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The Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH) has embarked on a major diversification programme which will enhance its investment both in the country and abroad, according to sources Monday.
However the Zambian holding company is still beset with a lot of problems including a running debt with the government. At least the more than US$400 million it owes the state has been converted to equity and has no repayment timeline or interest attached to it.
But then the debt relief has not really helped the even out the ZCCM-IH balance sheet and hence its insistence to increase its shares in the mines operating in Zambia. It also wants to branch out in non-core business ventures such as agriculture, energy and manufacturing.
ZCCM-IH chief executive officer Pius Kasolo has confirmed his company’s intention to branch out into agricultural production, power generation and cement manufacturing at the moment. This is all in a bid to improve its status and to broaden its financial base after being written off a few years ago
”We are determined to change the face of ZCCM-IH and make it once more a viable mining company,” Kasolo said. The holding company CEO admitted that the state firm which holds shares in the mines on behalf of the government is continuing with its moves aimed at increasing its shareholding in the mining companies.
But then lack of funds and mining companies unwillingness to sell off controlling shares to the state mine holding company has complicated the matter. Government is also unwilling to to take an active role in mining against its privatisation policy.
However ZCCM-IH already holds up to 21% shares in most of the mining companies although it wants to stretch it further to 35%. The government holds 88% shares in the holding company while the remainder is in the hands of a consortia of French investors.
Difficulties in acquiring extra shares in the mining companies is what has forced ZCCM-IH to think of diversifying its business interests apart from mining. So far the state holding company is on an expansion trajectory going by its recent attainments and it is in fact on a slow financial rebound.
In the first quarter of this year ZCCM-IH recorded well over six billion kwacha (US$6 million) capitalisation making it the largest listed company in Zambia.
ZCM-IH which is also listed on the London Stock Exchange and the Paris based Euronext is focusing on its future growth strategy in order to maintain its lead as the largest investment holding company on the local bourse the, Lusaka Stock Exchange (LuSE).
This it hopes will lure investors to the copper, coal, energy, real estate and other national assets. From 2013 to 2015 the Zambian mining sector attracted about $15 billion in foreign investment.
At the close of the first quarter this year ZCCM-IH had a total of 4,400 shareholders and the number is expected to reach 6,000 in the first quarter next year. And in order to broaden the investment base the state holding company this year introduced an investor-focused website to provide information o investment opportunities which the company offers.
On the whole ZCCM-IH is committed to increasing its own investment in the country’s economic sector through assorted corporate deals other than copper mining. I also wants to increase its foreign market capitalisation to more than $500 million from $278 million realised three years ago.
Government is fully behind ZCCM-IH’s efforts to increase both its shareholding in the mines and to broaden its financial base as that would translate into increased income for the treasury. The mining sector in Zambia employs about 90,000 people and contributes 68.5% to that country’s GDP.
