Mines Minister Paul Kabuswe has explained that ZCCM-IH did not sell, transfer, or dispose of any of its shares in Mopani Copper Mines (MCM) in the transaction that resulted in the revival and recapitalization of the mine by Abu Dhabi firm, International Resources Holding (IRH) earlier this year.
Delivering a ministerial statement in the National Assembly on the Speaker’s orders after the matter was revived in the house last week, Kabuswe said that before the transaction, ZCCM-IH owned 100% of Mopani’s equity, amounting to 6.9 million (6,900,000) shares.
Following the bidding process for a strategic equity partner from which IRH emerged successful, Mopani increased its share capital by issuing new shares, which were subscribed for by IRH’s wholly-owned subsidiary Delta Mining Limited.
The additional 7,181,633 shares brought Mopani’s new share capital to 14,081,633 out of which ZCCM-IH maintained its 6,900,000 now worth 49% of the mine’s share capital while IRH—through Delta—owns 51% equivalent to 7,181,633 shares (the new shares).
Therefore, the dilution effect on ZCCM-IH was not because any of its shares were sold but because it arose from the issuance of new shares to increase the share capital, allowing the new strategic equity partner to acquire shares for a consideration of US$1.1 billion.
Kabuswe said on this basis, the Attorney General guided that the transaction did not need to go before Parliament because neither a sale, transfer, nor disposal of shares of a state asset had occurred.
He said the government was not capable of selling shares it did not own because it did not own any shares in Mopani.
“At law, the government is a single entity. ZCCM-IH, a different individual. Mopani is another individual. The government owns shares in ZCCM-IH, it doesn’t own shares in Mopani. The one that owns shares in Mopani is ZCCM-IH. Even if there was a sale, which there wasn’t, the sale couldn’t have taken place between the government and Mopani because they are two different entities. The relationship is between Mopani and ZCCM-IH, who has shares in Mopani,” he stated.
Since the transaction happened earlier this year, there have been many accusations of illegality and noise from several politicians demanding that the government explain why the “sale” of ZCCM-IH shares in Mopani was not taken to Parliament as supposedly required by the law.
