SALE OF THE MINES, THE UGLY TRUTH
WHEN
the K a f u e Consortium proposed sale collapsed, Cabinet made a decision to unbundle ZCCM. The mode of privatisation adopted by the government was to unbundle the company and sell the assets in business packages. The main reasons for unbundling the company into these asset packages was to promote the diversity of ownership of the mining assets, minimise delays in exploiting the various ore reserves and resources and, minimise political and economic risks. Cabinet also approved to restructure ZCCM into an investment holding company to hold a minority interest in the sold packages (which became ZCCM-IH ). The GRZ/ZCCM Privatisation Negotiating Team established sub committees to expedite the sale. It appointed; 1. Mr. Norman Mbazima, CEO and Managing Partner of Deloitte and Touche to find a buyer for ZCCM core assets. 2. Mr. Hakainde Hichilema, CEO and Managing Partner of Coopers and Lybrand Zambia, Grant Thornton, to sell non- core assets and subsidiary companies. 3. Mr. Elias Chipimo, Managing Partner and Senior Partner, of Corpus Globe to handle legal matters. The privatisation of all the core assets of ZCCM was completed on March 31, 2000 and units were sold as shown in the table. Until that date, ZCCM was a 60.3 percent state-owned mining conglomerate. Except for Ndola Lime, the major non-core assets were also privatised as follows; Power Division was sold to the Copperbelt Energy Consortium, comprising the National Grid Company and Midlands Power International, both of the United Kingdom, and five ZCCM senior managers. Completion of this transaction was achieved in November 1997.Mulungushi and Lunsemfwa Hydro Power Stations The Management Buy-Out Team teamed up with a financial and technical partner, Eskom Enterprises Limited (South Africa’s renowned electricity giant) as purchasers through a registered Zambian company called Lunsemfwa Hydro Power Company Limited (LHPC). LHPC had the shareholding: Eskom enterprises Limited held 51 percent of the shares; and Management Buy- Out/Zambians (through De Garnier Holdings and Wanda Gorge Investments Limited) held 49 percent shares. The unconditional Purchase Consideration originally made of following US$9.5 million payable in agreed stages was eventually reduced to US$8.25 million because of the state of the power stations’ assets due to under capitalisation. The reduction was also meant to allow the buyer make the investment required to restore the integrity of the assets and related power generating capacity.
CONCLUSION The privatisation programme will remain a topic for many years and the sale of the mines a matter of contested debate. Valentine Chitalu has been criticised for sitting on CDC Boards, an entity that snapped up some assets. Norman Mbazima is criticised for joining Anglo America, a corporation that bought KCM. *The author is Zambia’s aAmbassador to Ethiopia.