Message Sam 9 Juin 2018 13:18

Transcript Q4

Moving onto Copper-Zambia, financial year '18 was an important year for us, as we transitioned into a new operating philosophy through the business partnering model. Konkola achieved its highest production of the year in March 2018, Encouraged by this operational improvement, we continue to focus on a sustained development and dewatering strategy at Konkola underground, augmentation and improved fleet availability at Konkola underground and Nchanga open pit under OEM supervision across businesses, strengthening the operating organization and rationalization of cost base.

In summary, we have in place a renewed operating model to have substantial improvement in our growth in financial year '19. KCM has the required infrastructure and coupled with the necessary mine development, this asset has the potential to produce 300,000 ton copper in the medium term.
Steven Din

Yes, thank you very much, Arun and Mr. Kaura. So, first of all, if I can give you the -- I mean, as you mentioned, the debt levels at KCM are reducing. So at the end of Q1, we had an external debt level of $509 million, which at the end of Q4 has reduced down to $376 million. And then if we look at the balance that we have at group, at the end of Q1, it was $612 million, and it has moved up slightly to $622 million.

But overall the debt level at KCM has reduced. And this is, quite simply, is a result of the improvements which are coming through, essentially a change in the operating philosophy, where we found that there were certain parts of the business, which were mainly legacy assets and in some cases, they were suffering from low equipment availability or not having the right level of fleet. So we've looked at certain parts of those legacy assets and where there is a short life, we have basically contracted those sections out to essentially business partners and the transitioning is now almost complete, and we're starting to see the productivities, particularly, for example, from the open pits coming through.

But at the same time, we also have the asset at the Konkola underground mine, which if I can just remind everybody, has just under 300 million tons of resource at 3.5% copper. This is also being looked at in relation to our contracting out philosophy with the business partners. And once again, we have looked at probably the two shafts that we have at Konkola in a different way that we are once again starting to see the productivities come through. And as you've seen in the outlook for FY '19, we are hoping that the numbers that we achieved towards the end of March and that we're achieving right now in May, will continue and growth into the end of the year and then hopefully, these debt levels will reduce even further.