| Mon 19 Aug 2002, 0:00 | | Anglo American Plc - Press Release |
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Anglo American plc - Press Release
ANGLO AMERICAN PLC
(the "Company")
ISIN code : GB0004901517
Issuer code: ANAAL
Alpha code : AGL
Anglo American announces agreement on the future of the Konkola Copper Mines
("KCM") in Zambia
On 24 January 2002, Anglo American plc ("Anglo American") announced that, in
view of the substantial losses suffered by KCM, the weak outlook for the copper
and cobalt markets and the non availability of project finance for the Konkola
Deep Mining Project, Anglo American could not justify investing further funds in
KCM over and above those committed at the time of vesting.
Anglo American is pleased to announce that agreement has now been reached with
the Government of the Republic of Zambia ("GRZ"), ZCCM Investments Holdings plc
("ZCCM"), the International Finance Corporation ("IFC"), CDC Group plc ("CDC")
and Zambia Copper Investments Limited ("ZCI"), subject to regulatory approval,
to restructure KCM and for the withdrawal of Anglo American, IFC and CDC as
direct or indirect shareholders of KCM.
Since the announcement on 24 January 2002, Anglo American, through ZCI, has
contributed US$82 million to KCM, in order to maintain operations while
negotiations have taken place with the other stakeholders. Anglo American, GRZ,
ZCCM, IFC, CDC and ZCI have now agreed to the following:
In addition to the US$82 million already expended, Anglo American has agreed to
contribute US$30 million in cash to KCM and up to US$26.5 million as a loan on
favourable terms, in order to keep the mines operating.
Transitional management arrangements have been agreed and Anglo American will
provide certain services until 31 March 2003, in order to ensure a smooth hand
over of management responsibility to the new board of directors of KCM.
The IFC and CDC have both sold their interests in loans to KCM and ZCCM in
exchange for a payment by Anglo American of US$25.4 million to each of them.
Through a series of transactions, KCM and ZCCM (SmelterCo) Limited ("Smelterco")
will be restructured such that the new shareholders of KCM will be: ZCI 58% and
ZCCM 42%. KCM will own and operate the Konkola mine, the Nchanga underground
and open pit mines, the Nampundwe pyrite mine and the Nkana smelter and
refinery, all of which are in significantly better condition than at the time of
privatisation as a result of the capital investment programme funded by Anglo
American. At the conclusion of the transactions both KCM and ZCI will be
substantially debt-free.
Anglo American will establish an independent company, the Copperbelt Development
Foundation, and will transfer a 41.4% shareholding in ZCI to the Foundation. The
Foundation will use any income from ZCI to invest in projects aimed at
diversifying the economy of the Zambian Copperbelt and mitigating the social
impact of the eventual closure of the KCM mines. The balance of ZCI shares held
by Anglo American will be transferred to an employee incentive scheme intended
to align the objectives of the new KCM management team and employees with those
of the new shareholders.
At the time of the statement regarding its withdrawal, Anglo American announced
a provision of US$350 million against its investment in KCM. The agreement now
reached with GRZ, ZCCM, IFC, CDC and ZCI requires Anglo American to provide an
additional amount of US$34 million, over and above the US$350 million already
provided, in full and final settlement of all liabilities in relation to KCM.
Commenting on the agreement, Simon Thompson, Chief Executive of Anglo American
Base Metals Division and retiring Chairman of ZCI and KCM said: "The
finalisation of these complex negotiations allows KCM to continue to operate, in
accordance with the objectives of the Government, and provides an opportunity
for Zambia to diversify its economy and reduce its dependence on copper. The
newly formed Copperbelt Development Foundation, endowed by Anglo American, will
work with other stakeholders in pursuit of this goal.
Despite incurring substantial losses, Anglo American has demonstrated its
commitment to acting in a socially responsible manner with regard to its
withdrawal from KCM and has also protected the interests of the minority
shareholders in ZCI by providing them with a debt-free vehicle in which they can
continue to participate in the future of KCM."
19 August 2002
For further information:
Anglo American - London
Investor Relations
Nick von Schirnding
Tel: +44 207 698 8540
Media Relations
Kate Aindow
Tel: +44 207 698 8619
External Affairs
Edward Bickham
Tel: +44 207 698 8547
Anglo American - Johannesburg
Investor Relations
Anne Dunn
Tel: +27 11 638 4730
Media Relations
Marion Dixon
Tel: +27 11 638 3001
External Affairs
Michael Spicer
Tel: +27 11 638 3870
Notes to Editors:
Prior to the above agreement the shareholders of KCM were:
ZCI (50.9% owned by Anglo American) - 65%
ZCCM (87.6% owned by the GRZ) - 20%
IFC - 7.5%
CDC - 7.5%
As a result of the above agreement, the new shareholders of KCM will be ZCI
(58%) and ZCCM/GRZ (42%).
Anglo American plc is one of the world`s largest mining and natural resource
groups. With its subsidiaries, joint ventures and associates, it is a global
leader in gold, platinum group metals and diamonds, with significant interests
in coal, base and ferrous metals, industrial minerals and forest products. The
group is geographically diverse, with operations in Africa, Europe, South and
North America and Australia. (www.angloamerican.co.uk)
Date: 19/08/2002 04:27:00 PM Produced by the JSE SENS Department
