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Mer 12 Mai 2010 18:35
Govt evaluating Ndola Lime shares sale options By Kabanda Ch
By Kabanda Chulu in Kitwe
Wed 12 May 2010, 18:20
MINES minister Maxwell Mwale has said the government is evaluating various options of selling a certain per centage of shares in Ndola Lime in order to attract capital injection.
When asked to comment on the position the government will take at Ndola Lime, Mwale said current Zambian economic policies were centred on privatisation.
“There is no sacred cow under the policy of privatisation and the sad part is that man is usually resistant to change. It is the same when we embarked on privatising the mines; there were those people who were nostalgic about ZCCM, but they forgot that our copper production reached low levels of 250,000 metric tonnes per annum from the high of 750,000 metric tonnes and now it has peaked to 600,000 metric tonnes. So you can see that privatisation has been for the good of production since there has been capital inflows into the industry,” Mwale said.
“So (it) is the same with Ndola Lime, it is a limping duck and there will be need for injection of capital from the private sector because right now it is either government takes away resources for road infrastructure and health, education facilities and pump into Ndola Lime or we privatise a chunk of Ndola Lime. So really government through the Ministry of Finance shall be evaluating various options but Ndola Lime is not a sacred cow, that’s what I can confirm.”
He said the government through ZCCM-Investment Holdings would maintain a significant per centage of shares.
“I think you may realise that even in the mines government has a stake through ZCCM-IH and Ndola Lime is 100 per cent owned by ZCCM-IH and through ZCCM-IH we shall have a stake and probably higher than what we have in the mines,” said Mwale. “Because that operation (lime production) as a business is supposed to be very, very profitable business compared to copper mining since in terms of price fluctuation is not there but you just supply lime to the mining industry and even agriculture lime and even road construction and for the whole industrial sector, so Ndola Lime is not able to meet the demand which is there.”
However, production estimates from Ndola Lime indicates that the demand for lime is set to grow since the mining sector and the economy in general is expanding.
The company currently supplies its lime products to the mines, agro-processing companies, the construction sector and local authorities for water treatment.
Under the export market, Ndola Lime supplies its lime products especially hydrated lime to Malawi and Burundi for sugar refining industry and Zimbabwe, Namibia and South Africa for water treatment while the DR Congo uses lime for mining metallurgical processes and Tanzania for domestic use.
Currently, Ndola Lime’s profitability is hindered by the 30 per cent excise duty on heavy fuel oils which pushes up the company’s costs and prices, reducing its competitiveness.
But with the ongoing US $74 million recapitalisation of the company that would be concluded in 2011, it is projected that the new kiln and plant machinery would be fired on coal and heavy fuel oils (HFO) hence the company would cut down on cost of fuel.
The plant under construction will produce 600,000 tonnes of lime per day from the current 450,000 tonnes pay day and it will have new energy efficient and environmental friendly features.
Ndola Lime was earmarked for privatization and a Kenyan company Athi River was selected as a preferred bidder but in 2007 government changed its mind and decided to operate the company after it showed some levels of sustainability.