Maamba Collieries Set For Revival

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Inscription: Jeu 14 Mai 2009 16:23

Message Mer 14 Mar 2012 17:13

Maamba Collieries Set For Revival

Maamba Collieries Set For Revival
By Maimbolwa Mulikelela
http://www.times.co.zm/?p=1168

ALMOST 40 years of operating an open cast coal mine in the Southern region of Zambia, Maamba Collieries Limited (MCL) under the newManagement Nava Bharat of Singapore, is set to revive its coal mine using morden and scientific mining methods.

Though, the mine operated profitably until 1994, reduced production levels, worn out equipment and machinery added to increased mining stripping percentages and subsequently weighed down operations.

In addition, owing to constraints of funds for capital expenditure and working capital affecting mining operations, supplies and quality, thefirm lost its pre-eminence as the principal coal supplier resulting in Zambia falling back on imports of coal to meet the local industryneeds.

It is against this background that, Nava Bharat of Singapore acquire 60 per cent equity stake from Zambia Consolidated Copper Mine Investment Holdings (ZCCM-IH) in April 2010 through the privatisation process to usher in a sense of confidence to the stakeholders and thecommunity.

This meant that, the new management had its tasks cut out clearly aimed at revival of the coal mining operations in an organised and scientific mining plan to optimise productivity of both grades of coal and obtain a tangible value addition for the thermal grade coal through power generation.

Owing to the huge liabilities, liability management was undertaken without impacting on the coal mine revival plan and preparation for a thermal power plant which was taken up with requisite focus and vigour by MCL, actively aided by infusion of funds amounting to US$26.1million to address the long outstanding dues.

Consequently, up to November 30, 2011, Nava Bharat and ZCCM-IH invested US$44.16 million and US$5.25 million respectively.The funds were utilised for capital expenditure for the integrated coal and power project, mine operations and for cleaning of Voluntary EarlySeparation Scheme (VESS) payments of MCL.

In order for the firm to be sustainable, the investor proposed that the total capital out lay of US$ 700 million is met by a combinationof long term debt from the Development Financial Institutions and commercial banks aggregating to US$500 million and equity amounting toUS$250 million. Under the recapitalisation plan, MCL plans to invest a total of $50 million for the revival of the coal mine which is set to be the largest producer of coal in the region.

Further, MCL will invest a total of US$700 million to establish the 300 megawatts (MW) thermal power plant in phase one, the first of its kind in Zambia. Both the sponsors, Nava Bharat and ZCCM-IH have committed their financial and managerial support to the integrated coal power plant project of MCL, not only for the first phase of 300 MW but also for the second phase of another 300MW of power generation.

Experts in the financial markets have noted that given the world financial markets that are under stress, syndication of the long termdebt was likely to take considerable time.

But sponsors of MCL have therefore decided and obtained an interimfinance and standby finance facilities by extending recourse tocommercial banks to enable MCL to launch the thermal power project andkeep up the peace of project implementation.

To this effect, the EPC Contractor, Shandong Electric PowerConstruction Corporation (SEPCO), one of the leading coal fired power plant construction companies in China has been awarded a contract for the first phase of the 300 MW against a global tendering process.

The 300 MW thermal power plant project is scheduled to be completed in33 months from zero date.

According to Nava Bharat Chief Executive Officer Ashwin Devineni, the purpose of the power project is to generate electrical power andsupply to the national grid to supplement the growing demand of electricity in the region.

On the other hand, MCL had stockpiled more than 120,000 tonnes of low grade coal for the thermal power plant.

Devineni observed that civil works by SEPCO a Chinese company whom MCL has signed a Letter of Intent (LOI) for the construction of the thermal power plant would be started after obtaining an environmental clearance from the Zambia Environmental Management Agency (ZEMA).

The thermal power plant project is estimated to cost US$650 million and Devineni says the work executed so far includes the demolition and removal of the old Coal Handling and Processing Plant (CHPP) in order to enable the firm construct a new and efficient CHPP.

The company has also ordered a new CHPP from a consortium of South African vendors as the first step to the revival programme followed by engagement of highly experienced contractor for carrying out certain basic mining operations and logistics under the active supervision of the MCL mining team.

This will ensure that the work done by the contractor confirms to scientifically drawn up mining plan aimed at conserving the thermal grade coal and environmental management.

Other works done on site includes refurbishment of the silo chutes and vibrating feeder’s fabrication and the procurement of the new main pump which is under progress for Kariba dam pumping system and overland conveyer works are also underway.

Mr Devineni explained that MCL had commenced the mining operations through the contractor, GRN Constructions Zambia by deploying Heavy Earth Moving Equipment and on its own had started sales of various grades of coal, though in small qualities.

“The extraction and logistics of high grade coal to the CHPP would be done in sync with the commissioning of the CHPP expected in March 2012.MCL expects to ramp up the washed coal sales from about 30,000 tonnes a month initially in April 2012 to about 50,000 tonnes during the later part of 2012/13,” Mr Devineni noted.

He pointed out that the firm would further build up the capacity to about 80,000 tonnes a month between 2013/14 in line with the growth ofthe market within the domestic and the region.

However, it is interesting to note that with the construction of the new CHPP, the procurement of heavy earth moving equipments andmachinery, the company estimates that the active mining areacomprising of 10 blocks would yield a mineable reserve of about 60million tonnes with matching quantum of thermal grade coal.

The constructor is expected to deliver about three million tonnes of raw high grade coal to the CHPP over the next three years prior to thecommissioning of the power plant.

With improved heavy earth moving equipment such as bull dozers,trucks, graders, excavators, compactors amounting to about 40 andadding another 20 to the fleet of earth moving equipment this month, the mining company is set to produce 40,000 tonnes of high grade coal per month.

Further, the company has also procured enough equipment to beef up departmental and supplemental mining activities.

This will enable Maamba Collieries to validate the coal reserves through drilling and geological assessment in the mining area.

In relation to the coal sales strategy, MCL plans to market and sell the coal produced as per mining plan thereby the coal washery plant will be commissioned in March this year whereupon MCL would begin the sales of high grade coal which was suspended three years ago.

It is planned that Maamba Collieries achieves monthly coal sales of 40,000 tonnes of high grade coal for both the domestic and export

markets. Therefore, the company has projected to produce 360,000 tonnes of high grade coal by December 2012 amounting to US$23 million.

Presently, the coal market size locally stands at about 30,000 tonnes per month and 10,000 tonnes for the regional markets.

Maamba Collieries Limited head of corporate affairs Janardhan Lavu said the firm had commenced the sales of high grade coal after three years of suspended operations due to worn-out mining equipment and machinery among other problems.

After being hit by operational problems and huge liabilities, the firm managed to supply 2,000 tonnes of high grade coal to Lafarge Cement marking the beginning of the sales.

He said. “MCL, which plans to satisfy the Zambian coal appetite, has been receiving enquiries from numerous eagerly waiting customers on when it would start catering for their coal needs.

MCL has commenced movement of coal on executed orders with companies such as Lafarge for example.”

Other companies like Zambezi Portland Cement have made an enquiry for a monthly orders of 6,000 tonnes of coal with the MCL managing to export 4,000 tonnes of coal to the Democratic Republic of Congo (DRC).

“We are exporting coal to DRC, Malawi and Namibia. MCL is also finalising enquiries received from various consumers such as Universial Mining Company, Zambezi Portland Cement, GECA Mines, Match

Corporation and Dangote Cement among others amounting to approximately 70,000 tonnes per month,” he said.

Dangote Cement, a Nigerian firm which is developing a cement plant and thermal power plant in Ndola, projected to procure both low and high grade coal for their thermal power plant.

It envisages that the new plant would have the capacity to produce 120,000 tonnes of washed coal per month.

Mr Lavu pointed out that the company would soon conclude a deal with the Rail Systems of Zambia (RSZ) to transport coal from Batoka terminals in Southern region of Zambia to Lusaka and Ndola in the Copperbelt province adding that, 10,000 tonnes of coal would be stock-piled at the storage area in Ndola to service the surrounding areas.

This deal will enable Maamba Collieries to reach out to its customers more effectively by railway rather than by road.

Universial Mining and Chemicals Industries Limited had in principalagreed to procure between 20,000 and 30,000 tonnes of high grade coal from Maamba on a monthly basis.

Universial Mining and Chemicals Industries Limited director corporate affairs Bright Chunga said in order to cater for the ongoing expansion works at their Kafue steel plant, the company had successful discussions with Maamba for the supply of high grade coal for the steelplant.

“We look forward to a very strong and mutually beneficial relationshipwith MCL for the many years to come as we grow on our capacities tobuild Kafue Steel plant into a dominant steel player in the SouthernAfrican Region,” Dr Chunga said.
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Inscription: Sam 5 Sep 2009 19:42

Message Ven 6 Avr 2012 15:08

Re: Maamba Collieries Set For Revival

NAVA Barat LTD takes over 65% of Maamba Collieries
By The Public - Sun Mar 27, 11:19 am

The Board of Commissioners of the Competition and Consumer Protection Commission (CCPC) has unconditionally authorized the takeover of 65% issued share capital in Maamba Collieries limited by Nava Barat Singapore PLC.

The shares of Maamba Collieries owned by the Zambian government through the Zambia consolidated Copper Mine (ZCCM) are being taken over by Nava Bharat Singapore of Singapore on grounds that the transaction did not raise any competition and public concern.

According to investigations carried out by the Commission, it is highly unlikely that consumers and customers of Maamba Collieries Limited could be abused by the firm because they have alternative sources of supply both in the domestic and import markets.

Maamba Collieries Limited is a wholly owned subsidiary of the ZCCM-IH, a successor company of the defunct Zambia Consolidated Copper Mines (ZCCM) and remains Zambia’s largest and dominant producer of coal accounting for 80-85% with only about 10-12% imports.

The Board notes that the takeover will provide the company with fresh capital which will boost production at Maamba Collieries Limited.

This was agreed upon during the 49th board of commissioners meeting held in Lusaka yesterday.

During the same meeting, the board of commissioners also noted and closed allegations of abuse of dominance against Shoprite by one of its suppliers on grounds that there was insufficient evidence against the supermarket chain to warrant further investigation.

A supplier had accused Shoprite Checkers of de-listing them from their list of suppliers allegedly as a result of their supply of the company’s product to Shoprite Checkers’ competitors Pick n Pay.

Investigations by the Commission revealed that Shoprite did not abuse its market position as claimed by the complainant and further that the complainant had had no supply contract with Shoprite but supplied its products through a third party, which no longer trades with Shoprite.

The Commission also found that other suppliers to Shoprite were not aware of such threats from Shoprite Zambia.

This is contained in a statement made available to QFM by CCPC Director of Consumer and Public Relations, Brian Lingela.
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