Zambia Consolidated Copper Mines (ZCCM) was sold in 1998 for a total price of US $627million, which was divided into 7 sections as follows:
– Konkola Copper mine was $25million,
– Kansanshi Mine was $28million,
– Luanshya mine was $35million,
– Chibuluma mine was $20million and others.
At this time, the prices of our copper had dropped from $2,300/ ton in 1997 to about $1,500/ton in 1998 and remained at that level till 2003.
The Government of Zambia was subsidizing the mines by approximately $1million per day! That was way too expensive to run the mines.
“We were told by advisors, who included the IMF and the World Bank that, for the next 20years, Zambian Copper would not make a profit, but if we Privatized, we would be able to ACCESS debt relief, and this was a huge carrot in front of us. WE HAD NO OPTION BUT TO SELL,” Former Minister of Finance, Edith Nawakwi said.
Privatization of ZCCM commenced in 1996, after the government and the boards of ZCCM and the Zambia Privatization Agency (ZPA) approved the ZCCM Privatization Report and Plan presented by the UK based Financial and Legal advisors, NM Rothschild & Sons and Clifford Chance, respectively.
On 11th of March, 1997, Fredrick Chiluba appointed Francis Kaunda to be Chairman of ZCCM Privatization team. He was hired based on two reasons given by the then President,
(1). His knowledge on mining assets, and
(2). Credibility with Investors in the mining industry. Francis Kaunda had close to 3 decades of experience working at the top of mine business in the country from 1974 to 1991 when he was retired without reason when there was a change in government, but his vast knowledge prompted Chiluba to call him back in 1997 to handle the Privatization Process. ZCCM Privatization team hired local experts and formed 3 groups during its transformation plan of 1998;
– First group was to sell CORE assets, and this was headed by Norman Mbazima and John Patterson. ‘Core Assets’, an essential, important or valuable property of a business without which a company cannot carry on with its profit-making activities. A business would dissolve without its core assets, and companies that sell off core assets are usually liquidating and on the verge of bankruptcy.
– Second group was to sell SUBSIDIARY assets, and this was headed by Hakainde Hichilema. ‘Subsidiary’…a company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company or holding company.
A subsidiary is a company that is partly or completely owned by another company that holds a controlling interest in the subsidiary company.
– Third group was to dispose of miscellaneous items and this was headed by Mwila Lumbwe. For the legal Services, Elias Chipimo Jr, who graduated from Oxford University with a Bachelor’s Degree in Civil Law, was hired. His main area was Corporate Law, Advisory work on Merges and Acquisitions, Privatizations and. Capital market related work.
In 2002, Levy Mwanawasa launched Zambia’s largest anti- corruption crackdown since independence. He also believed that there was a lot of corruption during the Privatization process. In August, 2008, Francis Kaunda was jailed for 2 years, after he was convicted by the courts of law together with Faustin Kabwe, a prominent business man at the time. His case was that he took ownership of one of the most prestigious school run by ZCCM, Ndola Primary School, and offered it to Ndola trust School for sale. The problem was that the school was not sold to the right buyer as per privatization guidelines, Ndola Trust School was not yet registered as a company so he sold to a non- existent company which belonged to his friend, Faustin Kabwe, and did not declare interest. To make matters worse, Ndola Trust School tendered their bid after the closing date. His arrest had more to do with his personal interests and trying to defraud the government.
Now, let’s look at Hakainde Hichilema. We have found no evidence from his team to attempt to defraud the government. He was investigated as much as everyone who was involved was. He still walks a free man and has never been arrested based on the Privatization process. He was not at the core of the process; he was a small fish in the river. There was no way he could sell a mine.
There was ZCCM, Zambia Privatization Agency (ZPA), Zambia Development Agency (ZDA), Zambian Government, IMF, World Bank, Francis Kaunda as Chairman, and finally Consultants where Hichilema belonged. For him to sell a mine, he had to bypass all these big fish in the river. How slick must he be to do this? we hope Zambians can now know the truth and never be told lies. His role was not to sale the assets but conduct a valuation exercise and he quoted FTJ and his men how much he would charge them to conduct such an exercise. He did the job and was paid, if he didn’t do the job, we would have something to say, so HH is as clean as an angel.
The mines were a dead business, we were selling businesses that were not profitable at all. and because the IMF had advised that the low prices would continue for 20years, the buyers knew that they were going to make losses in. their initial stages.