Zambia Starts Sale of $131 Million Stake in State Mining Company
Zambia, Africa’s second-biggest copper producer, began the sale of a 17 percent stake in its mining investment company that’s expected to fetch about one-billion kwacha ($131 million). An offer of about 27 million shares prioritizing Zambian investors opened Friday and closes Oct. 2, said Jimmy Mwambazi, corporate finance manager at Stockbrokers Zambia Ltd., which is managing the sale. (Read more)
ZCCM-IH (LuSE:ZCCM-IH) is a highly coveted stock to hold because it gives shareholders significant exposure to the mining industry in Zambia as well as exposure to other sectors – like energy and banking. The most bullish exposure they have is in energy through ownership of Maamba Collieries and Copperbelt Energy Corporation (LuSE:CEC). There is significant upside to be realized in those two companies because of the growth of the economies they operate in.
The company has also made some positive strides in fixing their corporate governance issues by appointing a minority shareholder to the board of directors. And new CEO Dr. Pius Kasolo also looks to have very strong credentials which could see ZCCM-IH taking a big step to the next level.
On the flipside, the copper mining sector (which they are heavily exposed to) is going through a tough period as global copper prices have dropped significantly over the last 3 year because of a slowdown in growth of the Chinese economy. Further price declines will continue to hurt the profitability of Zambian copper miners. And IF there is a change in presidency after the 2016 elections, there could be changes in leadership at the company (as the Government will still be majority owner after the sale-down).
Even though the Government has provided a K2 discount on the price of each ZCCM-IH share (from K40 to K38), there is a case to be made that the discount should be greater – perhaps in the 20s because of the company’s exposure to copper mining which is currently in a bear market and due to the fact that the Government desperately needs the funds. But there should still be enough demand to take up all the shares on offer at K38.
Treasury bill auction 16/2015 results
Mining companies agree to cut power consumption by 10 -15%
Zambian mining companies agreed to reduce their electricity consumption by as much as 15 percent to help ease a power shortage in Africa’s second-biggest copper producer. The local units of Glencore Plc, Vedanta Resources Plc and other operators reached the agreement with Mines Minister Christopher Yaluma and electricity supplier Copperbelt Energy Corp. at a meeting on Tuesday, according to the Chamber of Mines. Power cuts already enforced at projects run by First Quantum Minerals Ltd. and Barrick Gold Corp. will be reversed on Wednesday, said Jackson Sikamo, the president of the chamber. (Read more)
Maamba finalizes financing for $828m project
CRESCO Project Finance has achieved financial closure of Maamba Collieries Ltd’s fully integrated coal and power project in Zambia. The project consists of the redevelopment of an existing colliery and the construction of a 300 MW coal-fired thermal power plant (and related infrastructure). It will be located close to the town of Maamba and the cost of completion is approximately US$830 million. The key promoter is Nava Bharat (Singapore) Ltd, holding 65% of the equity stake in Maamba Collieries Ltd. The balance is held by the ZCCM Investments Holding.(Read more)
Fastjet set to begin operations before year-end
Fastjet CEO ED Winter says that he hopes the low cost airliner is set in time to start operations by the December holiday season. He added that the company would be the first low-cost airline in Zambia and would also be the first to fly an airbus on the local market. (KPR Consulting)
Yalelo Ltd set to invest $6 million in new feed plant
Yalelo Limited (Yalelo) has entered into a Memorandum of Understanding with the Chinese company Famsun Co. Ltd (Famsun) to supply a turn-key dedicated aquafeed mill Zambia. The total project investment of USD $6.0 million is expected to create over 75 high quality new jobs. (Read more)
Africa check report concludes that Zambia only holds 4.5% on Southern Africa’s freshwater
The claim that Zambia has 60% of the Southern African Development Community’s freshwater is completely false. If Zambia has 60% of the freshwater in the Southern African Development Community (SADC), why does it import fish from China? (Read more)
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *