By Amb. Emmanuel Mwamba
Icalo bashitisha
ZCCM-IH/FQM DEAL EXPOSED
By Brave Mushikita
The ZCCM-IH/FQM Deal in Numbers…
On 1 December it was announced that ZCCM-IH has agreed with First Quantum Minerals of Canada(FQM) to sell its 20% shareholding(on behalf of Zambians) in Kansanshi Mining Plc(KMP) to FQM.
FQM holds 80% shares in KMP through its wholly owned subsidiary, Kansanshi Holdings Ltd(KHL).
Let us cut to the chase, Let us look at the numbers……..
1. ZCCM-IH will get US$195m in a special dividend declaration.
2. ZCCM-IH will get a 20% share of the unpaid VAT refunds(less 20% of any VAT claim vosts incurred).
3. As at 30 June 2022 ZRA owed KMP US$442m and K433m in unpaid VAT refunds. From VAT refunds ZCCM-IH will get US$88.4m and K86.6m(US$5m).
4. ZCCM-IH will be issued (at closing) a loan note of US$685m for dividends declared on ZCCM-IH’s Class A shares.
5. ZCCM-IH(at closing) will have the right to receive quartely royalty payments of 3.1% of gross value metal sales revenue over life of mine(LOM).
6. As at 31 December 2021 KMP LOM was 23years, everything being equal it should be 22years as at 31 December 2022.
So how much will ZCCM-IH earn over 22 years in royalties?
7. In 2021 KMP’s metal sales revenue was US$1.539bn, if that is discounted at 10%, thats NPV of US$128m over 22 years.
8. From my calculation ZCCM-IH will receive a total of US$223m as a compensation for the sale of 20% shares. Do not include the VAT returns of US$93.4m because that is ZCCM-IH’s money already.
9. For US$223m so why didn’t ZCCM-IH just ask for full payment at the close of the deal? Why receive compensation over time, 22 years for that matter?
They want it to look like they(ZCCM-IH) have not sold the shares in KMP.
10. They even hoodwink you(Ba Zambia) into thinking that you(Ba Zambia)are still part of the KMP ownership after the transaction by appointing 2 directors with voting rights, for what? In a company which is 100% owned by them!
11. Now here is how you catch a monkey, for US$223m you owe it you give it a credit card of US$685m. In the end he ends up owing you.
My questions are;
Who evaluated the value of KMP?
