WASHINGTON, D.C., March 31, 2000 – Thousands
of jobs will be saved and a key industry for Zambia will be revitalized
with the purchase and refurbishment of a newly privatized copper mine.
The International Finance Corporation will invest US$30 million to acquire
7.5% equity interest in Konkola Copper Mines Limited (KCM), which will
rehabilitate and operate the main privatized assets of Zambia Consolidated
Copper Mines Ltd. (ZCCM). The Konkola and Nchanga Divisions of ZCCM and
the Nampundwe pyrite mine will be restored for an estimated total of $345
million. The project sponsor is Anglo American plc through its subsidiary,
Zambia Consolidated Industries (ZCI).
The World Bank Group has supported the privatization of ZCCM as a necessary
step to mobilizing the capital, technology, and management needed to restore
the ailing company and the copper mining sector to financial and operational
health. The privatization and proposed investment program will preserve
9,000 direct jobs, and several times that number indirectly. Gross exports
are forecast at more than $400 million annually.
IFC's involvement in the acquisition and renovation of the mines -- the
final phase of the privatization of ZCCM – was pivotal, since the sponsor
had indicated it would not proceed without IFC's involvement. According
to James Bond, Director of Mining Department, this investment –
the first by the newly formed mining global product group of the World
Bank and IFC – is the kind of project where IFC truly adds value, by resuscitating
an ailing industry, providing work for the people and income for Zambia,
and by ensuring high standards of environmental protection that can serve
as a benchmark for the Zambian mining sector.
Earlier, the International Development Association – the soft loan window
of the World Bank – financed external legal and financial advice on the
privatization of ZCCM. IDA is also preparing a Mining Municipal Services
Project for the continued provision of municipal services in the copperbelt
region and is considering a project to help ZCCM manage environmental impacts
at the facilities which are being retained by ZCCM.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets
and provides technical assistance and advice to governments and businesses.