Ndola lime closed

Ndola lime closed

 

Dear Editor,

I am surprised that the mainstream media is not covering an important story that broke last month whose consequences threaten the livelihoods of Zambians and would have an adverse impact on the economy of Ndola. One of the oldest and most viable corporations and state-owned enterprises in Copperbelt, Ndola Lime Company Limited, was placed under receivership. The Lusaka High Court appointed Mrs Natasha Kalimukwa as interim Administrator on 5 October 2018, in accordance with the Insolvent Act of 2017.

 

Mrs Kalimukwa addressed the employees of Ndola Lime on 31 October 2018 and announced that her office has 4-12 months to review whether the company should be liquidated, restructured or sold. Today, 6 November, she is meeting Ndola Lime Creditors at Njele Park in Ndola to decide how to dispose of the assets of Ndola Lime in order to pay the creditors, who are owed in excess of $85 million. Meanwhile all the production units have been shut as the Receiver has refused to release working capital for purchase of fuels to run the mining and kilning operations. The fate of about 250 employees and contractors remains unknown, as the shareholders on behalf of GRZ, ZCCM Investments Holdings and IDC have no interest in the survival of Ndola Lime.

The government has completely neglected Ndola Lime and its employees. The CEO of IDC and CEO of ZCCM Investments Holdings, Mr Mateyo Kaluba and Dr Pius Kasolo respectively, are also Board members of ZCCM which resolved in July 2018 to liquidate Ndola Lime, in order to remain with only the Limestone Quarry and Mine Licence Area which has proven reserved of over 100 years’ worth of Limestone required as input into the Cement Plant that is being constructed by Sinoma of China as a JV with ZCCM Investments Holdings.  To this effect, ZCCM has been in talks with Jinchuan of China, the mining corporation with majority stake in Metorex Chibuluma Mines of Kalulushi. ZCCM CEO Dr Kasolo, COO Mr Mabvuto Chipata and Company Secretary Mr Chabi Chabala travelled to China and held meetings with Jinchuan and offered to sell Ndola Lime at a song. In order to ensure that the selling price of the company assets was very low, a bogus evaluation exercise was carried out and most Ndola Lime assets were impaired, thus devaluing the balance sheet to portray the value of assets at less than $15 million dollars. The equipment bought using a loan of $120 million from Stanbic was impaired on simplistic assumptions that it was a failed project. If sold to Jinchuan at $15 million, that will be a worse scandal than Mwanawasa’s sale of KCM to Vedenta Resources in 2002, an amount that was recovered in less than 3 months of sales of already mined ore. The PF government is negating its mandate to protect national assets and create jobs for the people. Instead, GRZ has granted Dr Kasolo and Mr Kaluba a licence to kill a beautiful company with over 87 years of uninterrupted operations and to consequently destabilize the livelihoods of over two hundred families in preference for handing over assets to the Chinese at a song.

The collapse of Ndola Lime is squarely the fault of the shareholder, ZCCM Investments Holdings, for failing to foster professionalism, correct governance and strategic oversight in the institution, as shown by the following:

  1. INCOMPETENT CEOS

CEOs of Ndola Lime are never picked from among the best on the job market; they are employees of the shareholder, ZCCM IH, who are sent to Ndola Lime as a way of getting rid of them from the mother Company. At the point when Ndola Lime was booming in 2009, industrial action by workers forced the resignation of Mr Amis Daudi in July 2009. Instead of searching for a CEO with the caliber of Mr Daudi or better, the then Acting CEO of ZCCM Investments Holdings, Mr William Musama, seconded a personal friend and a junior officer from the ZCCM Technical Department , Mr Abraham Witika, to become CEO of Ndola Lime. The consequences of incompetence of Mr Witika drove the company from profit-making to highly-indebted status within 6 years due to major errors on strategy – poor project management, bloating the workforce, corruption in procurement , marketing ignorance and lack of financial controls. The reign of Witika was a disaster for Ndola Lime.

The exit of one failure was met with the entry of a worse failure. In 2016, Dr Pius Kasolo appointed another junior officer and obsolete Mining Technician, Mr Moses Chilambe, from the ZCCM office in Kalulushi to be CEO of Ndola Lime. Mr Chilambe is just another clueless clown with absolutely no knowledge of management principles. Within two years he has managed to destroy the company by consistently implementing wrong ideas – he fired all competent operators and replaced them with trainees who ended up causing an explosion of a $100 million investment (kiln) causing irreparable damage; he suspended the pumping of water from the Quarry causing the flooding of the mine; he misapplied the money availed by the shareholders on a witch-hunt instead of the intended objective to reduce the labour costs. Instead of paying  retirees and those that had resigned, money was spent on retrenching skilled people and perceived enemies; he presided over the rebasing of the value of the assets of Ndola Lime to $15 million in order to facilitate sale of the company to the Chinese; he failed to manage working capital and hence the company has been failing to procure production inputs nor maintain equipment; he has failed to produce and sell in order to get money; he abolished the office of Internal Auditor and ensured that he is not checked as he is the only one authorizing orders and signing cheques for goods and services. The company is running like a circus that is reacting to consequences of wrong decisions. Mr Chilambe retrenched senior managers that understood the lime business. He is a coach that has fired all the players, but expects to win the game. The most catastrophic crime of all was to ensure that an important audit by the Office of the Auditor General was downplayed and the Auditor, Mr Tembo, was assisted to drop all major findings of corruption in the Audit that had unearthed corruption in the procurement and implementation of major projects – inflated price of equipment for the Recapitalization Project; inflated cost of a small Blockmaking Plant and the subsequent purchase of products by Ndola managers; procurement and installation of expensive environmental-protection units that never worked; procurement of underspec Grinding and Crushing Units.

  1. INCOMPETENT BOARD OF DIRECTORS

The CEO of ZCCM Investments Holdings appoints the Board of Directors of Ndola Lime. Half the Ndola Lime Directors, including Mr Mabvuto Chipata and Mr Chabi Chabala are also managers of the shareholder, ZCCM. What a corporate governance circus. The Ndola Lime Board is supposed to provide oversight of the company. However, looking at the comedy of errors committed in the last 10 years, it is clear that the Board was incompetent. The Board was also a drain on resources as the sitting allowance is $1000 per person per meeting. That was their area of focus, not the welfare of the company

  1. INCOMPETENT INVESTMENT 

In 2007, ZCCM approved the construction of a new Lime Plant using borrowed money. They appointed a Project Team, with Mr John Chongo, as Project Manager and other old retired engineers from the copper mines were recruited to help him construct a new plant. Over a period of 10 years, money was borrowed and plants were set up. However, the plants could not work because the specification were wrong, the plants were conceptualized by people that did not know the lime business and the units were bought from an Italian company that has no history of having ever made similar plants. The Italian company has since closed and declared bankrupt while the Plant at Ndola Lime exploded and has been abandoned after gobbling over $100 million. The compromised Auditor General’s report found just minor shortcomings in project implementation and no one has been made to account for having misused such a colossal amount of money on a wasted project. All those involved with the project retired peacefully with hefty packages. The only one remaining is Mr Felix Zimba, who was in charge of contracts administration. He is now the person that is Ndola Lime Company Secretary and chief advisor to the Receiver. You can imagine what kind of rescue plan can come out of such expertise!  The fact of the matter is that Ndola Lime did not need a new plant. The old one needed just a little rehabilitation. The motive of the project was to allow people an opportunity to have personal benefits from the ill-conceived and ill-implemented failed project

  1. INCOMPETENT MANAGEMENT   

Ndola Lime Management is inherently corrupt and ill-qualified. Over the years the lack of ethics has manifested in form of corrupt procurement of goods and services, especially in areas such as kiln repairs using; maintenance contracts; unnecessary projects and inflated prices (overhaul of canteens, construction of offices everywhere) and managers procuring Ndola Lime products such as block-mix and concrete blocks at discounted prices and later reselling for profit. The lack of strategic thinking manifested in management blunders in areas such as bloating of the labour force, introduction of expensive pension scheme and excessive expenditure on CSR activities and sponsorship of a football team beyond the capacity of the company. The mother of all blunders was the decision to retrench competent, thus making it impossible for the company to operate and maintain the equipment. Finally, management failed to adapt to the changing marketing environment where competition was getting entrenched. The company continued wanting to sell products at uncompetitive prices and terms

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Conclusion

Ndola Lime is a viable company that has existed for close to a century and has enough reserves to last another century. The problems being encountered by the troubled company are either due to incompetence or corruption or a combination of the two vices. It is quite clear that the approach of ZCCM and IDC is too simplistic and will have long-term consequences on the livelihoods of over 250 families and would have a negative impact on the economies of Ndola and Masaiti Districts. Ndola Lime has fallen victim to the macabre machinations of some rogues in ZCCM and Management, both present and past.

 

We live in a country that has laws and leaders. The law cannot remain silent when it is evident that crimes were committed and are still being committed. The Ndola Lime story is a tale of economic sabotage with impunity. It is time for Government and its leadership to take a stand on Ndola Lime and provide wisdom and direction. The company is viable. Its existence is good for the people, both present and future. It is the primary duty of Government to protect the people, their lives and their livelihoods. The current silence and indifference as economic genocide in be perpetrated on Ndola Lime is a source of deep concern. What wrong have the employees of Ndola Lime done to deserve such neglect from their government?

 

We call upon Government to take interest in Ndola Lime and help find a solution before the vultures finish extracting the little fresh left on a weak, but salvageable body. As a matter of urgency, can government halt the destructive work underway by saboteurs within ZCCM, protected by a vague court order; can government institute a forensic and technical  audit of Ndola Lime to find out what has gone wrong, particularly how the $100 million was looted; can an independent and competent Board of Directors be appointed to replace the current rot; can a new competent CEO and Management be appointed to draft a business recovery plan and implement it; can resources be found to dewater the mine which was deliberately flooded; can the plant that was deliberately set on fire to warrant impairment be reviewed for possible repair; can the bogus reevaluation of assets by Sherwood Greene showing the company is worth $15 million be rejected; can the sale of the company to Jinchuan be halted.

 

The PF Government has a rare opportunity to act to show that they represent the people’s interest. Ndola Lime shall be the test of whether the people matter to this Government.

 

Thank You

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COMMENTS

WORDPRESS: 5
  • comment-avatar
    Wesley 7 days ago

    Neymor…just watch this space….next time some government official will make a statement that HH has incited workers at Ndola lime to be unproductive leading to impending closure and selling of the firm!

  • comment-avatar

    And the PF hired guns like mwakalombe will accuse HH of having mismanaged Ndola Lime and has sold it to the chinese…

  • comment-avatar
    Neymor 1 week ago

    Silence and lack of interest from pf government simply means there’s more to it than meets an eye. Simply put, top government officials are involved period!
    Next, these guyz will sell our wives to China

  • comment-avatar
    Thomas Banda 1 week ago

    Well written article by someone who knows the company very well. All that has been revealed in the article is true and its time that government stepped in an a forensic audit carried. There is no way you can spend $100m on a new plant which did not work and pretend all is well.

    Alot more will be revealed after the forensic audit. I believe competent audit firms like KPMG, Grant Thornton and PWC including AG Auditors have been doing external and audit reports are there which have not been acted upon. We challenge government to take this issue seriously and revive this viable company.

    Everything that has been written in the article is very true and needs urgent attention

  • comment-avatar
    Dr. Ngosa 1 week ago

    this has been coming, a well written article from someone who knows this mining firm! but he also fogot to mention that the company has enjoyed monopoly of customers until the introduction of the indian owned neelkanth lime that has given it alot of competition especially the congo market