KCM has agreed to pay US$119,744,655 (about KR637.6 million) over a three-year period to government as part of the price participation settlement agreement that was designed to allow ZCCM-IH benefit from a long-term increase in copper prices.
And Konkola Copper Mines (KCM) public relations manager Joy Sata says the mining firm will continue supporting all government efforts to strengthen the Zambian economy.
According to a statement issued by Stockbrokers Zambia, KCM and ZCCM Investment Holdings (ZCCM-IH) have entered into an agreement pursuant to which certain outstanding payments owed by KCM to ZCCM-IH and other amounts payable dating back to March 2000 would be settled.
"Concurrently with the entry into the settlement agreement on February 11 2013, the price participation agreements dated March 31, 2000 were terminated. The price participation agreements were put in place at the time of the privatisation of Zambia's copper mining industry as part of the consideration and were designed to allow ZCCM-IH to benefit from an increase in the price of copper over the long term," it stated.
"Due to the complex mechanics for calculating the amount due and payable under the price participation agreements and the contingent nature of payments likely to arise in the remaining life of the price participation agreements, the parties have worked to put in place a new agreement with an unconditional and clear payment plan."
Under the settlement agreement, US$46,324,655 is required to be paid by KCM (through installments) to ZCCM-IH on or before August 31, 2013, and a further US$73,420,000 (through installments) on or before September 30, 2016.
It stated the total amount payable under the settlement agreement remains broadly unchanged (in dollar amount terms) from the amounts that were due and would likely have become payable under the price participation agreements over time.
"However, ZCCM-IH considers the increased certainty of the payment obligations as additional cash flow benefits that will assist ZCCM-IH in its day to day business operations and future investment plans," it stated.
And Sata said KCM would continue supporting government efforts to strengthen the country's economy.
"At KCM we believe our partnership with the government is helping to create a stronger, brighter future for our nation and for our investors: it's the way business should be," said Sata, in response to a query over the position of KCM on the new BoZ Act.
The government has made amendments to the Bank of Zambia Act whose objective is to regulate foreign exchange inflows and outflows and amounts remitted, and monitor international transactions in services and investment in the form of equity and debt securities abroad.
The Act also seeks to regulate international money transfers into and out of Zambia and monitor profits and dividends received in respect of investments abroad.
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