ZCC Zccm Investments Holdings Plc

2.    KEY OPERATIONS AND STRATEGIC UPDATES

(I)    Mopani Copper Mines Plc

Shareholders are referred to the announcements ZCCM-IH released on the Stock Exchange News Service ("SENS") of the Lusaka Securities Exchange ("LUSE") on 10th November 2023, 30 November 2023, 22 December 2023, 1 February 2024 and 23 February 2024, including the Transaction circular (the "Circular") released on 2 February 2024 incorporating a notice of Extraordinary General Meeting ("EGM") to consider the Transaction relating the up to USD1.1 billion capital investment by International Resources Holding RSC Ltd ("IRH"), through its wholly-owned subsidiary, Delta Mining Limited ("Delta"), for a 51% interest in Mopani Copper Mines plc ("MCM") and the formation of a strategic partnership with ZCCM-IH. The investment will be comprised:

·      USD620 million in new equity capital,

·      USD100 million in settlement of existing third-party letters of credit at the time of the completion of the transaction, and

·      USD380 million of shareholder loans.

So far IRH, through Delta, has invested a total of USD620 million, consisting of a USD400 million payment to Glencore to restructure the USD1.7 billion Glencore debt, and an equity investment of USD220 million directly injected into Mopani.

Additionally, the remaining equity funding of USD400 million is expected to be disbursed over the next three years. This investment is expected to bolster Mopani's financial position and supporting its growth initiatives.

Shareholders are referred to the announcements dated 21 March 2024, and the circular under section 8.21 relating to the structure of the USD 150 million Glencore Payment Covenant which was a partial consideration for the write down of the MCM debt to Glencore. In order to make the payment to Glencore and complete the transaction, ZCCM-IH made an upfront payment of USD15 million and entered into a loan facility with the Government of the Republic of Zambia through the Ministry of Finance and National Planning ("GRZ") pursuant to which the GRZ is to make available to ZCCM-IH an aggregate loan of USD135 million plus a further amount equal to the aggregate interest that ZCCM-IH is required to pay to Glencore under the payment covenant. The GRZ loan is interest free, has a repayment moratorium of five (5) year and the GRZ have the option to convert the value of its loan into equity in the capital of ZCCM-IH, subject to the approval of ZCCM-IH's shareholders in accordance with Section 10 of the LUSE Listing Rules.

(VI)  Maamba Energy Limited

In the energy sector, ZCCM-IH has since committed to participating in the debt financing of Maamba Energy Limited 300MW Phase II Project. The total project cost is estimated at USD 400 million and will take up to 24 months to complete. USD 300 million will be financed by a consortium of lenders.

ZCCM-IH will contribute USD 15 million towards the debt portion in form of loan that will have a tenor of 10.25 years from construction start inclusive of a moratorium of 1.25 years. The interest rate will be nine (9%) per cent per annum. The balance of USD 100 million will be provided in the form of equity by the Shareholders; Nava Bharat Singapore Pte Limited ("NBS") and ZCCM-IH in proportion to their respective shareholding in MEL of 65 per cent and 35 per cent respectively. This means that NBS will contribute USD 65 million and ZCCM-IH will contribute USD 35 million.

(II)   Investrust Bank Plc ("Investrust")

On April 2, 2024, the Bank of Zambia ("BOZ") took possession of Investrust Bank Plc ("Investrust"). The possession of Investrust by BOZ was necessitated by its insolvency. On 24 April 2024, the Bank of Zambia terminated all interests of shareholders in Investrust.

(III)  Konkola Copper Mine Plc

On 25th July 2024, the Lusaka High Court ordered the withdrawal of the winding up petition effectively vacating the Provisional liquidator, reinstating the Board of Directors, and ending the KCM liquidation. The winding-up petition has been successfully terminated, marking a pivotal step in resolving years of legal challenges. This termination has allowed the management control of KCM to be fully returned to Vedanta Resources, the majority shareholder.

Vedanta has committed to a substantial investment in reviving KCM's operations, planning to inject approximately USD1.2 billion for a period of five years. This includes significant investments in enhancing copper production and advancing the Konkola Deep Mining Project. To date KCM has received USD 250 million from Vedanta to settle partial outstanding debts with Zambian creditors as part of their efforts to stabilize operations

KCM is currently implementing a Scheme of Arrangement, which is designed to restructure the company's obligations and improve overall operations.

These developments underscore our commitment to restoring KCM to its full operational potential and maintaining our focus on long-term growth and sustainability.

3.    OUTLOOK

ZCCM-IH will continue to position itself to capitalize on more profitable and sustainable opportunities within the mining and energy sectors. This approach aligns with ZCCM-IH's strategy, which is focused on investments in mining, energy, and related areas.

·   Raising both short and long-term capital to support mining and energy investments within the group.

·   Implementation of more predictable alternative income streams such as the royalty model.

·   Cost containment and cash optimization initiatives.

·   Continued implementation of the turnaround plans to improve efficiencies, productivity, and growth in subsidiary companies.

·   Portfolio optimization and divestment from non-viable and non-mining related investments.

By Order of the Board

Charles Mjumphi

Company Secretary

Issued in Lusaka, Zambia on 1 September 2024