Message Dim 19 Juin 2011 11:35

Lumwana mine acquisition of 2% shares in ZCCM IH by Barrick

Lumwana mine acquisition of 2pct shares in ZCCM IH by Barrick
Sunday, 19 Jun 2011

The disposal of 2.28% shares by Zambia Consolidated Copper Mines Investment Holdings in Equinox Minerals Limited owned subsidiary Lumwana Copper Mines was mandatory to facilitate the disposal of the unit to new owners, Barrick Gold of Canda.

Mr Adam Wright MD of Lumwana Copper Mines said had the ZCCM IH holdings failed to comply to the disposal of the equity in Lumwana for USD 160 million the transaction would have been null and void.

Mr Wright said that the disposal of the equity in the mine was inevitable to ensure the transaction was successful as demanded by law. They had no option other that sale off their shares in Lumwana Mine otherwise the deal would have fallen through according to the terms of the transaction.

ZCCM IH, a unit of government tasked to privatize the mines; formerly under the Zambia Consolidated Copper Mines conglomerate recently offloaded its 2.28% shares owned in Lumwana mine, a unit of Toronto listed Equinox Minerals Limited. This was despite an appeal by Zambia’s anti trust agency, the competition commission that the company retains the equity as a measure to ensure that minority shareholders could make decision later.

Recently Mines minister Maxwell Mwale stated that it was government’s desire to retain at least 25% to 35% shares in all mines in the country as a measure to ensure some control and avert loss of jobs by miners in the event of a certain unit closing down for various reasons including bankruptcy.

And making a presentation during the conference in Lusaka, the sale of Equinox Minerals Limited and its 100% owned Greenfield open cast mine, Lumwana in north western Zambia USD 7.7 billion to Canada’s Barrick Gold had raised hopes for the growth of the company.

Mr Wright stated that was likely to expand Lumwana its operations than previously planned before the sale to Barrick Gold after it was bought off by leading gold and diversified miner Barrick Gold acquired it recently amid outcry from various several Zambian interest groups over the disposal of 2.28% stake.

Accordingly the company had before the transaction planned to undertake another feasibility study intended to increase the mine’s capacity and produce more copper than the recent 147,000 tonnes of copper concentrates that was realized from the mining activities at the unit and double the size. The company is presently evaluating the mineral potential at its newly discovered Chimuwingo site where drilling has started to ascertain the ore deposits.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
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