Press Release

Issued by

Zambia Consolidated Copper Mines

Public Relations Department

SALE OF CHIBULUMA MINE

LUSAKA: Thursday 31 July 1997 - Mr Luke J Mwananshiku, Chairman of Zambia Consolidated Copper Mines Limited (ZCCM), on behalf of the Board of Directors of the Company, is pleased to announce today the sale of Chibuluma Mine Assets to METOREX CONSORTIUM. This is a follow-up to the on-going privatisation of ZCCM.

Chibuluma Mine Assets comprise the following:

Chibuluma South and West Orebodies; the mining and ancillary equipment necessary for the operation of the Chibuluma West mine; and Social assets. The social assets constitute the operation of Kalulushi town (roads, water, sewerage and parks); Kalulushi Hospital; Kalulushi Trust School; and the general upkeep of town and mine facili ties.

The Metorex Consortium is made up of:-

  1. Crew Development Corporation - A Canadian development company
  2. Genbel Limited (formerly Randex Limited) - A mining finance company
  3. Metorex (Pty) Limited and Maranda Mines Limited - South African junior mining companies.
The Metorex Consortium have undertaken to develop Chibuluma South immediately over 36-48 months period in order to cover production shortfalls arising from gradual cessation of operations at Chibuiuma Mine within 5 years. The development of Cbibuluma South will ensure that the labour force which will be retrenched at Chibuluma Mine will subsequently be partly absorbed at Chibuluma South. Metorex has also undertaken to run the hospital and trust school in Kalulushi until these institutions are subsequently privatised. The envisaged privatisation of elements of the engineering functions, the hospital, and the school will allow meaningful development opportunities for a number of Zambian citizens.

The Metorex Consortium will bring to the Copperbelt a mix of Canadian finance and exploration philosophies together with South African financial and junior mining skills suitable for a junior mining project such as Chibuluma. It is the Consortium's intention to commence shaft sinking on the drill proven Chibuluma South orebody as soon as engineering studies have been finalised in order to commence production as the Chibuiuma West ore reserves become depleted.

"The privatisation of Chibulurma Mine Assets guarantees the development of Chibulurna South. It is also in line with one of the Zambian Government's privatisation objectives of diversifying the ownership of the mining industry on the Copperbelt and ensures that Kalulushi Town will not be a ghost town after the cessation of mining at Chibuiuma Mine", added Mr F H Kaunda, Chairman of the ZCCM Privatisation Negotiating Team.

Under the international tender for the privatisation of ZCCM the Chibuluma Mine Assets were included as part of Package ACo. With the above-mentioned sale, the Chibuluma Mine Assets have been removed from Package ACo, yet to be sold.

The award of the Chibuiuma Mine Assets to the Metorex Consortium is subject to contract and the documentation is expected to be completed soon.

Enquiries:

ZCCM Public Relations Department: Telephone: 260-1-220572

Postal Address:
5309 Dedan Kimathi Road,
P.O Box 30048,
LUSAKA,
ZAMBIA.

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