Konkola Copper Mines will appoint an adviser to help it find an equity investor willing to fund the mine’s expansion, its provisional liquidator has said.
Zambia’s previous government put KCM into the hands of a liquidator in May 2019, triggering an ongoing legal dispute with Vedanta Resources, KCM’s parent company.
The government at that time accused Vedanta of failing to honour licence conditions, including promised investment, charges which Vedanta has denied.
The government takeover of KCM goes to an arbitration hearing in January 2023 in London, Zambia’s mines minister Paul Kabuswe said on June 1.
KCM provisional liquidator Celine Nair said in a statement that a strategic equity investor would be required to guarantee the development of the company’s $1.1-billion Konkola Deep Mining Project (KDMP).
Firms invited to submit a proposal to act as adviser include international banks Citibank Investment Banking Group, Standard Bank, Bank of America Merrill Lynch, Rothschild, Rand Merchant Bank and InvestEcon, Ms. Nair said.
“The search for a strategic investor in Konkola Copper Mines has started in earnest,” she said.
Ms. Nair also announced the resumption of mining operations at a KCM open pit mine, saying the move was part of broader plans to improve operations before the government finds a new investor.
KCM plans to spend $17-million on an annual maintenance shutdown of the Nchanga Smelter, which has an annual capacity of 311,000 tonnes of copper, said Ms. Nair said, who also announced other measures to expand output in the Konkola East operation.
“We are looking at various options to improve production at KCM for the benefit of the company and the nation,” Ms. Nair said.
Below is Ms. Nair’s statement
KCM Provisional Liquidator Update on Company Operations
Konkola Copper Mines – KCM Konkola Copper Mines (KCM) Provisional Liquidator Celine Nair says mining operations at the COP F&D open pit in Chingola has resumed.
The move is part of broader plans to improve KCM operations before the government finds a new investor.
Ms Nair, who is Administrator General and Official Receiver of the Government of Zambia, unveiled a plan through which KCM also seeks to spend $17 million to carry out an annual maintenance shutdown of the Nchanga Smelter.
She said the amount is also to take up other measures to expand production in the Konkola East operation in order to boost overall KCM total copper production which has a 311,000 tonnes annual production capacity.
Ms Nair said that KCM is working closely with the Government to ensure the sustainability of operations until a new investor take over the running of the Company.
“There are major restoration projects that we are currently initiating in KCM such as the Chingola Open Pits (COP F&D) project,” Ms Nair said in reference to the operations where KCM is currently stripping waste ahead of mining of ore for the first time since 2018. Initial copper ore production at COP F&D is planned at 70,000 tonnes per month by July before ramping up to 120,000 tonnes in August.
She said the company is looking at various options to improve production at KCM for the benefit of the Company and the nation.
The Provisional Liquidator said KCM was also seeking ways to lift production at the Tailings Leach Plant (TLP) at Nchanga in Chingola from the current average of 2,560 tonnes primary copper per month to 3,000 tonnes and eventually 3,500 tonnes through upgrades to the plant.
Ms Nair said KCM will focus on short term mining projects, which require minimal funding to increase copper production, and these include a migration of reclamation from Tailings Dam 3 to Tailings Dam 4, and medium-term projects including Elevated Temperature Leaching at the TLP in Nchanga, the Nchanga Smelter Copper-Cobalt separation, and improvements to Nchanga Underground Block A upper and Chingola B, among others.
She also gave an update on the search for a new investor in KCM, saying: “In line with the New Dawn government’s pledge to ramp up Zambia’s copper production in the long term and find a long-lasting solution to the mining sector’s challenges, the search for a strategic investor in Konkola Copper Mines has started in earnest.”
KCM has invited a selection of local and international firms to respond to a request for proposal for the selection of an investment banker that will source a strategic equity investor that will, amongst others, guarantee the development of the USD $1.1 billion Konkola Deep Mining Project (KDMP), she said.
The international firms invited include Citibank Investment Banking Group, Standard Bank, Bank of America Merril Lynch, Rothschild, Rand Merchant Bank and InvestEcon, while the local firms invited include Pangaea Securities, Stockbrokers Zambia, E-Ngoma and ZANACO Bank.
The Provisional Liquidator said KCM would not neglect its responsibility as a corporate entity with focus on ensuring employment sustainability for all the employees and assisting communities around its mining areas even in the current circumstances.
Ms Nair said KCM would prioritise future business transactions with local companies in order to help with the growth of Small and Medium Enterprises (SMEs).
“Our desire is to fulfill the ‘start with Jerusalem first’ before you look anywhere else business concept,” she said. Of the $300 million annual business transactions between KCM and its vendors, about 82% or $246 million is awarded to Zambian registered companies and the balance to foreign vendors. Currently, 71% of vendors doing business with KCM are local contractors and suppliers.