SARAH BULLEN, Johannesburg | Friday 7.30pm.
ANGLO American Corporation subsidiary, Zambia Copper Investments, on Friday afternoon formally announced it is to acquire the assets of state-owned Zambia Consolidated Copper Mines for a beefed up $90-million. This brings to an end speculation over the price AAC would finally acquire ZCCM’s lucrative copper mines following reports that the bid dropped as low as $8-million.
AAC holds 51% of ZCI. AAC announced on Friday that it has signed a memorandum of understanding with the Zambian government in which it agrees to take an 80% interest in a new company which will hold the Konkola (including Konkola Deep), Nkana and Nchanga mines, as well as ZCCM’s Nampundwe mine. ZCCM, which has long been trying to sell the assets, will keep a 20% interest in the new company. 5% of this will be free and 15% will be repayable. The announcement will allow the Zambian government some respite after stinging remarks by Zambian opposition parties for its apparent acceptance of an offer of $8-million for the Konkola, Nkana and Nchanga mines by AAC.
The low offer was particularly embarrassing to the government after President Frederick Chiluba last year dismissed an earlier offer of $72-million made by now defunct Zambian-based Kafue Consortium as ”a song”.
AAC said in a statement it will to commit capital expenditure of $300-million during the first three years and, subject to the raising of third party project finance, implement the Konkola Deep project at a capital cost of some $800-million dollars.