Parliamentary report on Sell of RAMCOZ

A brief history of the privatization of mines in Zambia and RAMCOZ in particular.

72. Mr Lubinda (Kabwata) asked the Minster of Finance and National Planning:
(a) how much revenue was earned from the privatisation of RAMCOZ;
(b) who were the liquidators or RAMCOZ and how much were the liquidators/receivers paid for liquidating the company;
(c) how many employees lost jobs immediately after the privatisation of RAMCOZ;
(d) how much was paid out as terminal benefits and how long it took to pay the employees after liquidation; and
(e) how many jobs were created by the new owners of the company.

The Deputy Minister of Finance and National Planning (Mr Shakafuswa): Mr Speaker, before I answer the question raised by hon. Lubinda, I would like to give a brief background to the privatisation of the mines. As you are aware before the privatisation of the mines, ZCCM Limited operated ten mines, three smelters, two refineries, two cobalt plants and a tailing leach plant.

Over the years the performance of the mines declined considerably to the extent that the very existence of the mines was being threatened. This forced the Government to reconsider its position and adopt a pragmatic mineral policy that would allow for private sector participation. The mineral policy adopted focused on transferring control and operations of the mines from ZCCM to the private sector, mobilising resources, diversifying ownership and allowing Zambians participation.

Mr Speaker, Roan Antelope Copper Mines Limited (RAMCOZ) was initially sold to the Binani Group of Companies in 1997 for a consideration of US$35,000,000. Payment of the US$35,000,000 was made in full through their lawyers, Rothschild & Sons.

Following the privatisation, RAMCOZ took over both mining and non-core mining responsibilities. This led to the financial problems and forced the company to borrow from suppliers and financial institutions to sustain its operations. Subsequently, the company failed to meet its obligations and this situation culminated in Zambia National Commercial Bank placing the company under receivership in the year 2000.

Mr Speaker, I wish to inform the House that RAMCOZ is still under receivership and that the process of liquidating the company has not yet began. Mr Christopher Mulenga of Grant Thornton was appointed Receiver by ZANACO in 1997 and continued up to January 2006 when the management of the receivership was transferred to the Administrator-General.
Mr Christopher Mulenga of Grant Thornton has been paid a total of US$3,306,783 as receivership fees, from August 2002 to January 2006.

Sir, I wish to point out that as part of the privatisation agreement with Binani, it was agreed that no employee would be retrenched in the first two years of operations. Therefore, Binani took over 6,200 employees.

Mr Speaker, I wish to inform the House that the Government released US$35,000,000 in 2004 towards the payment of terminal benefits of former employees of RAMCOZ as a condition for disposing of the mine to new owners.
Sir, Luanshya Copper Mines, the new owners who took over the former RAMCOZ mines in 2004 currently employs 1,500 employees.
I thank you, Sir.

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