MIRA INFORM REPORT
|
Report Date : |
9th May 2006 |
IDENTIFICATION DETAILS
|
Name : |
KONKOLA COPPER MINES PLC |
|
|
|
|
Registered Office : |
M/1408 Fern Avenue, P. O. Box Private Bag KCM (S) 2000,
Chingola, Zambia |
|
|
|
|
Date of Incorporation : |
31.03.2000 |
|
|
|
|
Com. Reg. No.: |
43628 |
|
|
|
|
Legal Form : |
Public Limited Liability Company |
|
|
|
|
Line of Business : |
Mining of copper, cobalt, pyrite and
anode slimes. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
|
Maximum Credit Limit : |
ZAM DLRS 1,500,000,000 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
COMPANY NAME
KONKOLA COPPER MINES PLC
ADDRESS
Street : M/1408 Fern Avenue
P.O. Box :
Private Bag KCM (S) 2000
Town : Chingola
Country : Zambia
Telephone :
(260 2) 350 001-3
Fax : (260 2) 351 234 / 351 221 (Financial
Department)
E-Mail : aacca@zamnet.zm
Shortform Name
KCM
SENIOR COMPANY PERSONNEL
Name Position
Board of
Directors
1. Navin
Agarwal Director
2. Kuldip
K Kaura Director
3.
Coimbatore V Krishnan Director
4.
Debkumar Bandyopadhyay Director
5. Peter E
Sydney-Smith Director
6. Tom
Kamwendo Director
7. Leonard
Nkhata Director
8. Nick
Zekko Director
9. Steven
Georgala Director
10.John M
D Patterson Director
11.George
K Chibuye Director
Management
1. Navin
Agarwal Chairman
2. Kuldip
K Kaura Deputy Chairman
3.
Coimbatore V Krishnan Chief
Executive Officer
4. Renoit
Vhanderwat Chief Financial Officer
5.
Debkumar Bandyopadhyay Vice President-Safety, Health and
Environment
6.
Passmore P M Hamukoma Vice President-Human Resources &
Corporate Affairs
7. Ben C
Chileshe Vice President-New Projects
8. Pius H
Maambo Vice President/General
Manager-Nchanga
Integrated Business Unit (IBU)
9. Maxwell
Mutale General Manager-Konkola IBU
10.David
Ng'andu Manager-Nkana IBU
11.Keith
Kapui Manager-Nampundwe IBU
12. Nawa
Mataa Company Secretary
Total Employees
10,549
PAYMENTS
No
complaints have been heard regarding payments from local suppliers or banks.
Subject
was established in 2000 and is a subsidiary of Vedanta Resources Plc, of UK,
which company is listed in London Stock Exchange since December 2003. The group
is a diversified and integrated FTSE 250 metals and mining group with annual
sales for 2005 of US DLRS 1.9 billion. The Group operations are located in
India, Zambia and Australia.
Consolidated
results (subject and its former subsidiary) for 2002 and 2003 show losses.
Financial results for 2004 are not yet available.
In view of
the company's ownerships we consider it is acceptable to deal with subject for
MEDIUM amounts. In view of the above we recommend international suppliers
exercise a degree of caution where larger or protracted dealings are envisaged.
|
Opinion
on maximum credit |
ZAM DLRS
1,500,000,000 |
|
|
|
|
Trade
risk assessment |
Normal |
It is
normal accepted practice for international suppliers to deal on secured terms
with Zambian importers
TRADE REFERENCES
NAME :
TRADE IMPORT & EXPORT
PO
Box :
6793
Town :
Rogge Baai 8012
Country :
South Africa
NAME :
SHELL CHEMICALS
PO
Box :
748
Town :
Saxon Wold 2132
Country :
South Africa
NAME :
CYTEC
Street :
Bowling Park Drive
Town :
Bradford BD4 7TT
Country :
UK
NAME : COGNIS
Town :
Little Island
County :
Cork
Country :
Ireland
NAME :
TRADEDRIVE LIMITED
Street :
9 Market Street
Town :
Windsor
County :
Berkshire SL4 1pB
Country :
UK
PRINCIPAL BANKERS
NAME :
STANDARD CHARTERED BANK ZAMBIA LTD
Branch :
Kwacha Rd, ZNCB Bldg
P.O. Box : 11255
Town :
Chingola
Fax :
(260 2) 331 3891
The
company also has an account with the following banks :
1.
Citibank N.A., London
2.
Barlcays Bank of Zambia Ltd
3.
Citibank Zambia Ltd
4. Stanbic
Bank Zambia Ltd
FINANCIAL INFORMATION
Consolidated
Balance Sheet * as at 31 December 2003 (latest available) showed:
BALANCE
SHEET
Goodwill : US DLRS
55,995,000 - 2002 - exact
: 0 - 2003
Tangible
fixed assets : US DLRS
206,794,000 - 2002 - exact
: US DLRS 290,345,000 - 2003 - exact
Deferred
secondary development : US DLRS 29,159,000 - 2002 - exact
expenditure : US DLRS
25,771,000 - 2003 - exact
Deferred
tax assets : US DLRS 87,453,000 - 2002 - exact
: US DLRS 87,520,000 - 2003 - exact
Total non
current assets : US DLRS 379,401,000 - 2002 - exact
: US DLRS 398,636,000 - 2003 - exact
Stocks : US DLRS 88,308,000 - 2002 - exact
: US DLRS 87,864,000 - 2003 - exact
Debtors :
US DLRS 46,658,000 - 2002 - exact
: US DLRS 46,924,000 - 2003 - exact
Bank and
cash balances : US DLRS 37,695,000 - 2002 - exact
: US DLRS 2,553,000 - 2003 - exact
Total
current assets : US DLRS 272,661,000 - 2002 - exact
: US DLRS 137,341,000 - 2003 - exact
Trade
creditors : US DLRS (40,321,000)- 2002 - exact
:
US DLRS (19,525,000 - 2003 - exact
Other
creditors and : US DLRS (12,410,000) - 2002 - exact
accrued
expenses : US DLRS (39,826,000)- 2003 - exact
Short term
loans and : US DLRS (5,824,000)- 2002 - exact
bank
overdraft : US DLRS (25,933,000)- 2003 - exact
Taxation : US DLRS
(123,000)- 2002 - exact
: US DLRS (33,000)- 2003 - exact
Total
current liabilities : US DLRS (58,678,000)- 2002 - exact
: US DLRS (85,317,000)- 2003 - exact
Net
current assets : US DLRS 113,983,000 - 2002 - exact
: US DLRS 52,024,000 - 2003 - exact
Total
assets less current : US DLRS 493,384,000 - 2002 - exact
liabilities : US DLRS
450,660,000 - 2003 - exact
Long term
loans : US DLRS (35,033,000)- 2002 - exact
: US DLRS (35,142,000)- 2003 - exact
Deferred
taxation : 0 -
2002
: US DLRS (747,000)- 2003 - exact
Provisions
for liabilities : US DLRS (92,632,000)- 2002 - exact
and
charges :
US DLRS (89,429,000)- 2003 - exact
Total
Liabilities due after : US DLRS (127,665,000)- 2002 -
exact
more than
one year : US DLRS (125,318,000)- 2003 -
exact
Net
assets : US DLRS 365,719,000 - 2002 - exact
: US DLRS 325,342,000 - 2003 - exact
Share
capital : US DLRS 64,784,000 - 2002 - exact
: US DLRS 64,784,000 - 2003 - exact
Share
premium :
US DLRS 473,568,000 - 2002 - exact
: US DLRS 473,568,000 - 2003 - exact
Deficit on
revenue reserves : US DLRS (180,133,000)- 2002 - exact
: US DLRS
(216,774,000)- 2003 - exact
Capital
reserves : US DLRS 7,500,000 - 2002 - exact
: US DLRS 7,500,000 - 2003 - exact
Other
reserves : 0 -
2002
: US DLRS (3,736,000)- 2003 - exact
Shareholders
interest : US DLRS 365,719,000 - 2002 - exact
: US DLRS 325,342,000 - 2003 - exact
CONSOLIDATED
PROFIT & LOSS ACCOUNT
Turnover : US DLRS
394,096,000 - 2002 - exact
: US DLRS 356,308,000 - 2003 - exact
Cost of
Sales : US DLRS (352,139,000)- 2002 - exact
: US DLRS (286,251,000)- 2003 -
exact
Gross profit : US DLRS
41,957,000 - 2002 - exact
: US DLRS 70,057,000 - 2003 - exact
Other
operating expenses : US DLRS (69,207,000)- 2002 - exact
: US DLRS (75,350,000)- 2003 - exact
Goodwill
write back/ : US DLRS
(1,806,000)- 2002 - exact
(amortisation) : US DLRS
(1,806,000)- 2003 - exact
Negative
goodwill written off : 0 - 2002
: US DLRS 474,000 - 2003 - exact
Depreciation : US DLRS
(30,272,000)- 2002 - exact
: US DLRS (29,539,000)- 2003 - exact
Operating
loss : US DLRS (59,328,000)- 2002 - exact
:
US DLRS (32,552,000)- 2003 - exact
Other
income : US DLRS 4,696,000 - 2002 - exact
: US DLRS 2,011,000 - 2003 - exact
Net
exchange gain : US DLRS 271,000 - 2002 - exact
: US DLRS 68,000 - 2003 - exact
Impairment
adjustment : US DLRS (104,611,000)- 2002 - exact
: 0 - 2003
Write back
of provisions :
US DLRS 7,676,000 - 2002 - exact
: 0 - 2003
Loss
before finance costs : US DLRS (151,296,000)- 2002 - exact
and
taxation : US DLRS (30,473,000)- 2003 - exact
Interest
expense : US DLRS (8,152,000)- 2002 - exact
: US DLRS (1,121,000) - 2003 - exact
Loss
before taxation : US DLRS (159,443,000)- 2002 - exact
: US DLRS (31,594,000)- 2003 - exact
Taxation
(charge) credit : US DLRS
58,899,000 - 2002 - exact
: US DLRS (5,047,000)- 2003 - exact
Loss for
the year : US DLRS (100,549,000)- 2002 - exact
:
US DLRS (36,641,000)- 2003 - exact
Results
for 2004 and 2005 are not yet available.
* The
above figures apply to the subject and its former subsidiary, KCM Smerteco Ltd,
now subject's division.
The
following consolidated financial information as at 31 March applies to Vedanta
Resources Plc, subject's parent company :
2005 2004
(in millions of US Dollar)
Fixed assets
Intangible assets (52.6) 3.6
Positive goodwill 10.8 12.2
Negative goodwill (63.4) (8.6)
Tangible fixed assets 2,275.0 1,268.4
Investment in associate 3.3 2.7
Other investments 24.8
27.5
2,250.5 1,302.2
Current assets
Stocks 336.3 199.9
Debtors 464.2 245.5
Current asset investments 1,386.0 1,188.5
Cash at bank and in hand 61.6 52.7
2,248.1 1,686.6
Creditors:
amounts falling due within one year
Short-term borrowings (218.4) (295.3)
Loans (194.7) (245.8)
Convertible bonds (23.7) (49.5)
Other current liabilities (723.2) (586.5)
(941.6) (881.8)
Net current assets 1,306.5 804.8
Total assets less current liabilities 3,557.0 2,107.0
Creditors: amounts falling due after
more than one year (1,344.7) (529.9)
Provisions for liabilities and
charges (424.2) (162.9)
Non equity minority interest (59.4) -
Equity minority interests (681.6) (423.3)
Net assets 1,047.1 990.9
Capital and reserves
Called up equity share capital 28.7 28.6
Shares to be issued 0.9 -
Share premium account 18.6 18.6
Merger reserve 4.4 4.4
Other reserves 26.9
8.3
Profit and loss account 967.6 931.0
Equity shareholders’ funds 1,047.1 990.9
CONSOLIDATED
PROFIT AND LOSS ACCOUNT
Group and
share of : USA DLRS 1,300,600,000 - 2004 - exact
associate’s
turnover : USA DLRS 1,895,000,000 - 2005 - exact
Less:
associate’s turnover : USA
DLRS (11,100,000)- 2004 - exact
: USA DLRS (10,800,000)- 2005 - exact
Group
turnover : USA DLRS 1,289,500,000 - 2004 -
exact
: USA DLRS 1,884,200,000 -
2005 - exact
Cost of
sales : USA DLRS (973,900,000)- 2004 - exact
: USA DLRS (1,414,800,000)-
2005 - exact
Gross
profit : USA DLRS 315,600,000 - 2004 - exact
: USA DLRS 469,400,000 - 2005 - exact
Administrative
expenses : USA DLRS
(60,100,000)- 2004 - exact
: USA DLRS (112,000,000)- 2005 - exact
Other
operating income : USA DLRS 17,200,000 - 2004 - exact
: USA DLRS 25,900,000 - 2005 - exact
Group
operating profit : USA DLRS 237,100,000 - 2004 - exact
: USA DLRS 331,800,000 - 2005 - exact
Profit
before taxation : USA DLRS 233,400,000 - 2004 - exact
: USA DLRS 332,300,000 - 2005 - exact
Tax on
profit : USA DLRS (76,000,000)- 2004 - exact
:
USA DLRS (97,600,000)- 2005 - exact
Profit for
the financial : USA DLRS
72,300,000 - 2004 - exact
: USA DLRS 120,300,000 - 2005 - exact
Financial
year ends 30 March.
LEGAL STATUS AND HISTORY
Date
Started : 31 March 2000
History : The company was established in
Zambia on 31 March 2000
following the privatisation of ZCCM’s
Konkola, Nchanga,
and Nampundwe mines, when Anglo American
plc, UK
(AAplc) led a consortium of the International
Finance
Corporation (IFC) and the Commonwealth
Development
Corporation (CDC) and acquired 80% of shares
in the
subject company. On 16 September 2002
subject
undergone restructuring and a change of ownership, ended
in 2004. Since August 2004 the subject's shareholders are:
Vedanta Resources plc (51.0%) ZCI Holdings S.A. (28.4%)
and ZCCM-Investment Holdings Plc
(20.6%). In 2002,
subject absorbed operations of its subsidiary KMC
Smerteco LTd. The latter subsequently became subject's
division.
C.R. No. : 43628
Authorized
Capital : US DLRS 300,000,001
Paid up
Capital : US DLRS 70,386,775.73
Public
Limited Liability Company with the following shareholders :
1. Vedanta
Resources plc 51.0 %
(listed on London Stock Exchange)
2. ZCI
Holdings S.A. 28.4 %
Luxemburg
3.
ZCCM-Investment Holdings Plc 20.6 %
4.
Government of the Rupublic
of Zambia 1
special share
ACTIVITIES
The
Company is involved in the following activities :
Mining of
copper, cobalt, pyrite and anode slimes.
Subject
operates the following integrated business unit divisions :
1. Konkola
Division
2. Nchanga
Division (including the Chingola refractory ore
stockpiles)
3.
Nampundwe pyrite mine
4. KCM
Smerterco Division
It was
incorporated in Zambia in April 2000 as a wholly owned subsidiary of ZCCM
Investment Holding. In September 2002 it became a division of Komkola Cooper
Mine Plc.
Production
capacity :
Refined
copper 220 00MT p.a.
Pyrite 90
000T p.a.
Anode
slime 250 250T p.a.
Imports
from South Africa, UK France, Sweden, Canada, USA, Australia and India.
Exports to
China, Egypt, Saudi Arabia, Hong Kong, Thailand, Pakistan, South Korea and
India.
FACILITIES
The
Company has the following facilities :
Rented
Head office premises located at the heading address and additional offices in
Lusaka and in Chililabombwe (see "Branch Offices" below).
Subject
has 3 mines : Konkola Mmine, Nchanga Mine and Nampundwe Pyrite Mine.
BRANCH OFFICES
1. Konkola
Integrated Business Unit (IBU)
Chililabombwe
Tel : (260 2) 350 001-3
Fax : (260 2) 351 234
Comprises
four operating units, namely No 1 shaft, No 3 shaft, the Concentrator and
Support Services specific to Konkola Mine.
2. KCM
Nkana Integrated Business Unit (IBU)
Kitwe
Tel : (260 2) 350 001-3
Fax : (260 2) 351 234
Comprises
four operating units namely, Smelter, Refinery, Acid Plant and Support Services
specific to KCM-Nkana
3. Nchanga
Integrated Business Unit (IBU)
Chingola
Tel : (260 2) 350 001-3
Fax : (260 2) 351 234
Comprises
five operating units, namely, Nchanga Open Pit, Nchanga Underground, Nchanga
Concentrators (East Mill and West Mill) the Tailings Leach Plant (TLP) and
Support Services specific to Nchanga Mine.
4.
Nampundwe Integrated Business Unit (IBU)
Lusaka
Tel : (260 2) 350 001-3
Fax : (260 2) 351 234
Comprises
three operating units namely, Underground Mine, Concentrator and Support
Services specific to Nampundwe Mine.
RATING EXPLANATIONS
RATING
|
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely
sound financial base with the strongest capability for timely payment of
interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate
working capital. No caution needed for credit transaction. It has above
average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial &
operational base are regarded healthy. General unfavourable factors will not
cause fatal effect. Satisfactory capability for payment of interest and
principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is
considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable &
favourable factors carry similar weight in credit consideration. Capability
to overcome financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are
apparent. Repayment of interest and principal sums in default or expected to
be in default upon maturity |
Limited with full
security |
|
<10 |
C |
Absolute credit risk
exists. Caution needed to be exercised |
Credit not recommended |