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
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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.
