As African Business went to press the sale of Zambia Consolidated Copper Mines (ZCCM) was on the brink of completion in what is being hailed as the biggest step yet towards the country's transformation into a private sector dominated economy.
While the privatisation of the mining giant's five divisions, in the form of 11 separate investor packages, took several months longer than originally scheduled, a steady growth in Zambia's copper output is now on the horizon. Anticipated capital expenditure of $2.5bn over the next 5-7 years is expected to improve efficiency and expand current operations.
The sticking point in the privatisation programme has been the sale of the key "A package", consisting of the Nkana and Nchanga divisions which together boast five underground mines, an open pit mine and concentrators, a copper smelter and refinery, a tailings leach plant, an acid plant and a cobalt plant.
Their copper reserves represent 54% of ZCCM's total and are said to be greater than reserves found in the whole of western Europe. While this is yet to be completely finalised, sources close to the negotiations intimated that a cash up-front payment of $250m had been agreed upon between ZCCM and the Kafue Consortium, a group of investors led by South Africa's Avmin and including Canada's Noranda, the USA's Phelps Dodge, and the UK's Commonwealth Development Corporation (CDC).
Minor issues remain to be resolved and the investors appeared unphased by the abortive coup attempt of 27 October. Indeed there was barely even a blip in the normally jittery world copper price.
While the Zambian government and ZCCM have expressed disappointment over the amount offered by...