Lusaka, Zambia --- 09 October 2013 - The government of Zambia plans to reduce its majority ownership in the company that holds minority stakes in most of the country’s mines as it takes a further step back from an era of nationalisation.
“Zambia will probably cut its 87.6% stake in ZCCM Investment Holdings to less than 50%,” mines minister Christopher Yaluma said in a telephone interview with Bloomberg News from Kasama, 650km north-east of the capital. “The cabinet will decide on the size of the divestment,” he added.
“We are not looking back, but looking forward and getting the mining houses totally into private hands,” he said. “We have gone past nationalisation and we are not going back.”
ZCCM-IH holds minority stakes in the local units of Glencore Xstrata plc, First Quantum (FM) Minerals Limited and Vedanta Resources plc, following state asset sales that began in the 1990s. Zambia’s mines lost more than US$1 million a day under government ownership, according First Quantum, the country’s biggest copper producer. Output of the metal fell 65% to 263,000t from 1973 to 1997, before rebounding to more than 800,000t last year, according to Chamber of Mines figures.
ZCCM-IH chief financial officer Mabvuto Chipata declined to comment, referring questions to CEO Mukela Muyunda. Muyunda couldn’t be reached on his mobile phone outside normal business hours.
“ZCCM-IH plans to sell stock to existing shareholders to repay debt to the government and invest in new developments,” the Lusaka-based company said last week. “The state doesn’t intend to increase its ownership through the exercise,” it added.
Most minority shareholders own their stock through the NYSE Euronext in Paris, according to ZCCM-IH, which estimates the company’s asset value at US$387 million.
Source: Bloomberg News. For more information, click here.