Some 40 firms have been short-listed as potential investors in Zambia’s troubled Konkola Copper Mines (KCM) after the August exit of Anglo American, KCM said on Monday.
”We have a target list of probably 40 companies…all of whom have potentially qualified,” said Standard Bank head of metals and mining advisory committee Stephen Oke, adding that market conditions made the search difficult.
Oke’s Standard Bank and London-based SRK Consulting have been retained as financial advisers in the sale of a strategic stake in KCM. Oke’s comments were carried in the latest issue of KCM’s monthly newsletter, Konkola News.
He said the 40 short-listed firms were to be screened.
Zambia’s Finance Minister Emmanuel Kasonde has previously said he preferred diversified Australian miner BHP Billiton as a new strategic partner in KCM. But BHP Billiton has not said whether it will give KCM more than a glance.
Oke said KCM was looking for a partner with technical expertise as well as cash to spare.
”But obviously with the nature of the assets we have at KCM, we are looking primarily for companies that will have technical capacity and will have access to finance or a financial partner to be able to provide the necessary technical and financial expertise,” Oke said.
Anglo withdrew from the loss-making KCM in August and agreed to pay $30-million in cash and provide a $26,5-million loan on favourable terms to keep the mines operating.
KCM operates the Nchanga and Konkola copper and cobalt mines and the Nampundwe pyrite mine. Together they account for some 67% of Zambia’s total metals output.
Mining accounts for the bulk of Zambia’s foreign exchange earnings and are a key employer in this poor southern African country of 11 million people.
Oke said the KCM board would soon approve ”certain tests” before KCM’s new strategic partner was picked.
”The search for a new strategic partner may not be easy given the present state of the world economy and the continued low copper prices, but KCM has a significant world class copper asset in the Konkola Deep Mining Project (KDMP),” Oke said.
KCM suspended development at the $500-million KDMP due to lack of capital in 2001. KDMP had been touted as the future of Zambian copper mining, and was expected to produce some 200 000 tons of copper annually.
Zambia Copper Investments (ZCI) has a 58% stake in KCM while the balance is held by ZCCM Investments Holdings.
KCM board chairman Barrie Ireton said on Friday the firm had set January 31, 2003 as the deadline for receiving bids from companies interested in acquiring a strategic stake in the copper/cobalt mine.
Ireton said the KCM board and its management had taken a fresh look at the company’s prospects and had identified significant opportunities for new investors. – Reuters