Identifier
Created
Classification
Origin
07LUSAKA372
2007-03-29 08:16:00
UNCLASSIFIED
Embassy Lusaka
Cable title:
ZAMBIA MARCH 2007 ECONOMIC ROUNDUP
how-toVZCZCXRO8506 PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN DE RUEHLS #0372/01 0880816 ZNR UUUUU ZZH P 290816Z MAR 07 FM AMEMBASSY LUSAKA TO RUEHC/SECSTATE WASHDC PRIORITY 4179 RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
UNCLAS SECTION 01 OF 03 LUSAKA 000372
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EINV EAIR ZA
SUBJECT: ZAMBIA MARCH 2007 ECONOMIC ROUNDUP
SUMMARY
-- MALAYSIAN TRADE MISSION TO ZAMBIA
-- EQUINOX ACQUIRES EQUIPMENT FOR LUMWANA COPPER MINE
-- GEMSFIELDS SELLS EMERALDS FOR OVER USD 1.0 MILLION
-- NAMIBIA BUYER/SELLER TRADE MISSION
-- BIO-FUELS POLICY TO BE ENACTED SOON
-- REGIONAL AIRLINE LAUNCHED IN ZAMBIA
-- FIRST EVER CORPORATE BOND ISSUED IN ZAMBIA
UNCLAS SECTION 01 OF 03 LUSAKA 000372
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EINV EAIR ZA
SUBJECT: ZAMBIA MARCH 2007 ECONOMIC ROUNDUP
SUMMARY
-- MALAYSIAN TRADE MISSION TO ZAMBIA
-- EQUINOX ACQUIRES EQUIPMENT FOR LUMWANA COPPER MINE
-- GEMSFIELDS SELLS EMERALDS FOR OVER USD 1.0 MILLION
-- NAMIBIA BUYER/SELLER TRADE MISSION
-- BIO-FUELS POLICY TO BE ENACTED SOON
-- REGIONAL AIRLINE LAUNCHED IN ZAMBIA
-- FIRST EVER CORPORATE BOND ISSUED IN ZAMBIA
1) Malaysian trade mission to Zambia
A delegation from Malaysia visited Zambia in mid-March to identify
investment opportunities. Delegation leader Tan Sri Dato Soong,
chairman of the Malaysia South-South Association, told journalists
that Malaysia seeks to collaborate with Zambia in joint ventures
that include manufacturing of cold roll steel sections for furniture
and housing. The team would also like to cooperate in manufacturing
coke-fired cupola for cast iron industry, agricultural processing
machinery, and paint, as well as solar energy driven motor pumps.
Malaysia is exploring export opportunities for palm oil mill
machinery, steel components for furniture and housing, and
re-treaded tires for passenger cars and heavy trucks. The team was
also looking for joint ventures with government agencies and
cooperation needing services of information technology, importers,
retailers and distributors.
The Malaysian team visited Livingstone to meet the business
community and discuss investment possibilities, which may include
joint ventures in university and hotel construction. Other sectors
of interest to the delegation included banking, steel manufacturing,
agriculture equipment, and palm oil production.
Delegation leader Soong said Malaysia was interested in setting up a
Multi-facility Economic Zone in Lusaka with the support of the Japan
International Cooperation Agency (JICA) and the Triangle of Hope
Initiative. The Zambian government is currently working with JICA
and a Malaysian consultant to replicate the Malaysian experience.
The delegation signed an agreement to set up a mobile phone
manufacturing plant with a local company as well as an engineering
college. The delegation also signed a memorandum of understanding
with Zambia Telecommunication Company Limited (Zamtel) to improve
their service provisions.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
2) Equinox acquires equipment for Lumwana Copper Mine
Craig Williams, Equinox President and Chief Executive Officer,
announced in a press statement to the Times of Zambia on March 21,
2007 that Equinox Minerals Limited acquired a Semi Autogenous Grind
(SAG) mill worth USD 30 million for its Lumwana Copper Mine project
in Solwezi. The basic design of the SAG mill was an adaptation of a
similar mill currently in operation at Escondida mine in Chile. The
mill is designed to process 2,450 tones of copper ore per hour with
an annual rate of 20 million tons. The plant will also grind up to
200 tons of 100mm and 125mm mill steel balls. The machinery
manufactured by Gandara Censa in Spain is 38 feet in diameter and 20
feet in length, with installation power of 18 megawatts. The
equipment is currently being installed at Lumwana Copper Mine in
Solwezi.
Construction of Lumwana mine is on schedule for commissioning in the
second quarter of 2008. It is anticipated that, once operational,
Lumwana mine will produce an average of 169,000 tons of copper per
annum contained in concentrates for the first six years of its
expected 37 year mine lifespan.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
3) Gemfields Mine sells emeralds for over USD 1.0 million
Gemfields Company chief executive officer Richard James told
Rapaport News on March 9, 2007, that Gemfields Resources Plc and
AIM-listed junior mining company (AIM is the London Stock Exchange's
international market for smaller growing companies) had completed a
sale of USD 1.028 million worth of emeralds totaling 385,035 carats
from the company's Mbuva-Chibolele mines in the Ndola rural
district. The buyers were from Israel and India. This was the
company's second sale; the first, in November 2006, took in
approximately USD 770,000. James said that the second sale earned
a 57 per cent higher value as the stones were extracted from deeper
within the mine.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
4) Namibia buyer/seller trade mission
The USAID-funded Market Access Trade Enabling Project (MATEP)
project and Zambia Development Agency (ZDA) held a Zambia Trade
Exhibition at Safari Court Hotel in Windhoek, Namibia on March 23,
LUSAKA 00000372 002 OF 003
2007. About 30 companies took part in the buyer/seller trade
mission to Namibia. External trade between the two countries
includes Namibian exports of copper ore and concentrates,
electricity, cotton seed, timber, oil cake and sorghum. Zambian
products with potential in the Namibian market include honey,
coffee, sugar, mealie meal, flour, essential oils, cement, and
textile products.
The event was officially opened by Namibian President H. Pohamba and
Zambian President Mwanawasa. President Mwanawasa disclosed that a
joint committee on trade was already in place and was working to
establish a bilateral trade agreement between the two countries. He
used the occasion to woo Namibian investors to come to Zambia. The
coming months will give an indication of the effectiveness of this
trade mission.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
5) Bio-fuels Policy to be enacted soon
The GRZ finalized a national bio-fuels policy after wide
consultation with stakeholders. The policy was submitted to Cabinet
Office for approval and launch. The bio-fuel policy aims to
facilitate the production of ethanol in Zambia, and provides
guidelines on how stakeholders in the industry will operate.
Minister for Energy and Water Development Felix Mutati said in an
interview that the Bio-Fuels Act will also define standards in terms
of production, distribution and cost. It will also address issues
such as the mixing of bio-fuels with other fuels such as petrol and
diesel during production, and adding value to the by-products.
The enactment of the policy will enable companies such as Zambia
Sugar to commence the production of ethanol from sugar cane, which
is one of the major raw materials. Zambia Sugar Plc managing
director Paul de Robillard said the company has the capacity to
produce up to 13 million liters of ethanol at present sugar
production levels. This production represents 15 per cent of
Zambia's total petrol consumption. Zambia Sugar will also use the
waste after juice had been extracted from the cane to produce
electricity.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
6) Regional Airline launched in Zambia
Sefofane Air Charters was launched on March 23, 2007, following the
issuance of a license to start operations in Zambia by the
Department of Civil Aviation. Chief Executive Officer Mr. Neil
Lumsden said Sefafane would be primarily engaged in servicing the
tourism industry as well as flying corporate and government clients.
The company would like to explore new challenges and opportunities
in the Zambian aviation industry.
In Zambia, the airline will operate charter flights to South Luangwa
National Park, Kafue National Park, Livingstone, and Lusaka. Three
planes have been acquired that will service tourist sites.
Sefofane Air Charters was established in 1991 in Botswana and has
operations in Namibia, Malawi, South Africa and now Zambia. The
company has 43 aircraft and over 50 pilots, and owns a maintenance
business with approximately 10 full-time engineers. The Zambia
office will be headed by Mr. Nixon Chimuka as General Manager and
the Chief Pilot is Mr. Kipe Mudenda.
Source: www.zamnet.zm; www.postzambia.com
7) First-ever Corporate Bond issued in Zambia
The Development Bank of Zambia (DBZ) successfully issued a K150
billion (USD 36.6 million) corporate bond, called a domestic Medium
Term Note (MTN) program, with Standard Chartered Bank that is
expected to help accelerate development of the local corporate bond
market. The MTN program will provide capacity, flexibility to
increase funding of medium term loan portfolio, room for continued
pursuit of profitable growth and expansion of business. The
transaction represents the first time in the history of Zambian
capital market that a domestic Zambian kwacha program has been
established, and is the largest single issue to be offered to
institutional fixed income investors. This information was
contained in a joint statement issued by Standard Chartered Bank and
Development Bank of Zambia.
An initial tranche of five-year unsecured bonds due in February 2012
was issued by DBZ on February 28, 2007 for K68.620 billion (USD 16.7
million),with interest payments on this tranche to be made on a
floating basis. Although the bond will be redeemed in 2012,
investors will still get interest called coupon twice yearly before
the bond matures.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
LUSAKA 00000372 003 OF 003
PASSEN
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EINV EAIR ZA
SUBJECT: ZAMBIA MARCH 2007 ECONOMIC ROUNDUP
SUMMARY
-- MALAYSIAN TRADE MISSION TO ZAMBIA
-- EQUINOX ACQUIRES EQUIPMENT FOR LUMWANA COPPER MINE
-- GEMSFIELDS SELLS EMERALDS FOR OVER USD 1.0 MILLION
-- NAMIBIA BUYER/SELLER TRADE MISSION
-- BIO-FUELS POLICY TO BE ENACTED SOON
-- REGIONAL AIRLINE LAUNCHED IN ZAMBIA
-- FIRST EVER CORPORATE BOND ISSUED IN ZAMBIA
1) Malaysian trade mission to Zambia
A delegation from Malaysia visited Zambia in mid-March to identify
investment opportunities. Delegation leader Tan Sri Dato Soong,
chairman of the Malaysia South-South Association, told journalists
that Malaysia seeks to collaborate with Zambia in joint ventures
that include manufacturing of cold roll steel sections for furniture
and housing. The team would also like to cooperate in manufacturing
coke-fired cupola for cast iron industry, agricultural processing
machinery, and paint, as well as solar energy driven motor pumps.
Malaysia is exploring export opportunities for palm oil mill
machinery, steel components for furniture and housing, and
re-treaded tires for passenger cars and heavy trucks. The team was
also looking for joint ventures with government agencies and
cooperation needing services of information technology, importers,
retailers and distributors.
The Malaysian team visited Livingstone to meet the business
community and discuss investment possibilities, which may include
joint ventures in university and hotel construction. Other sectors
of interest to the delegation included banking, steel manufacturing,
agriculture equipment, and palm oil production.
Delegation leader Soong said Malaysia was interested in setting up a
Multi-facility Economic Zone in Lusaka with the support of the Japan
International Cooperation Agency (JICA) and the Triangle of Hope
Initiative. The Zambian government is currently working with JICA
and a Malaysian consultant to replicate the Malaysian experience.
The delegation signed an agreement to set up a mobile phone
manufacturing plant with a local company as well as an engineering
college. The delegation also signed a memorandum of understanding
with Zambia Telecommunication Company Limited (Zamtel) to improve
their service provisions.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
2) Equinox acquires equipment for Lumwana Copper Mine
Craig Williams, Equinox President and Chief Executive Officer,
announced in a press statement to the Times of Zambia on March 21,
2007 that Equinox Minerals Limited acquired a Semi Autogenous Grind
(SAG) mill worth USD 30 million for its Lumwana Copper Mine project
in Solwezi. The basic design of the SAG mill was an adaptation of a
similar mill currently in operation at Escondida mine in Chile. The
mill is designed to process 2,450 tones of copper ore per hour with
an annual rate of 20 million tons. The plant will also grind up to
200 tons of 100mm and 125mm mill steel balls. The machinery
manufactured by Gandara Censa in Spain is 38 feet in diameter and 20
feet in length, with installation power of 18 megawatts. The
equipment is currently being installed at Lumwana Copper Mine in
Solwezi.
Construction of Lumwana mine is on schedule for commissioning in the
second quarter of 2008. It is anticipated that, once operational,
Lumwana mine will produce an average of 169,000 tons of copper per
annum contained in concentrates for the first six years of its
expected 37 year mine lifespan.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
3) Gemfields Mine sells emeralds for over USD 1.0 million
Gemfields Company chief executive officer Richard James told
Rapaport News on March 9, 2007, that Gemfields Resources Plc and
AIM-listed junior mining company (AIM is the London Stock Exchange's
international market for smaller growing companies) had completed a
sale of USD 1.028 million worth of emeralds totaling 385,035 carats
from the company's Mbuva-Chibolele mines in the Ndola rural
district. The buyers were from Israel and India. This was the
company's second sale; the first, in November 2006, took in
approximately USD 770,000. James said that the second sale earned
a 57 per cent higher value as the stones were extracted from deeper
within the mine.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
4) Namibia buyer/seller trade mission
The USAID-funded Market Access Trade Enabling Project (MATEP)
project and Zambia Development Agency (ZDA) held a Zambia Trade
Exhibition at Safari Court Hotel in Windhoek, Namibia on March 23,
LUSAKA 00000372 002 OF 003
2007. About 30 companies took part in the buyer/seller trade
mission to Namibia. External trade between the two countries
includes Namibian exports of copper ore and concentrates,
electricity, cotton seed, timber, oil cake and sorghum. Zambian
products with potential in the Namibian market include honey,
coffee, sugar, mealie meal, flour, essential oils, cement, and
textile products.
The event was officially opened by Namibian President H. Pohamba and
Zambian President Mwanawasa. President Mwanawasa disclosed that a
joint committee on trade was already in place and was working to
establish a bilateral trade agreement between the two countries. He
used the occasion to woo Namibian investors to come to Zambia. The
coming months will give an indication of the effectiveness of this
trade mission.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
5) Bio-fuels Policy to be enacted soon
The GRZ finalized a national bio-fuels policy after wide
consultation with stakeholders. The policy was submitted to Cabinet
Office for approval and launch. The bio-fuel policy aims to
facilitate the production of ethanol in Zambia, and provides
guidelines on how stakeholders in the industry will operate.
Minister for Energy and Water Development Felix Mutati said in an
interview that the Bio-Fuels Act will also define standards in terms
of production, distribution and cost. It will also address issues
such as the mixing of bio-fuels with other fuels such as petrol and
diesel during production, and adding value to the by-products.
The enactment of the policy will enable companies such as Zambia
Sugar to commence the production of ethanol from sugar cane, which
is one of the major raw materials. Zambia Sugar Plc managing
director Paul de Robillard said the company has the capacity to
produce up to 13 million liters of ethanol at present sugar
production levels. This production represents 15 per cent of
Zambia's total petrol consumption. Zambia Sugar will also use the
waste after juice had been extracted from the cane to produce
electricity.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
6) Regional Airline launched in Zambia
Sefofane Air Charters was launched on March 23, 2007, following the
issuance of a license to start operations in Zambia by the
Department of Civil Aviation. Chief Executive Officer Mr. Neil
Lumsden said Sefafane would be primarily engaged in servicing the
tourism industry as well as flying corporate and government clients.
The company would like to explore new challenges and opportunities
in the Zambian aviation industry.
In Zambia, the airline will operate charter flights to South Luangwa
National Park, Kafue National Park, Livingstone, and Lusaka. Three
planes have been acquired that will service tourist sites.
Sefofane Air Charters was established in 1991 in Botswana and has
operations in Namibia, Malawi, South Africa and now Zambia. The
company has 43 aircraft and over 50 pilots, and owns a maintenance
business with approximately 10 full-time engineers. The Zambia
office will be headed by Mr. Nixon Chimuka as General Manager and
the Chief Pilot is Mr. Kipe Mudenda.
Source: www.zamnet.zm; www.postzambia.com
7) First-ever Corporate Bond issued in Zambia
The Development Bank of Zambia (DBZ) successfully issued a K150
billion (USD 36.6 million) corporate bond, called a domestic Medium
Term Note (MTN) program, with Standard Chartered Bank that is
expected to help accelerate development of the local corporate bond
market. The MTN program will provide capacity, flexibility to
increase funding of medium term loan portfolio, room for continued
pursuit of profitable growth and expansion of business. The
transaction represents the first time in the history of Zambian
capital market that a domestic Zambian kwacha program has been
established, and is the largest single issue to be offered to
institutional fixed income investors. This information was
contained in a joint statement issued by Standard Chartered Bank and
Development Bank of Zambia.
An initial tranche of five-year unsecured bonds due in February 2012
was issued by DBZ on February 28, 2007 for K68.620 billion (USD 16.7
million),with interest payments on this tranche to be made on a
floating basis. Although the bond will be redeemed in 2012,
investors will still get interest called coupon twice yearly before
the bond matures.
Source: www.zamnet.zm; www.postzambia.com; www.times.co.zm
LUSAKA 00000372 003 OF 003
PASSEN