, you have no idea what you're talking about. I won't even go too far, but Situmbeko Musokotwane and Godfrey Beene are not Directors on the ZCCM-IH Board. Let alone the info you have on dividend payments. Wow...

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    2. Situmbeko Musokotwane is no longer director of ZCCM-IH but he was indeed a former one, with all that is involved...

      Delete
  4. MrK

    The former directors have been removed but the new ones are no better. the current chairman Wila Mung'Omba is even worse...


    DIRECTORS
    The Directors who left office during the period to 31 March 2012 were:
    Mr. A J Lungu Chairman of the Board, Non-Executive -retired November 2011
    Mr L Ndalamei Retired October 2011
    Dr. G M Beene Retired October 2011
    Mr. T J Kasonso Retired November 2011
    Dr A.Mwape Retired October 2011
    Mrs. P C Banda Retired October 2012
    Mr. O B Munyenyembe Deceased February 2012

    The Directors who held office as at the date of approval of this report (13th March 2013) were:
    Mr. W D Mung’omba Appointed 1 December 2011 (Executive Chairman)
    Mr. J M D Patterson Appointed 13 February 2012 (Non-executive Director)
    Mr. C Mwananshiku Appointed 13 February 2012 “
    Ms. S Mutemba Appointed 13 February 2012 “
    Dr. A Mwenda Appointed 13 February 2012 Retired 30 June 2012
    Dr. V Mutambo Appointed 13 February 2012 (Non-executive Director)
    Dr. B K E Ng’andu Appointed 2 April 2012 (Non-executive Director)
    Mrs. P C Kabamba Appointed 15 January 2013 (Non –executive Director)

    ReplyDelete

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