Govt won’t entertain FQM’s offer to buy shares in Kansanshi – Musukwa

Mines Minister Richard Musukwa says government will not entertain First Quantum Minerals’ offer to buy off ZCCM-IH’s minority shareholding in Kansanshi Mining Plc.

Earlier this month, reports emerged that FQM had offered to buy off government’s stake in Africa’s biggest copper producer at US $700 million.

The Vancouver-based mining giant already owns 80 per cent of Kansanshi, while ZCCM-IH Plc holds the remaining 20 per cent shareholding.

But featuring on ZNBC’s Government Forum, Monday evening, Musukwa, who clarified that government through ZCCM-IH only owned about 17 per cent in the Solwezi-based mine, explained that the State had no intention of selling off its shares because it wanted to continue having a stake in the country’s resources.

Musukwa wondered why FQM had offered to buy off government’s shares in the mines, emphasising that the offer would not be entertained.

“A decision of a magnitude such as the sale of shares in ZCCM-IH would only be arrived at by Cabinet. I want to confirm to you that there is no such a decision by Cabinet and I am very confident that government and Cabinet will be very reluctant to undertake such a route, and us as a Ministry who are the custodian, we would like to continue to have stake in various mining houses on behalf of Zambians. And you must know first of all that that was an unsolicited offer and we will not entertain it because we would like as government to continue to have a stake in various mining houses, if not to increase so that we own this in trust of the people of Zambia. So, we certainly don’t think that that is the trajectory to go,” Musukwa said.

“Then one would ask the question, why the offer? That’s the question we are asking, why the offer? Really, we think that the offer may be there, but as a Ministry and government, we are certainly not going to entertain that! We are actually looking to have stake in other operations that are coming, that’s why we would like to ensure that we transform ZCCM-IH, not just to be an entity that hosts interest on behalf of Zambians, but also a vehicle that hosts mining rights and operations on behalf of Zambians. Not just to wait for stakes, [but] also to participate as an operation so that we look forward to an opportunity where we can have an operation that is owned by ZCCM-IH and we are able to mirror the cost profile of mining houses in relationship to what an indigenous company is doing in Zambia. As government, I can tell you that certainly we don’t want to undertake a process that in future posterity will begin to judge us harshly. We think that our interest in Kansanshi at 17 per cent is fair and that we need to continue to participate.”

And Musukwa said he would ensure the Mineral Revenue Sharing Act was taken back for legislation to ensure that host communities for mines received their fair share of the mine resources.

“The mineral revenue sharing mechanism is a platform that government and several stakeholders would like to see come back to the legislation. And at that time, the piece of legislation was shelved in order to ensure that it is fine-tuned. The resources that we own on behalf of Zambia, government has a duty to redistribute across the Republic, and we are also of the view like many stakeholders that, yes, indeed, host communities must be the key beneficiaries. The mismatch that exists in terms of the host communities and mining entities in terms of operations do not commensurate in terms of fighting poverty and also contribution in terms of changing the livelihood of our people. So, certainly, this is a piece of legislation that my Ministry and government is interested to see how it can be revitalized and put back into the legislation so that key resources must be able to go on host communities because this is a diminishing resource and the most affected people once the mining operations come to an end are the host communities for these resources. But as a government, we are also mindful that we have a duty to ensure that we distribute the resources across the country,” Musukwa said.

Meanwhile, Musukwa regretted that mining safety standards deteriorated significantly last year.

“I must say upfront that any mining operation that doesn’t anchor its operation on safety is an operation that the Ministry will not encourage because safety is our priority. But for 2018, I must say that it was not one of our best years in terms of safety. We lost quite a number of people across the industry, so what we have done this year is that this time around, it’s to up the game and ask mining houses to put a higher premium in terms of safety and invest heavily in terms of safety equipment,” said Musukwa.




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