BEST IN CLASS
TBY talks to Steven Din, CEO of Konkola Copper Mines Plc. (KCM), on continuing with operations during tough times, the need to revamp energy tariffs, and reducing its environmental footprint.
BIOGRAPHY
Steven Din has been the CEO of KCM since May 2014. He has more than 20 years’ experience in the natural resources industry, which includes copper, iron ore, titanium oxide, and oil & gas. Prior to his arrival in Zambia, Din was with the Essar Group as CEO-Minerals, based in Harare. He has headed up operations in various capacities at Rio Tinto, including managing director of the Simandou operations in Guinea and as CFO for the global iron and titanium business for the Palabora Mining Company, South Africa. Before Rio Tinto, Din was with Schlumberger Oilfield Services. He holds a bachelor’s degree in chemical engineering and is a chartered management accountant, both from the UK.What strategy is being employed to cushion KCM from copper price volatility?
In 2016, we witnessed the lowest average copper price in 11 years. Although there has been a small uptick in prices, they will probably remain low for another 12-18 months before we see a significant increase. In a low price environment, there are three areas that a producer like us can focus on. The first of these is operational efficiency. For example, if a plant needs to run for 95% of the time for efficiency, then this should be maintained. Likewise, chemicals that are used for processing need to be recovered at dosages that are as close as possible to optimum levels. In addition, there are a whole load of mechanical maintenance and copper recovery type efficiencies that can be optimized. Secondly, when prices are low, the producer needs to negotiate better prices for consumables and raw materials. We have liaised with our suppliers to see what we can do in terms of reducing our overall cost of production by looking at pricing and quality. The third area of focus, and one that has set us apart from other mining companies in Zambia, is volumes. In October 2015, when the power crisis hit Zambia hard and ZESCO declared “force majeure," rather than scale down our operations as other miners did, we pushed for higher, profitable volumes in order to reduce our overall cost of production. For us, it was the right strategy and the right way to address a difficult period in our operating history.
What measures need to be implemented by the public sector in terms of energy tariffs and mining regulation?
The government needs to tackle several issues, and indeed, is already doing so. Regulations surrounding power factors—an indicator of how efficiently power is being used—need to be enforced to ensure that large users of power can maintain high levels of efficiency. We are the largest consumer of power in the country, so our ability to source reliable power at affordable rates greatly impacts our performance and our sustainability. The Minister of Energy is eager to move toward a more cost-reflective tariff that takes into consideration the chain of sourcing energy—from generation all the way to transmission. It will be important to accommodate bulk buying rates and retail rates if Zambia is to continue to attract foreign investors into the sector.
What is your outlook for Zambia's mining industry and for KCM in the medium term?
On the whole, the outlook is positive. Anil Agarwal, the Group Chairman of Vedanta Resources, recently met with His Excellency President Edgar Lungu and made a number of investment commitments. One of these is to move production levels to 400,000 tons of copper each year, which would quadruple production over the next three to seven years. This extra capacity will come from a number of sources, including the Konkola deep underground mine. We are currently working with consulting engineers and mining experts to review the technologies we employ and to boost productivity. Most importantly, we want to mine deeper. So far our deepest level is at 950m and our target is a next development at 1,100m. This will be a game changer for KCM. We are already the largest integrated copper producer in Zambia and the second-largest in Africa. Our smelter, one of four in the country, can produce 310,000 tons of copper every year.
How does KCM demonstrate its commitment to reducing its environmental impact?
KCM is working towards addressing all remaining legacy issues in respect of environmental matters. We are determined to be best in class as far as the environment is concerned and we have invested a substantial amount in reducing our environmental footprint and being a net-positive contributor to biodiversity. We have reduced the amount of water we consume across all our operations by 50% in the last three years, further enhancing our ability to attain zero discharge.
BEST IN CLASS
TABLE OF CONTENTS
Year In Review
What A Year
Zambia has long been a bastion of stability in Southern Africa, and while its economy has been rocked in recent years by the falling value of copper prices, a devaluating kwacha, and high inflation, through the Economic Recovery Program the government has bold ambitions to right the ship.
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Convoke, Confound & Collect
Squeezed between a rock and a rather hard place by the slowdown in Chinese demand for copper, by far Zambia's biggest export and government-revenue generator, President Lungu has been forced to get creative in his country's alliances to broaden revenue streams and lessen its dependence on the vagaries of one foreign market.
read articleGuest Speaker
Dr. Stergomena L. Tax, Executive Secretary, Southern African Development Community (SADC)
TBY talks to Dr. Stergomena L. Tax, Executive Secretary of the Southern African Development Community (SADC), on regional economic development, boosting pan-continental free trade agreements, and improving security through mutual development.
read articleInterview
Susan Sikaneta, Ambassador, Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa
TBY talks to Susan Sikaneta, Ambassador of Zambia to Ethiopia & Permanent Representative to the African Union and Economic Commission for Africa, on championing peace across the continent, advancing women's rights, and promoting Pan-Africanism.
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Sebastian C. Kopulande, CEO, Zambian International Trade & Investment Centre (ZITIC)
TBY talks to Sebastian C. Kopulande, CEO of Zambian International Trade & Investment Centre (ZITIC), on taming austerity, stimulating sustainable growth, and creating the framework to support entrepreneurship
read articleFocus: Zambia Plus
Adding it All Up
On October 20, 2016, at the 2017 Budget Address, Finance Minister Felix Mutati launched the government's economic recovery program, christened "Zambia Plus." The program is designed to spur domestic productivity, through strengthening ties and collaborating with external donors and developers.
read articleReview: Banking
Macroeconomics Rule the Roost
In its ongoing efforts to diversify away from one principal commodity, copper, the government fosters the development, standardization, and efficacy of the private sector. In doing so the systematic support of the financial universe, especially banks, is vital, as is the goal of financial inclusion.
read articleFocus: SME Growth
IMF support program
An IMF support program stands to provide Zambia with some much-needed discipline on its expenditure and operational efficiencies; however, many caution the need for Zambia to determine what it wants to achieve and how the program will benefit the country.
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Christabel M. Banda, Executive Director, Insurers Association of Zambia (IAZ)
TBY talks to Christabel M. Banda, Executive Director of Insurers Association of Zambia (IAZ), on the evolution of the local insurance landscape, raising awareness, and tackling challenges in the sector.
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Sunny Side Up
As power demand continues to rise and power production continues to fall behind, it's the same old story for Zambia, still wrestling with an ongoing energy crisis. Public- and private-sector drives are seeking to mitigate this deficit by activating the country's solar industry.
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Margaret K. Chalwe-Mudenda, Director General, Zambia Information and Communications Technology Authority (ZICTA)
TBY talks to Margaret K. Chalwe-Mudenda, Director General of Zambia Information and Communications Technology Authority (ZICTA), on new projects, the ZNDC, and expectations for the year ahead.
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Hon. Dora Siliya, Minister, Agriculture
TBY talks to Hon. Dora Siliya, Minister of Agriculture, on the investments being made in agriculture to enable agricultural households, diversifying Zambia's basket of produce, and making international markets more accessible for local producers.
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Hon. Charles R. Banda, Minister, Tourism and Arts
TBY talks to Hon. Charles R. Banda, Minister of Tourism and Arts, on the wealth of tourism destinations within Zambia, efforts to bring more visitors to the country, and what the Tourism Development Fund will contribute to developments.
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