ZCCM Investments Holdings (ZCCM-IH) has prioritised investments in the mining sector particularly in other minerals such as gold and manganese. As mandated by Government to harness the gold potential in the country, ZCCM-IH strategy is to forge partnerships with any industry player within the gold value chain.
The partnership with Karma Mining Services and Rural Development is one such partnership were the joint venture (Consolidated Gold Company Zambia) is entirely focused on gold processing.
The following account provides clarity on various issues raised by stakeholders:
1. The partnership between ZCCM-IH and Karma Mining Services and Rural Development (Karma)
Karma came into Zambia in 2016 and registered the company in November 2018. Just like any foreign investor they came in the country in search of investment opportunities in the gold mining sector.
They first started with the Ministry of Commerce, Trade and Industry, and went through the Zambia Development Agency to apply for an investment licence. Their key interest was only in setting up gold processing lines in the gold value chain in which they possess vast experience and expertise from their country of origin – Sudan.
Karma first embarked on talking to existing local small scale gold mining licence holders in the country for partnerships in processing their gold ore, particularly in Eastern Province, before setting up the company in Zambia. With established potential partnerships with these local mining licence holders, they applied for a Mineral Processing Licence through the Ministry of Mines and Minerals Development to enable them set-up gold processing plants.
Instead of them doing it entirely on their own, and engage commercially with these local small scale licence holders, they were advised by the Ministries of Commerce, Trade and Industry and the Ministry of Mines to partner with ZCCM-IH, seeing that ZCCM-IH was now mandated to drive the gold national agenda, with gold being declared a strategic mineral. In fact, the granting of the Mineral Processing Licence to Karma was dependent on them partnering with ZCCM-IH. The two Ministries should actually be applauded for their pro-activeness in seeing that any investor coming to invest in the gold sector now, should partner with ZCCM-IH.We must also understand that the sole business of the JV between Karma and ZCCM-IH is ONLY in gold processing. Karma does not own any gold exploration or mining licences, and will not own any of these, except for Mineral Processing Licences.
2. Shareholding of 45% stake in Consolidated Gold Company of Zambia (CGCZ)
ZCCM-IH undertook its own due diligence on Karma who had already signed agreements with two existing local small scale gold mines to start processing gold. Seeing that Karma was bringing on board the machinery and vast technical expertise and know-how in GOLD PROCESSING, ZCCM-IH entered into a partnership with Karma to form the Joint Venture – Consolidated Gold Company Zambia Ltd – and negotiated for a 45% stake in the JV.
In addition to this, it is enshrined in the agreement with Karma that ZCCM-IH will be able to increase its stake in CGCZ or own it entirely after five years. This period will ensure knowledge and skills transfer in running the operations of gold processing and ensure the business is established successfully.
Further, not only does ZCCM-IH have this significant minority stake, ZCCM-IH has strategic management control in the company and is actively involved in the operations for direction. For instance, the Chief Financial Officer and procurement officer are appointed by ZCCM-IH, and additionally a technical person, a metallurgist is attached to the JV.
Holding a significant minority or majority stake in new investments with investors coming to partner with ZCCM-IH, with some level of control and participation in strategic management positions, is part of our new strategy aimed at ensuring ZCCM-IH gets value and ensures checks and balances in the running of these new entities.
3. The benefits of the partnership between Karma and ZCCM-IH in CGCZ
It is all about the empowerment of the local small scale gold miners. A lot of small scale licence holders have struggled to develop their mines due to lack of resources to conduct exploration to estimate the resources. Most of them have been mining alluvial gold which only involves sifting through gravel to separate the pieces of gold, and can be done by a single miner with a gold pan, by washing the ore in water.
However, the process of hard rock gold mining and processing requires professional technical expertise for gold to be extracted; it is found in rocks which are supposed to be extracted from beneath the ground, crashed and milled into very fine particles, then chemically processed using leaching processes to extract the gold. CGCZ is partnering with these existing small scale licence holders to set-up gold
processing lines for all the types of gold ore materials; they are also being helped with technical expertise to open up gold veins by providing access to earth moving machinery as well. All this will see a boost in their gold production for their benefit, and that of the country at large, as we develop this sector tobring about formalisation and regularisation. Again, knowledge and skills transfer in gold processing to these local licence holders will be another benefit. As such, any current licence holder is free to partner with any investor to mine and process the gold in their licence area.
There are currently small scale licence holders who are already doing so with other foreign partners other than CGCZ or Karma or ZCCM-IH.
The industry traditionally has remained unformalised and a lot of illegal mining has been taking place since time in memorial. And there are sections of society particularly foreigners that have been massively benefiting from this illegality.
There are no formal records of how much gold is siphoned and smuggled out of the country. There are over 60 spotted gold mining areas around the country, and the locals are currently mining. CGCZ is only present in Rufunsa and Mumbwa; and in Mwinilunga ZCCM Gold Company will entirely be responsible for mining and processing operations. CGCZ is not participating in the Kasenseli gold mine as alleged in social media commentary.
4. The CGCZ and Array Metals Joint Venture
The partnership between CGCZ with Array Metals is another JV where they (Array Metals) hold the exploration licence in Mumbwa, and have invested millions of dollars in conducting geological exploration to estimate the gold resources. Again, they could have started processing gold on their own with any investor, considering it is their licence. But they approached CGCZ for a JV in gold processing seeing what CGCZ is already doing with other small scale licence holders in Eastern Province. They saw it fit to have CGCZ come on board to invest in processing their ore materials and negotiated a revenue split of 65% for CGCZ and 35% as licence owners.
So any Zambian can still approach Array Metals to partner with them be it in mining or processing, seeing they have a large scale exploration licence in Mumbwa, and the JV with CGCZ is to process only a portion of the same over a period of time.
5. About ZCCM Gold Company
Early this year, ZCCM-IH formed ZCCM Gold Company to oversee and undertake investments in the gold sector’s value chain. ZCCM Gold is owned 51% by ZCCM-IH and 49% by the Ministry of Finance, and was formed after CGCZ was established and already operational. ZCCM Gold will invest in the entire value chain starting from gold exploration, mining, processing, refining, trading and beneficiation. It will hold its own licences in mining in other gold occurrence areas.
The first project is the Kasenseli gold mine which will be a large scale mining and processing operation. ZCCM Gold is in charge of all the operations of the project. ASpecial Purpose Vehicle is being formed which is comprised of ZCCM Gold as majority shareholder, alongside the previous licence holders who are Zambians and the Chiefdom Trust as equity partners. CGCZ or Karma are not party to the Kasenseli project.
6. The role of ZCCM Gold Company
The mandate given to ZCCM-IH to harness the gold sector is being implemented by ZCCM Gold. ZCCM Gold started buying gold mined by artisanal gold miners in February this year, by providing an open market and competitive pricing as the first step towards formalising the industry.
Gold mining activities have been taking place for years albeit illegally. And now there is a pro-active attempt to formalise the small scale and artisanal gold mining sector. So far, Government has given artisanal miners gold panning certificates to legalise their alluvial or riverbed gold mining activities.
ZCCM Gold is working with these licenced artisanal gold miners by providing them with gold equipment, access to earth moving machinery, and offering technical expertise among others. Again, this is another avenue in which citizen participation in the gold sector is being encouraged and promoted.
As ZCCM Gold build up gold stocks, and get a fair understanding of gold production in the country, ZCCM Gold will set-up a gold refinery in future so that we also start producing gold bullions, and also have a beneficiation line to make jewellery among others.
So, there are vast business opportunities in the gold value chain, and any Zambian can participate. In addition, ZCCM Gold will partner with any local licence holder to conduct exploration and mining were potential viability is established.
7. Technical expertise in gold processing
Indeed, alluvial gold can easily be obtained on the surface. But as the resource gets deeper it would require huge capital outlay to mine. At Kansanshi Mine for example, gold is a by-product of a huge mining operation, and only produce an annual average of 5 tonnes of gold.
ZCCM-IH is open to any local Zambians with this technical expertise in gold processing, to forge partnerships in developing the sector, or they can also apply and obtain licences or partner with existing small scale licence holders to develop the gold mines.
As a country, we are still at a very early stage in formalising and establishing the industry, and this will require hard work and investment over time to attain high production levels. We will obviously need any technical expertise throughout the gold value chain considering the vastness of gold occurrence areas in the country.
ZCCM-IH remains committed to ensure that the benefits that will arise from the formalisation of the gold sector will empower the licence holders, the local communities and derive value for its shareholders. The door remains open for anyone to approach ZCCM-IH for partnerships in the gold value chain.
Karma (car-ma) is a word meaning the result of a person’s actions as well as the actions themselves. It is a term about the cycle of cause and effect. According to the theory of Karma, what happens to a person, happens because they caused it with their actions.
Mwebena Zambia what do the Sudanese know about Gold? Karma will catch up with you in future for this decisions you making now.
Sudan is the third largest producer of Gold in africa……. they do know something about Gold.
If you don’t have the technical know-how of mining gold engage consultants or expatriates, you don’t have to give away ownership of the Company. Once the expats transfer the knowledge to locals you terminate the contract.
Aristotle, nga wachifika po fye ati “Karma” is a bitch …
Aristotle, nga wachifika po fye ati “Karma” is a b***h …
This scenario reminds me of the 1990s Kitwe, I was young but I remember seeing Ba kajamu (Zambians) selling stones( emerald) to Senegalese, where are Ba kajamu now? Why do we always want to do the donkey work for foreigners?
There’s something I wish I could tell ZCCM-IH but I doubt it they will appreciate it. They hv got it wrong either deliberately or out of ignorance of something they ought to know.
ZCCM IH is using street reasoning here! Who bewitched Zambians to be giving foreign companies more than 51% shareholding in every partnership? Is this a sign of being very bad negotiators? No wonder this country is forever poor! Your friends in Botswana retain a majority shareholding in every partnership with a foreign player, minimum 51% which is later offloaded to each citizen and not the privileged few! The other troubling thing about this bad deal is the lack of transparency around it. Why didn’t they advertise? Is this not Single sourcing which always leaves an aftertaste of Corruption like we see with Speed Cameras?
Thieves will defend fellow thieves. It’s the reason why PF government will be kicked out of power.
Arrogance, they don’t want to accept that they have made a mistake.
Zambians are saying no ti that partnership please stop it.
This country has been bedeviled by huge debts. But God in his wisdom gave us some gold. This is an opportunity for us to get rid of this debt. Then Sudanese rebels come here and take 51% of your gold. And you are there defending this poor deal. That’s why we smell corruption everywhere. Was there any tendering in the process? This is quite irritating. Why can’t we negotiate a better deal?Everyone is stealing from us, Chinese, Indians and now Sudanese. That country which is nothing but a desert, with war-lords all over killing civillians. May God save this country. Am reminded of the parable of talents told by Jesus. The foolish man hid the talent and did nothing with it just like ZCCM-IH is doing.
For years we have seen a number of graduates from Zambian Universities in related field of mining, let those graduates go and practice what they have been learning. What is your fear?
Very well said ZCCM-IH. GRZ through MOF need to set up a strong gold tax framework so that we can benefit more from Kansanshi.
Don’t defend the indefensible. What Zambians expect from you is to take the lead and not be some kind of spectator or passive player. Zambians want you to own these mines at 100%, if you don’t have money come to the through LuSE and they’ll show you that they mean business. Further, can you stop this culture of rebutting every comment that citizens make, you’re not in any contest. We expect you to take seriously people’s comments and not to posture as if you know it all. This is the attitude that continues to cause us embarrassments everyday. We know what we want, so don’t play with us. Soon we’ll begin to make people accountable for their fooolish decisions. We told LPM the same when he sold Konkola but he didn’t want to listen but now have you seen the result? It’s better for…
It’s better for you to keep quiet if you’re not sure about the subject. Some of us know better than you chaps. It’s annoying to see good for nothing idlers arguing from an ignorant point of view
Strategic mineral but controlled by foreigners from a failing state such as Sudan. Wht logic is that? I suspect that there is a secret deal here.
One kajamu I knew had a very sad ending. He was facing a disciplinary case with his employer and thought of hiring a lawyer from Lusaka. So he drove to Lusaka one night during a weekend in his brand new Peugeot 504.
As he turned into the newly done Katimamulilo Road to drive through Garden compound and head for Chainama Hotel where he would stay while in Lusaka, he crashed into a stationary truck that was near the rail line crossing. He died on the spot and police retrieved some K50,000 (1992 value) among other items …
Is Zambia so stupid as to discover gold and partner with Sudan to share it with them? Are we that stupid we can’t mine it ourselves?
Partnerships in undertakings of robust nature are important to create vital synergies, more importantly for (a) sharing of skills and (b) raising the required equity capital. It’s axiomatic that the The cobtention about this deal is that Sudanese are rookies in the business while ZCCM could have easily raised the USD 2.5m from it’s robust balanced sheet. Thus, neither (a) nor ( b) applies. So what’s the deal all about then? Is it simply because we believe that “ukwenda babili temwenso” ?
We will never learn at all at all.
From the scribbling above, I have only picked one biggest point.
*that our leaders are saying all those mining graduates and Engineering staff (Metallurgists, Geologists, Surveyors and Refiners of Zambian nature) at our mines are useless to Zambia’s Mining agenda to the core. Chaps spent years at the University studying crap.
Damn it! When trump calls you names you complain.
Damn it! Lubinda Habazoka, you need not be quiet on this.
When will you Zambians begin to believe in yourselves. You don’t Know Gold fellaz? 45%tage shares? Are you alright? Gold! G.O.L.D? Investor? I can’t believe this. No wonder h² saw an opportunity and amassed wealth. I am sure he is salivating already.
Government must cancel the stupid deal and fire who ever signed on this deal.
Zambia has resources and skills. We don’t people from Sudan who have no experience in mineral to be the main beneficial of our mineral resources.
Zaka nama years at the University but coming out blank. Engineers, what you problem. Or is that politicians short circuit you.
Pilizi 45% is nothing. You don’t even own it. Give it back to small scale miners before those infestors leave holes behind.
Next we will hear that the Western countries have bought the Sudanese gold firm or that they actually own it.
Zaka nama years wallowing in loadshedding.
These are matters you need to consult Zambians you wolf like politicians. Next we will hear you have shares in the Gold mines, klepto h² minded kleptos.
Damn you ZCCM IH.
These guys will be hunted for daylight robbery. Wait and see as time is an equalizer.
Even Chilufya Tayali is being converted by reasoned arguments from bloggers. Let’s see if it will result in another press release from ZCCM-IH.
Let me get this right – so was Karma the only gold processor willing to get into a JV? Did you put this out to tender to get the best deal? Also, the rationale is that Karma was brought on board to provide the professional technical expertise and knowledge of gold value chain which I presume was unavailable locally. How then is it that with Kasenseli which you have deemed to be ” a large scale mining and processing operation” you intend to have 100% Zambian ownership and operation? Where will the required technical and gold VC expertise suddenly come from?
This one no I will not support. We gave our emeralds to the Senegalese and now we are giving our gold to the sudans (or what ever they call themselves) .
Zambians ask yoselves, who’s beheld the Karma deal ad who hs brought them here? If u dig deeper, some of these leaders are behind them.
Its not of Sudan being third in the world, thts y we shud bring them on board of our gold, no!! We being foolish, who hs invited us on bases of being a top copper producer, none. So y shud we be always foolish to invite foreigners in our resources.
It’s those in leadership who are behind all these scandals we a going through, hiding in foreigners to run there investments, Zambians wake up ad fight this foreign invasion of our resources.
Just so that we are clear, the 5 tonnes of Gold that Kansanshi declares every year is worth over USD 280 million at $56/gram. That’s the gold that is legally declared. We know that most of it is exported as part of the tailings, or semi-processed ore and the government loses millions of dollars.
The problem with us Zambians is that when someone comes to explore for natural resources you just simply watch and laugh at them drilling about with expensive machines without learning anything …the rich Zambians only want to invest in buses, trucks, flats and Milling plants. The moment they strike Gold you start asking these questions….there are foreign companies around the country undertaking exploration at great expense; do you expect them to give to you when they hit gold? Go to your MPs and ask them to change the law on mining like in RSA or Botswana.
Here’s a bunch of educated illiterates drowning in debt while giving away what should rescue is. It’s interesting that the government talks about sophisticated equipment. What sophisticated equipment? Ignorance might be bliss but in this case, we are being robbed blind. We need this government out and the people involved investigated thoroughly. Zambia has become a Wild West with rule of law. Why make the deal in secrecy and tell the nation? On whose behalf?
What’s annoying is that he’s put emphasis on a lack of expertise as the main reason for such a decision. Zambia has been mining since 1920 what do we want to learn about mining? Can’t he consider employing? Can such people be expected to take the country anywhere? You build a school then you make teachers your partners and not employees? Bwafya
Lungu must be a major share holder in this Karma company, no dought about it….
Should have been all indeginous Zambians doing all of this….
What is disturbing about Gold & Karma is that by not advertising to all interested African Gold Mining firms, PF whom Zambians don’t trust, hv created a perception that they are hiding something very big and that is the fact that top PF leaders are using Karma as a front & yet it’s the same PF officials who own Karma hiding direct control.
Zambians who cursed and bewitched us? All these years of mining and training people in mining you can not mine gold? Mmmm how selfish we are. We know already you guys have shares in this gold company. Remember you will not live for ever you will die and the riches you are amassing to yourselves will remain. Please think of Zambia and its posterity.
But if Gold is designated a strategic mineral why oh why, allow a foreign owned company take a larger percent of the gold? ZCCM-IH, is a corrupt joke. All the contracts they take with so called investors is in a minority share.
We can’t let this go on Zambians. We want a new bill specifically to prevent minority share in our own resources. We the people cannot continue giving away our wealth and especially that of our children. Successive govts through this corrupt organisation have robbed us of a good standard of living by privatising our common wealth so that they service shareholders and foreigners; externalising our wealth. Susan is a war torn zone. Our resources are being given to obscure groups who may very well be fronts for Terrorists.
Can you see how the negotiations go like between ZCCM and their ‘investor’ friends……?
All sitting around the conference table wearing bowties (you know the ones that twist around battery operated). “Have another whiskey, investor?” “Try the Glenfiddich single malt whiskey.” “Oh no, no, no, I really couldn’t have another…..they reply(with bulging eyes) staring at the Black/Blue/’Red’ label Johnnie Walker whiskey. Once totally smashed, out of their heads, ZCCM sign the contract with minority shares…….and then pass out. Next day they have to be reminded what they actually signed….”what, what, never mind Zambians are mugs anyway.”.
This is what I have googled on Karma, can ZCCM IH Gold please confirm if this is the same company in Burkina Faso, or an imitation? And why an imitation? And if not, why didnt ZCCM Gold just tell us so openly about their “partner”? In Burkina Faso, Karma is owned 100% by a company called Endeavour which seems not to have any Sudanese links:
“The Karma Gold Mine is an open-pit mine located 20km east of Ouahigouya and approximately 185km north-west of Ouagadougou, the capital of Burkina Faso. Owned solely by Endeavour Mining (previously known as TrueGold Mining), the gold mine hosts three exploitation (mining) permits namely Karma, Kao and Nami.
TrueGold received all the required exploitation permits for the project by September 2014, the project’s feasibility report was completed in…
……TrueGold received all the required exploitation permits for the project by September 2014, the project’s feasibility report was completed in December 2014 and was further revised in 2014. Construction was started in May 2014 and first gold was poured in April 2016. TrueGold was acquired by Endeavour Mining in the same month of 2016.”
Is this a coincidence of names
And were are all those PF jerabos that used to say HH sold the mines? Who is the real sell-out now?
I am a PF string member and foot soldier. I will still vote for PF because if the party goes down so do I. But it has to be clear we have been making seriously wrong decisions and these decisions are changing the way more and more people view us. Why do we believe in all things foreign? Are we not seeing the cold War between the US and China and Russia? The cold War and most likely to turn into a hot war is as a result of these nations competing and wanting the best for their people. Go to these country how much is owned by foreigners compared to what is owned by their people. As long as the real economy is owned by foreigners we have to forget about real national autonomy and development.
Why is that Kavidere cannot be allowed to proceed with his railway line, why is it that the oil…
pipeline from Angola by the Baseli Baliseli cannot be allowed? These are Zambian companies owned by Zambians. Who cursed this nation?
The truth about Karma Limited which you are all missing by focussing on Sudan. Ukulanda landa bupuba bupuba ukwabula critical analysis is dangerous. This is the truth about what the company called KARMA LIMITED is :
1. KARMA LIMITED is not owned by the Sudanese in any way. It is a British company with British directors and they own a company called Coach House Digital Ltd.(founded in 2009). kARMA was established in 2015.
2. As usual , we make stupid decisons to maximise benefit from resoyces that we just pick and sell with spending a ngwee processing. What is the motive of ZCCM-IH asking a small company with inexperience in mining to partner with ukulatola gold kuk Kasenseli? What logic is there that with all he expertise there is at ZCCM, We go look for a group of UK traders to…