Washington D.C., February 8, 2002—
A team of experts from the World Bank’s private sector lending arm, the International Finance Corporation, has been in Zambia for discussions on the future of the Konkola Copper Mine plc. (KCM) with the government of Zambia.
This follows the January 23, 2002 announcement by KCM’s major shareholder, Anglo American, that it was considering selling its Zambia-based mining operations.
IFC experts underscored their commitment to ensure the deployment of the resources necessary to mitigate the impact on the Zambian economy and the workers directly affected.
“We remain one hundred percent committed to Zambia and to developing its economy,” said James Bond, Director for Mining of the joint World Bank-IFC department. “However, recent events have caught us all by surprise and it would be prudent to take the time to examine the various options. We feel that a financial workout—which would leave a restructured KCM as a going concern—needs to be examined as a viable alternative to immediate closure. IFC and the World Bank are committed to assisting Zambia through this transition. A vast array of issues remain as yet unresolved and we need time to review these before we make any decisions about the terms and structure of the workout and IFC’s participation,” he added.
Mr. Bond recalled the positive impact that the KCM project had on the surrounding communities with the growth of local and regional business and community development initiatives, increased employment and income opportunities, and new investment opportunities in the Copperbelt region—all of which would be affected by a possible closure of the mines.
IFC experts are looking at various scenarios, including the sale of KCM, transfer of assets, or outright closure of the mines; as well as the social impact on the country’s Copperbelt region. Meanwhile, the World Bank and the government are studying an economic diversification program which will help Zambia phase out of its single commodity economy, Mr. Bond underlined.
KCM was created two years ago by the privatization of Zambia Consolidated Copper Mines (ZCCM). KCM is owned 65 percent by Zambia Copper Investments Limited, which is 50.9 percent owned by Anglo American; 7.5 percent by IFC; 7.5 percent by the CDC Group plc; and 20 percent by ZCCM Investments Holdings, which is 87.6 percent owned by the Zambian Government. In addition, IFC has provided technical assistance to develop supply chain linkages between KCM and small and medium enterprises.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to 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. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
