On Solid Ground

Since you joined the company last October, what priorities have you identified for the next few years?

My mandate was to industrialize ZCCM and increase its value. ZCCM has historically been highly involved in the mining industry, and we are now in the process of industrialization. We are investing in energy on a 300 MW power plant, and moving toward micro hydro stations. We are also interested in adding value to copper, and are in the process of conceptualizing a factory to manufacture copper wires and cables. This project will commence within 18 months at a cost of around $65 million. We will also commence work on manganese mining. We are targeting processes such as manganese oxide production, which will double the value of the raw manganese. In addition, we are funding a Zambian exploration company exploring for manganese in Luapula province. Our other venture is investment in property. When privatization occurred assets were issued to residents and companies as a form of payment. Certain assets were forgotten, and upon discovering that we have a number of properties, we decided to capitalize on them, by upgrading and renting them out.

In addition to mining and real estate, what other sectors are you involved in?

We are getting involved in cement manufacturing at our Ndola Lime plant. Cement is a very expensive commodity in Zambia, which makes major projects, including road building, expensive. Our intention is to see a reduction in prices as a result of the opening of new plants. Within 18 months we plan to open one with a daily capacity of 5,000 tons. There is much that needs to be done to industrialize the country, which cannot be done without the basic component of cement.

What are the main factors behind your positive performance at the stock exchange?

The market has confidence in ZCCM; we have seen a 163% increase in market share. We are also the best performing company on the Lusaka Stock Exchange. The trick in any investment company is to manage your diversification because singular commodities can be paralyzing. Our strategy is to industrialize Zambia. We are monitoring our investments closely, looking at new businesses and analyzing their potential risks and returns.

Given the drop in copper prices and increase in mining royalties, how confident is ZCCM of positive sector evolution?

We are positive, not least as the president has a clear vision for growth of the Zambian economy and is keen on trickle down economics. There will be more people employed and generating income, as jobs are being generated from the top down. ZCCM-IH will employ hundreds of people in our copper plants and concrete plants. Though the price of copper has been decreasing, we are now seeing an upswing in the market. Higher taxes will affect us because we receive dividends from the mines, although I should stress that it is necessary to pay equitable taxes. Mining companies need to be transparent in their dealings. Taxes may appear unpalatable, but are ultimately directed to raise funds to the betterment of society. In October 2014 we declared a dividend of $40 million to our shareholders.

What are your expectations for the year ahead?

The sky is the limit for ZCCM because we have government support to grow the company. The major shareholders in the government want us to move forward, and I have an excellent team to support me. Our projects are adding value to the company and making money for the shareholders. Although the next few years will be challenging for our team, in the long run we will reap the rewards. Within two years we should add close to $500 million to our assets.