Zambia ready to allow potential owners of Equinox Minerals
Zambia, Africa’s leading producer, against criticism over the need to retain shares in the mining industry, is ready to allow potential owners of Equinox Minerals, Canada renowned miner, Barrick Gold acquire 100% stake in the company owners of Lumwana Copper unit in Zambia.
The Southern African nation said that with the liberalization of the Zambian economy, the government would not stop anyone bidding to acquire or bid for any ownership in a particular company or industry as a free market dictates.
Mr Maxwell Mwale mines minister of Zambia said that government would follow the dictates of the free market economy and cannot stop Barrick Gold Corporation’s proposal to acquire 100% in Equinox Minerals, owner of Lumwana Mining Company located in north western Zambia if the company wanted to.
Last April, Equinox Minerals Plc announced its plans with Barrick Gold Corporation, pursuant to which Barrick has agreed, subject to the terms of a support agreement, to make an offer to purchase all outstanding common shares of Equinox by way of negotiated take over bid.
In turn Barrick Gold was agreeable and commenced its offer to acquire the Equinox common shares on April 26, 2011 after the agreement a day earlier. The board of Equinox Minerals unanimously recommended that Equinox shareholders accept the Barrick offer and deposit their shares under the offer for USD 7.7 billion.
Zambia’s Consumer Protection Commission recently stated that that it was studying the proposal by Barrick Gold for its USD 7.7 billion takeover of Equinox Minerals which built its prime asset, Lumwana Mining Company which has gobbled about USD 1 billion since inception more than 4 years ago.
According to Zambia’s consumer protection spokesperson, Brian Lingela the competition agency received an application which was under consideration over intentions by Barrick Gold to acquire Equinox Minerals describing it the biggest transaction in the country’s mining history. According to the Zambian laws, the competition agency has to within 90 days from the date of application accept or deny the offer made by respective companies for take overs and other acquisitions.
Mr Mwale said that the market forces would be allowed to prevail in the matter and dictate the economic development of all sectors including mining. There will always be some forces at play just like you are free to bid for any company you like.
Investigations by the competition agency revealed that it was carrying out a number of assessment tests to establish whether the transaction was likely to result in negative effects in the mining sector to the consumer, fair trade and the economy in general.
Barrick is a Canadian-based company, a global leader in gold mining and in terms of production, reserves and market capitalization. It operates gold and copper mines in Canada, United States of America, Peru and Chile among other mining countries.
And a report, recently released by Equinox Minerals technical team revealed that the company has been updated in status to reflect and support the proposed expansion of the processing plant at Lumwana to a processing capacity of 45 million tonnes per year. The also further contains an exploration target developed based on 2010 drilling results, previously been disclosed by Equinox last February.
Equinox used the exploration target for pit optimization studies at a long term copper price of USD 2.50 per pound which indicates that a mineral inventory of 1.0 to 1.5 billion tonnes at 0.6% copper could be realized when further drilling is completed.
Recently an opposition lawmaker, Mr Wilbur Simuusa argued that it would be unfair for government to ignore the interests of the minority shareholders in the Lumwans Copper Mine, through Equinox Resources, the sole owners of the project in allowing them retain their equity.
Mr Simuusa argued that under the recent government proposals it was felt that the Zambian government would retain 35 percent shares in all mining related activities to avoid job losses and unplanned closures of mining companies to safeguard jobs for Zambians.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)