Authentic Extracts On The Sale Of ZCCM Show Why Mr. Hichilema Has Failed To Explain His Source Of Wealth

Authentic Extracts On The Sale Of ZCCM Show Why Mr. Hichilema Has Failed To Explain His Source Of Wealth…

…a case of entrusting a barley field with a goat for a second time.

Zambia Consolidated Copper Mines (ZCCM) was sold in 1998 for a total price of US$627million, which was divided into 7 sections of which, Konkola Copper mine was $25million, Kansanshi Mine was $28million, Luanshya mine was $35million, Chibuluma mine was $20million and others.

At this time, the prices of our copper had dropped from $2,300/ton in 1997 to about $1,500/ton in 1998 and remained at that level till 2003. The Government of Zambia was subsidizing the mines by approximately $1million PER DAY!! That was way too expensive to run the mines.

Privatization of ZCCM commenced in 1996, after the government and the boards of ZCCM and the Zambia Privatization Agency (ZPA) approved the ZCCM Privatization Report and Plan presented by the UK based Financial and Legal advisors, NM Rothschild & Sons and Clifford Chance, respectively.

On 11th of March, 1997, Fredrick Chiluba appointed Francis Kaunda to be Chairman of ZCCM Privatization team. He was hired based on two reasons given by the then President, (1). His knowledge on mining assets, and (2). Credibility with Investors in the mining industry.

Francis Kaunda had close to 3 decades of experience working at the top of mine business in the country from 1974 to 1991 when he was retired without reason when there was a change in government, but his vast knowledge prompted Chiluba to call him back in 1997 to handle the Privatization Process.

ZCCM Privatization team hired local experts and formed 3 groups during its transformation plan of 1998;

First group was to sell CORE assets, and this was headed by Norman Mbazima and John Patterson. ‘Core Assets’…an essential, important or valuable property of a business without which a company cannot carry on with its profit-making activities. A business would dissolve without its core assets, and companies that sell off core assets are usually liquidating and on the verge of bankruptcy.

Second group was to sell SUBSIDIARY assets, and this was headed by Hakainde Hichilema. ‘Subsidiary’…a company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company or holding company. A subsidiary is a company that is partly or completely owned by another company that holds a controlling interest in the subsidiary company.

Third group was to dispose of miscellaneous items and this was headed by Mwila Lumbwe. For the legal Services, Elias Chipimo Jr., who graduated from Oxford University with a Bachelor’s Degree in Civil Law, was hired. His main area was Corporate Law, Advisory work on Merges and Acquisitions, Privatizations and Capital market related work.

The nation must rally behind Government’s efforts to develop Zambia and ignore the political rhetoric we have been subjected to in the advent of multiparty politics. Most of those in the forefront screaming purported corruption by the Edgar Lungu led PF Government are just politicking for political hegemony as there is enough evidence to prove that they are not who they claim to be.

The second group, to sell SUBSIDIARY assets and headed by Hakainde Hichilema, selected the lowest bid by Sun International Ltd. when selling the Intercontinental Hotel Livingstone and the Rainbow Lodge in exchange for acquiring a massive amount of shares in the company. Is this not corruption?

The second group chose to reject competing bids of $20m by Victoria Falls Travel Bureau, $10m by Stocks and Stocks Ltd. and $9.4m by Marassa Holdings Ltd. but instead chose the lowest bid of $5.65m by Sun International of South Africa.

Why did Mr. Hichilema choose to sell these valuable properties belonging to Zambian taxpayers for just $5 million instead of $20 million when it was available? It turned out that the UPND presidential candidate worked out a deal to acquire a massive stake in the company in exchange for corruptly awarding them the lowest bid, and even incorporated Sun International (Zambia) Ltd. four months before the sale took place.

Under normal circumstances, this transaction would have been immediately stopped, over this conflict of interest, and Mr. Hichilema would have been subjected to a corruption investigation. But in this case, both the Commerce Minister, Hon. Dipak Patel and the Head of the Privatisation Agency were pulled into the transaction with Mr. Hichilema.

So what corruption are talking about today which is worse than what the second group was involved in? This is why we wish to make the general public understand that the time of propping up one individual over the needs of the nation is long gone. Zambia needs a new path. We must invest in a governance system that must promote development. No single person can develop Zambia. We all must get involved.

Who says Zambians can’t run mines? Has KCM collapsed since Government took it over? Is it not Mopani that has opted to go into maintenance and yet Mr. Hichilema was against Government taking over KCM? We must support Government efforts to relocate ownership of our natural resources back to Zambian hands.

The Edgar Lungu led PF Government has created ZCCM Gold Company, a wholly owned parastatal by government through the IDC, and has been mandated to drive the national gold agenda, undertaking and overseeing all gold related investments throughout the gold value chain in the country including exploration, mining, processing, refining, marketing, trading and beneficiation in Zambia.

Although copper might be fetching a staggering US$6.300/ton on the London Metal Market, with cobalt fetching a whooping US$80,000/ton, gold is in a class of its own, relatively fetching US$445.58 per gram with price per kilo averaging US$45,594.94.

This is the sort of information Zambians ought to concentrate on and not unsubstantiated corruption allegations by people who can discuss their from rugs to riches stories.

2 thoughts on “Authentic Extracts On The Sale Of ZCCM Show Why Mr. Hichilema Has Failed To Explain His Source Of Wealth

  1. Very good analysis of issues. Can HH or indeed his allies come out and refute these allegations against him if they feel something different was done from what is said in this article.

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