Standard Bank, one of South Africa’s leading lenders provided USD 500 million to Konkola Copper Mines, Zambia’s leading miner by output to refinance shareholder loans from its parent company, Vedanta Resources Plc.
According to the Bank, operating as Stanbic in Zambia, the USD 500 million will be used as bridge financing facility to Konkola Copper Mines plc to refinance shareholder loans from parent Vedanta Resources plc.
In a statement Friday, the bank is also mandated to arrange and underwrite a USD 700 million loan to fund investment that will turn the Zambian copper miner into one of the world’s leading copper producers and help accelerate Zambia’s economic growth program.
Mr Brad Breetzke Bank’s head of mining, energy and infrastructure finance said that the funding to KCM was the bank’s largest injunction into the Zambian copper production.
According to the lender, the investment made by Standard Bank is an illustration of our commitment to KCM and the broader copper region in Zambia. Standard Bank has full confidence in KCM management’s ability to drive the company’s growth towards becoming one of the world’s leading copper producers.
The lender is proud to partner with KCM with its parent company Vedanta’s financial partner in this process. According to the bank’s projection, it is anticipated that the funding, once provided Investments in infrastructure will see KCM produce in excess of 400 000 tonnes of copper per year.
Additionally, the production target will rank KCM as the largest copper producer in Zambia and place it among the top 10 globally. This transaction reflects our confidence in the future of the mining industry in Zambia as well as Zambia’s future growth prospects.
According to data, during the past 5 years Zambia’s real Gross Domestic Product expanded by an average of 6% per annum. During the Global downturn in 2009, Zambia’s economy grew by 6.3% and it is the lender’s view that the growth trend will continue over the next 5 years.
The bank noted that copper mining in Zambia plated an integral role in economic growth, although more than 75% of the labor force was in agriculture. Zambia’s Africa’s largest copper producer and fourth world largest producer of the metal.
However, despite Zambia’s much labor force being in the agricultural sector it was copper mining that drives growth. In 2009, 83% of exports were accounted for by copper and cobalt, equating to almost 30% of total GDP, an increase from 77% in 2006.
Standard Bank, a leading international natural resources bank has been providing funding and investment support in the Copperbelt for the past decade. These include acting as lead arranger for funding the development of the Kansanshi Copper Mine in 2003 as wellas for the Lumwana copper mine in 2007.
It is also providing funding to ARM for the development of the Konkola North Copper Project as Stanbic Bank Zambia its in country operation continues to provide the full spectrum of banking products to companies in Zambia. Standard Bank global head of mining & metals Rajat Kohli added that the landmark financing event further demonstrates the bank’s commitment to natural resources and to Africa.
With an outstanding track record of success, we are positioned to continue acting as the financial Ainstitution of choice to the sector on the continent.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
