Summary of Proposed Investment
Project Number
8570
Company Name
Konkola Copper Mines Plc
Date SPI Disclosed
Dec 22, 1999
Country
Zambia
Industry
Metals and Mining
Status
Completed
Sector
Copper
Department
Infra-WBG Dir. Minerals & Metals
Environmental Category
A - Significant
Previous Events
Approved : Feb 22, 2000
Signed : Mar 28, 2000
Invested : Apr 3, 2000
Project Description
Summary Of Project Information (SPI)
| Project Name | Zambia - Konkola Copper Mines plc |
RegionSub-Saharan Africa
Sector
Project No008570
Projected Board Date27 January 2000
Company NameKonkola Copper Mines plc (KCM)
Technical Partner and/or Major Shareholders
Zambia Copper Investments Ltd. (ZCI), an Anglo American plc (Anglo) subsidiary, will be a major shareholder with 65% of Konkola Copper Mines plc (KCM). Zambia Consolidated Copper Mines Ltd. (ZCCM) will own 20% and IFC and CDC Group plc are expected to each own 7.5% of KCM.
Project Cost Including proposed IFC investment
Total project cost is estimated at $260 million to be financed by equity subscriptions and shareholder loans. IFC''s investment is expected to be $30 million in equity and shareholder loans.
Location of project and Description of site
The project is the purchase and 2-year rehabilitation program of the mining and processing facilities of the Konkola, Nchanga and Nampundwe divisions of ZCCM. The Konkola and Nchanga divisions are located on the Zambian Copperbelt about 250 km from Lusaka, the capital of Zambia. The Nampundwe division is located 80 km from Lusaka.
Description of Company and Purpose of Project
KCM will initially focus on the rehabilitation of the assets, with virtually all aspects of the mining and milling facilities at each of the mines being refurbished and/or upgraded. The assets have suffered from many years of underinvestment, declining production and high operating costs and it will take a number of years to rehabilitate the assets, improve management and reduce costs. Production is expected to increase from the current annualized level of 180,000 tpa of finished copper to over 220,000 tpa of copper. Concentrate would be railed to the existing Nkana smelter and refinery for processing. The Nkana smelting and refining facilities will continue to be owned by ZCCM for the time being but will be managed by Anglo American plc.
The copper industry is the most important sector in Zambia, representing 80% of the country’s total export. The revitalization of this industry in a sustainable manner is, therefore, crucial for the country, and has been a key component of World Bank Group strategy. The KCM assets are the essential part of this privatization, and IFC involvement would provide the final impetus to allow their successful privatization, which would create a significant development impact.
Environmental Category and Issues
This is a Category A project. Existing environmental data is extensive and indicates that the existing sites produce adverse environmental impacts of a sensitive and diverse nature. Key environmental issues include: emissions of gaseous and particulate pollutants (particularly from the Nkana smelter); liquid effluent discharges; contaminated land; solid and liquid waste management; tailings dam stability; handling and storage of hazardous materials and; reclamation and closure. Occupational Health and Safety Issues include safety technology, safety management, compliance with occupational exposure limits, personal protective equipment and employee training.
Privatization of the mines and associated facilities and future construction and expansion activities will result in a range of significant social impacts. Retrenchment of the workforce and interim management arrangements for the transfer of responsibility for the provision of services such as health, education, housing, water, sanitation and power are being negotiated between Anglo, ZCCM and the World Bank and will need to be carefully monitored. Other important social issues that have been considered include: public consultation and disclosure; involuntary resettlement; cultural property; health and safety; informal activities and settlements on the concession; anticipated population influx; and maximization of local employment and entrepreneurial opportunities linked to mining operation.
The is from the InfoShop.
| Host country location of environmental documents | 1. Lusaka (World Bank Office) P.O. Box 35410 Lusaka, Zambia10101 2. Kitwe (ZCCM Nkana offices) Operations Centre P.O. Box 20172 Kitwe, Zambia 3. Chililabonombwe (ZCCM Konkola offices) P.O. Box 210001 Chililabonombwe, Zambia 4. Nchanga (ZCCM offices) P.O. Box 10063 Chingola, Zambia |
Date revised SPI sent to InfoShopJanuary 3, 2000
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
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