MINISTERIAL STATEMENT BY HONOURABLE PAUL C. KABUSWE, MP MINISTER OF MINES AND MINERALS DEVELOPMENT ON THE FULL DETAILS OF THE TRANSACTION BETWEEN ZCCM INVESTMENTS HOLDINGS PLC (ZCCM-IH) AND INTERNATIONAL RESOURCES HOLDINGS (IRH) INVOLVING MOPANI COPPER MINES PLC.

MADAM SPEAKER

I THANK YOU FOR ACCORDING TO ME THIS OPPORTUNITY TO RENDER A MINISTERIAL STATEMENT BEFORE THIS AUGUST HOUSE AND TO THE NATION AT LARGE ON THE FULL DETAILS OF THE TRANSACTION BETWEEN ZCCM INVESTMENTS HOLDINGS PLC (ZCCM-IH) AND INTERNATIONAL RESOURCES HOLDINGS (IRH) INVOLVING MOPANI COPPER MINES PLC.

THIS STATEMENT FOLLOWS THE DIRECTIVE BY YOU, HONOURABLE MADAM SPEAKER, FOLLOWING A POINT OF ORDER RAISED BY MR. CHINGA MIYUTU, MEMBER OF PARLIAMENT FOR KALABO CENTRAL PARLIAMENTARY CONSTITUENCY IN WESTERN PROVINCE.

MADAM SPEAKER

YOU MAY RECALL THAT ON THURSDAY 14TH NOVEMBER 2024, I RENDERED A MINISTERIAL STATEMENT BEFORE THIS AUGUST HOUSE REGARDING DETAILS OF THE TRANSACTION BETWEEN ZCCM-IH AND IRH INVOLVING MOPANI COPPER MINES PLC.

HOWEVER, HONOURABLE MADAM SPEAKER, YOU GUIDED THAT I COME BACK TO THE HOUSE WITH A STATEMENT EXPLAINING THE FULL DETAILS OF THE TRANSACTION AND ALSO TO EXPLAIN WHY PARLIAMENT WAS NOT PART OF THIS TRANSACTION.

 

MADAM SPEAKER

TO UNDERSTAND THE DETAILS OF THE MOPANI TRANSACTION, IT IS NECESSARY TO GIVE A BACKGROUND OF THE INITIAL TRANSACTION BETWEEN ZCCM-IH AND GLENCORE, THE PREVIOUS PARTNERS OF ZCCM-IH AND MAJORITY SHAREHOLDER OF MOPANI.

 

PRIOR TO THE INITIAL TRANSACTION, ZCCM-IH OWNED 10% SHARES IN MOPANI WITH GLENCORE OWNING 90% SHARES. OWING TO OPERATIONAL CHALLENGES, GLENCORE DECIDED TO EXIT MOPANI WHICH RESULTED IN ZCCM-IH ACQUIRING 90% SHAREHOLDING FROM GLENCORE IN 2021 FOR A PRICE OF USD1 RESULTING IN ZCCM-IH OWNING 100% SHARES IN MOPANI.

 

MADAM SPEAKER

LET ME TAKE THIS OPPORTUNITY TO INFORM THIS HOUSE THAT AT THE TIME GLENCORE EXITED MOPANI, THE COMPANY LEFT A DEBT OF USD1.5 BILLION WITH CERTAIN CONDITIONS THAT WERE UNFAVOURABLE AND NEGATIVELY IMPACTED ON THE OPERATIONS OF MOPANI. THESE INCLUDE:

 

IN ADDITION, IT IS IMPORTANT TO NOTE THAT THERE WAS ANOTHER REQUIREMENT FOR ZCCM-IH TO GUARANTEE A USD1.5 BILLION DEBT WHICH HAD THE POTENTIAL TO WIPE OUT THE EXISTENCE OF ZCCM-IH.

 

MADAM SPEAKER

SINCE THE TAKEOVER OF MOPANI BY ZCCM-IH IN 2021, THERE WAS NEED TO INJECT CAPITAL INTO MOPANI TO FINANCE VARIOUS PROJECTS LEFT UNCOMPLETED BY GLENCORE, SETTLEMENT OF VARIOUS CREDITORS AND ALSO TO BOOST OPERATIONS OF THE COMPANY.

AS YOU MAY BE AWARE, ONE OF THE WAYS OF RAISING THE REQUIRED FINANCES WAS TO INVITE PROSPECTIVE EQUITY PARTNER(S) TO BRING CAPITAL INTO MOPANI.

MADAM SPEAKER

TO IDENTIFY THE PROSPECTIVE EQUITY PARTNER, ZCCM-IH USED A COMPETITIVE BIDDING PROCESS IN WHICH IRH EMERGED AS A SUCCESSFUL BIDDER. THE TRANSACTION WAS NEGOTIATED AND CONCLUDED BY THE PARTIES NAMELY, ZCCM-IH, IRH AND MOPANI, FOLLOWING THE COMPLETION OF ALL STATUTORY AND CORPORATE REQUIREMENTS.

TO EXECUTE THE TRANSACTION, IRH PARTNERED WITH ZCCM-IH THROUGH ITS WHOLLY OWNED SUBSIDIARY COMPANY DELTA MINING LIMITED.

MADAM SPEAKER

I WISH TO STATE THAT ON 23RD FEBRUARY 2024, SHAREHOLDERS OF ZCCM-IH APPROVED THE ALLOTMENT OF NEW SHARES AMOUNTING TO 7,181,633 BY MOPANI TO DELTA MINING LIMITED FOR AN INVESTMENT AMOUNT OF USD1.1 BILLION.

THE ALLOTMENT OF THE NEW SHARES RESULTED IN DELTA MINING LIMITED ACQUIRING A 51% SHAREHOLDING IN MOPANI AND ZCCM-IH’S SHAREHOLDING BEING DILUTED TO 49% WHILE MAINTAINING ITS ORIGINAL 6,900,000 SHARES IN MOPANI.

CONSEQUENTLY, THE TOTAL NUMBER OF MOPANI SHARES INCREASED TO 14,081,633 AT COMPLETION OF THE TRANSACTION.

MADAM SPEAKER

ON THE ISSUE AS TO WHY PARLIAMENT WAS NOT PART OF THIS TRANSACTION, THE LEARNED ATTORNEY GENERAL GUIDED THAT THIS TRANSACTION DID NOT REQUIRE TO BE BROUGHT BEFORE THIS AUGUST HOUSE.

THE ATTORNEY GENERAL’S GUIDANCE, WAS THAT THE MOPANI TRANSACTION DID NOT NEED TO BE BROUGHT BEFORE PARLIAMENT BECAUSE OF THE FOLLOWING:

 

 

IN THIS CASE, MOPANI WAS NOT AND IS STILL NOT A PARASTATAL BEFORE AND AFTER THE TRANSACTION.

 

 

HOWEVER, IT IS GRATIFYING TO NOTE THAT THE NEW DAWN GOVERNMENT UNDER THE LEADERSHIP OF PRESIDENT HAKAINDE HICHILEMA NEGOTIATED AS PART OF THE TRANSACTION WITH THE INVESTORS AND ZCCM-IH FOR GOVERNMENT TO REINSTATE THE GOLDEN SHARE IN MOPANI.

 

MADAM SPEAKER

ALLOW ME TO STATE THAT THE PROCESS OF SELLING, TRANSFER OR DISPOSAL OF A MAJOR STATE ASSET INVOLVES THE ACTUAL TRANSFER OF SHARES FROM A SELLER TO A BUYER.

THEREFORE, ANY SALE OR TRANSFER OF SHARES REQUIRES THE EXECUTION OF A SHARE SALE AND PURCHASE AGREEMENT, COMPLETION OF SHARE TRANSFER FORMS AND PAYMENT OF PROPERTY TRANSFER TAX.

I WISH TO STATE, MADAM SPEAKER, THAT IN THIS CASE, NONE OF THE ABOVE STATED STEPS HAVE TAKEN PLACE AS THERE WAS NO SALE INVOLVED.

 

MADAM SPEAKER

WHAT HAPPENED IN THIS TRANSACTION, IS THAT THE INVESTOR IRH THROUGH ITS WHOLLY OWNED SUBSIDIARY DELTA MINING LIMITED SUBSCRIBED TO INVESTOR SHARES IN MOPANI IN EXCHANGE FOR ITS INVESTMENT AMOUNTING TO USD1.1 BILLION.

LET ME REITERATE THAT THERE HAS BEEN NO SHARES TAKEN AWAY FROM GOVERNMENT TO GO TO THE INVESTOR. IT THEREFORE CANNOT BE SAID THAT GOVERNMENT SOLD ITS SHARES IN MOPANI.

 

MADAM SPEAKER, I THANK YOU.

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