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Tuesday, 20 August, 2002, 15:08 GMT 16:08 UK
Anglo American quits Zambia
Konkola mine
KCM will be seeking a new strategic equity partner
Anglo American has formally quit its mining operations in Zambia.

In reaching a final agreement with the government, Anglo has offered $30m and a loan of $26.5m to keep the operations running at Konkola Copper Mines [KCM] while new investors are found.

Zambia's finance minister, Emmanuel Kasonde, told the BBC's World Business Report that the government remained committed to the privatisation programme and was determined that KCM should remain in private hands.


"A more nimble, smaller operation that can slim down costs may be able to work the mines profitably"

Phillip Clayton, Standard Bank
"The restructuring which has been put in place will significantly enhance KCM's balance sheet and will enable the company to secure additional funding if necessary," he said.

"KCM will also be seeking a new strategic equity partner in the coming months."

Mr Kasonde said the government's financial adviser, Standard Bank, was in seeking new private investment in KCM.

Shock decision

But the process of attracting investment was complicated by the low copper price and the decay in KCM's assets while it waited to be privatised, said Phillip Clayton, an economist at Standard Bank.

"A more nimble, smaller operation that can slim down costs may be able to work the mines profitably," Mr Clayton said.

Anglo American shocked the Zambian government at the beginning of this year by saying it would pull out of the copper belt.

The withdrawal followed nine years of negotiations over the privatisation of the mines, and just two years of running them.

Anglo said that low world metal prices meant that it could no longer run the mines profitably, even after spending $350m upgrading facilities.

 WATCH/LISTEN
 ON THIS STORY
Emmanuel Kasonde, Zambia's finance minister
"The government remains fully committed to the privatisation programme"
Phillip Clayton, Standard Bank Group
"As a source of foreign exchange the copper mines remain very important to the Zambian economy"
See also:

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