ZAMBIA TO DEAL WITH ‘CHEATING’ MINING HOUSES

The Zambian government plans to strengthen penal measures against false reporting of mineral production and export information.

Finance Minister, Alexander Chikwanda says monitoring mechanisms and structures will also be strengthened so as to know exactly how much the mines are producing and earning in the sector.

This comes in the backdrop of public concern over how much the mining sector is contributing to national revenue.

Mr Chikwanda has explained that he will soon table for possible enactment of a bill to stiffen punitive measures against erring mining houses.

And the minister has further proposed a 10 % tax on the transfer of a mining right, as well as reducing the mines capital expenditure deduction rate from 100 % to 25 %.

Meanwhile, at least US$ 255 million of the recently accessed US$ 750 million Euro-bond proceeds, will be invested in the electricity sector, whose current generation capacity is in deficit.

Another US$ 430 million of the respective money will be invested in roads and railways, sectors, which the minister hopes will spur economic growth activities.

Mr Chikwanda, has disclosed this when announcing the country’s K 32.2 trillion national budget for 2013.

Among economic targets set out for next year are a 7 % Gross Domestic product growth, a 6 % year-end inflation rate and the creation of 200,000 jobs.

ZAMBIA DEBT STOCK SOARS

Zambia’s national debt stock now stands at US$ 2.47 billion, as at end of September this year, up from US$ 1.56 billion last year.

This is inclusive of the recently contracted US$ 750 million, through the Euro-bond.

Finance Minister, Alexander Chikwanda has disclosed this in parliament, during his 2013 budget presentation.

Mr Chikwanda has further allayed fears that the debt stock is unsustainable.

Meanwhile, gross international reserves have soared to US$ 2.6 billion from US$ 2.3 billion, representing 3.5 months of import cover.

The minister has however targeted to maintain international reserves of up to 4 months of import cover in next year’s national budget.

ZANACO SHAREHOLDERS IN SECURITIES CAUTIONARY STATEMENT

The future of Zambia National Commercial Bank shares remains in limbo, owing the pending release of a government-directed inquiry into the partial privatisation of the bank.

ZANACO has since issued a cautionary statement over its Lusaka Stock Exchange-listed shares.

This is in light of any material effect on the share price, due to last December’s government instituted Commission of inquiry into the partial sale of the bank.

ZANACO was in 2007 partially privatised, in a transaction, in which the Dutch-based Rabo-bank bought a majority 75 % stake in then the only indigenous bank.

Rabo-bank later diluted its stake to 45.5 %, by floating a 24 % stake to the general public on the Lusaka Stock Exchange and a 3.4 % stake to the Zambia National Farmers Union. Meanwhile, ZANACO has reported a K 74 million after-tax profit for the first 6 months of this year.

This is a 32 % rise from last year’s K 56 million for the corresponding period.

In a statement, ZANACO has also reported an 82 % earnings per share reduction, which it says is due to share holding restructuring, in order for the bank to meet the new capital regulation.

ZAMBIA COMMERCIAL BANKS SEEK SOVEREIGN BOND FUNDS

The financial sector has welcomed the proposed six to 18 months placement of the country’s US$ 750 million sovereign bond with the commercial bank sector.

Bankers Association of Zambia Chairman, Friday Ndhlovu says the decision will help government re-coup some of the interest charged on the respective loan.

The bankers have however cautioned that the money be availed to them at commercial rates, so as not to keep the funds idle.

In a statement, the bankers have also advised that the funds are invested in productive sectors of the economy, and disbursed only through the commercial financial sector.

The Zambian government has proposed to hold the huge sovereign bond funds with the commercial banks, before viable beneficiary development projects are identified.

The country recently accessed the US$ 750 million funds from the European and American financial markets, through a sovereign bond, at an interest of 5.4 %, with a repayment period of 10 years.

UNDERGROUND OPERATIONS PROSPECTS DISCLOSED FOR ZAMBIA’S KAGEM MINE

Gemfields, the holding company for Kagem mine in Zambia has disclosed prospects of expanding operations at its Copperbelt-based Zambian entity.

According to a statement posted on the company’s website, the expansion plans centre around developing the Kagem mine into an under-ground facility.

Kagem is currently an open-pit operations mine, whose full revenue potential is yet to be significant to the Zambian economy.

These plans are against the background of possible ore deposits of not less than 2.75 million tonnes at the current area of operations.

A lead mining consulting firm, SRK has estimated Kagem’s ore deposits at an impressive 1 billion carats of emerald and beryl at 365 carats a tonne.

However, a feasibility study of the economic viability of the expansion plans is yet to be done.