Zambia unclear over proceeds from sale of 2pct stake
Wednesday 02 Nov, 2011Mystery surrounds the whereabouts of the revenue realized from Zambia’s sale of more than 2% equity previously held in Lumwana Mine in Northwestern province mid this year to Australian miner, Barick Gold.
The Greenfield mine, previously owned by Equinox Minerals and recently sold to Canadian miner, Barrick Gold for a value of USD 167.5 million was until mid 2011 2.28% owned by Zambia Consolidated Copper Mines Investment Holdings on behalf of the government.
According to the Zambian government, money realized from the sale of the 2.28% equity valued at USD 167.5 million cannot be traced. The 2.28% shares were held in the company on behalf of the Zambians.
Mr Wilbur Simuusa mines minister of Zambia argues that the Barrick Gold cash out cannot be traced and efforts to get details on the transactions prompting government to wonder what it could have been used for. I can safely say it is missing because constant calls I have made for a report regarding how the money has been used or what is remaining have not been heeded up to now.
Mr Simuusa could not be independently contacted on the matter, though he told is quoted by local media as saying. The government has since given Zambia Consolidate Copper Mines Investment Holdings one week in which to appraise government on the transactions which concluded just under five months ago before the September 20th 2011 elections. This money belongs to Zambians. It ought to be accounted for.
On 1 June this year ZCCM-IH issued a statement in which it stated that after considerations its board had accepted the offer from Barrick Gold to sell its 2.28% stake in LMC to Barrack Gold, the largest gold miner in the world at USD 167.5 million.
The Zambia’s antitrust agency Zambia Consumer Competition Commission had on 27 May approved the sale conditional that it kept all obligations the mines had previously before the sale including all contracts. However if the money was traced it would have been used in among other projects recapitalizing Ndola Lime, Maamba Collieries and Konkola North Copper including the repayment of ZCCM IH loans. The government had also envisioned to use part of the money in exploration of oil and gas and for investing in Greenfields and diversification projects.
Mr Mukela Muyunda CEO of ZCCM IH and while company secretary Mr Chabby Chabala could be reached for a comment immediately. However, sources within ZCCM IH said it would be difficult for anyone at the ZCCM IH subsidiary to categorically say anything because of the market-sensitivity and that shareholders of ZCCM IH needed to be informed first before information could be divulged to the public.
A source close to the company said that ZCCM IH is listed both on the London and Lusaka Stock Exchange and so by listing rules, one can come out and say anything on the transaction. ZCCM IH is quoted on both Lusaka and London Bourses although shares are quoted and not listed.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)