2 August 2011

Zambia: Maamba Collieries Limited to Foster Economic Growth in Sinazongwe

SINAZONGWE District was at one time an economic hub owing to the mining activities at Maamba Collieries Limited (MCL), which created thousands of jobs thereby improving the livelihood of the locals.

This is not so any more because for more than 12 years now, people in the district have been faced with great economic challenges following the limping operations of the MCL since 1997.

But such will no longer be the case owing to the pragmatic policies of the MMD Government under the leadership of President Rupiah Banda.

The Government through the Private Public Partnership (PPP) initiative has partnered with an investor who is poised to revive the mining industry not only for the benefit of the locals but the nation as a whole.

Nava Bharat of Singapore (NBS) limited is a new mining company that is yet to begin the mining of coal.

The company intends to set up a thermo power plant at a cost of U$650 million to enable it produce 600 megawatts of power for not only the people of Maamba, but also Zambia's neighbouring countries.

The new mine which was re-launched by President Banda last Friday is set to resume production in September this year and would create 2000 jobs at its full operation.

When re-launching the mine, President Banda reiterated Government's commitment to making Zambia the preferred destination for capital investments in the mining industry.

Mr Banda has no doubt shamed prophets of doom that doubted the Government's resolve to seeking a sound equity partner for the MCL.

He said, "Today making a cell-phone call is relatively cheap owing to the competition that Zamtel is posing following its partial privatisation, which project again was heavily criticized by the same prophets of doom.

"We are re-opening Maamba mine in an effort to improve the livelihood of people of Sinazongwe."

He notes that the Government would continue to implement policies, measures and programmes aimed at improving Zambia's economic climate and the people's livelihood expressing concerns about the high level of unemployment and poverty, as well as poor business opportunities in Sinazongwe.

"This mine is in part an answer to these concerns as the mine will initially create 200 jobs but this is expected to grow to over 2,000 once works on the construction of the power plant starts" explained Mr Banda.

He was confident that Nava Bharat and the Zambia Consolidated Copper Mines (ZCCM)-Investment Holdings would invest in Maamba Mine and that the company should extend its operations to ensure the long- term operations.

"The coal potential here in the valley remains largely unexplored and I urge Nava Bharat to consider extending its coal reserves.

With the changes that have taken place in the smelting technology in mining, the demand for coal has drastically reduced. This, therefore, means that the investment in this mine is largely motivated by the need to produce coal for power generation," he explains.

President Banda notes that it is common knowledge that there is a significant shortage of power in Zambia and the region driven largely by the growing industrial ventures.

The development of the 300-megawatt power plant at Maamba together with the development of the Kafue lower power generation plant at Itezhi-Tezhi and other mini-hydro electricity projects across Zambia was proving part of the solution to the power deficit.

President Banda stressed that he cannot wait for too long to witness the commissioning of what would become Zambia's first large and modern thermal power plant to be located at Maamba Mine.

"With the re-opening of the mine and setting up of the power plant, the people of Sinazongwe and the valley in general will see an improvement in their livelihoods," he said.

He urges the new management at the firm to support agriculture in the valley by promoting the growing and procurement of locally produced foodstuffs, stressing that such a move would assist in alleviating poverty in the area.

"With investments such as this, my Government is confident that we will continue creating avenues through which we will create wealth for a better Zambia, establishing security, stability and prosperity for all Zambians," he said.

The President said that during the short period he has been in office, he has opened mines in North-Western, Copperbelt and Southern provinces, an indication of an increase in investment.

"We are now able to support other sectors such as agriculture, tourism, health, education, roads and other infrastructure.

Government recognises that to sustain the development we have achieved, we need to have all weather roads to get our agricultural produce to the markets; we need a health population and we need to send our children to school," he said.

At the same launch, Mines Minister Maxwell Mwale noted that Nava Bharat is a renowned investor who has come to stay in Zambia and would not vanish over night.

MCL chairperson Ashok Devineni in handing over of the mine said his company set out four objectives that is to pay off liabilities left by the former management; restart mining; set up a power plant and to continue supporting the Maamba community.

"To date we have paid off all former workers and addressed retirement packages and we implemented the voluntary separation scheme as per the laws of Zambia.

We shall develop Maamba town and infrastructure and address the issue of pollution which remained ignored for a long time," Mr Devineni said.

He noted that his company would invest about $750 million in the new thermal power plant to support mining activities while the surplus power to be generated would be supplied to Zesco.

He said the mine would resume operations in September after a new processing plant has been set up.

The company has already finalized the detailed lay out for the power plant initially for the 300 megawatts in the first phase and later an additional 300mw totaling to 600mw.

The company expects an investment outlay for phase 1, on coal mine and the power plant to be about $750 million out of which $650 million would go towards the thermo power plant and the remaining $100 million towards the coal mining.

In the second phase, the company again expects to produce another 300 mw which it expects to sell to the locals as well as the power utility of the country Zesco and other countries.

To allay concerns of environmental pollution by people in the area, the company would employ the latest modern Coal Handling and Processing Plant (CHPP) to overcome pollution.

The company has already started allocating contracts to Zambian companies which would in turn hire the services of the locals .

Through its social corporate responsibility, the company has adopted Maamba private basic school and is about to construct a science and computer laboratory.

Rehabilitation of the Presidential lodge called Izuma, as well as the erection of an office for official meetings at Chief Sinazongwe's palace is already under way.

NBS joined as a strategy equity and technical partner by acquiring 65 per cent equity in MLC from ZCCM-IH in 2010 and through the infusion of $36 million, the company sorted out the outstanding retirement benefits and salary arrears of past and present MLC employees.

Chief Sinazongwe is extremely happy that the mining company had finally taken over Maamba Mine stressing that the equity partners would help foster development in Sinazongwe district.

The traditional leader thanked Government for seeking an able equity partner for Maamba Mine.

That the mine would resume operations in September is a sigh of relief, not only to people of Sinazongwe District but the entire country.

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