When ZCCM IH management team led by Mabvuto Chipata and the Board of Directors of Zambia’s biggest mining investment company meet with shareholders at the end of June 2021, they will be announcing a USD 2.390 million dividend for its shareholders.
According to the latest SENS announcement from the investment group issued by Company Secretary Chabby Chabala and published on 14 June 2021 in Lusaka, “the Directors will recommend a final dividend payout of USD2,391,590.11”. This translates to ZMW53,064, 601.26 at K0.33 per share.
Maintaining the dividend policy has been a strategic intent for the Management Team. This is why they have made significant developments in ensuring their mining value chain focus strategy is implemented.
According to the published statement, “ZCCM-IH’s investments are steered towards the mining sector” with the three core strategies being employed targeted at driving portfolio growth which include:
- Pursuit of the royalty model in order to introduce new revenue stream;
- Realignment of the portfolio to achieve more focus in mining and mining related activities; and
- Development of turnaround strategies for loss making subsidiaries.
This strategy has seen the company increase it state in a number of its investee companies with the most significant one being the Mopani takeover.
Despite the COVID 19 pandemic, the ZCCM IH management team remain bullish. The reason for this may include a glossier outlook for commodities on the international market. In May 2021, copper prices for example had reached $10, 628 per tonne.
Conversely, with China driving the demand for commodities, “looking into the future, the investment company believes the mining sector is generally expected to face challenges during early to mid-2020 due to depressed commodity prices and disruption in international trade caused by the Novel Coronavirus (COVID-19) pandemic”. According to Bloomberg, “China is expanding its oversight of domestic firms’ commodities trading to include positions taken on overseas markets, the latest step in the government’s campaign to exercise control over soaring raw materials prices“.
However, “despite these challenges, ZCCM-IH is committed to enhance value creation for its shareholders”. This is the motivation of making investments and having more influence in the mining value chain. “Thus, ZCCMIH will continue to diversify within the mining sector to mitigate slumps that may be experienced in some metals at a particular time while taking advantage of surges occurring in other metals during the same time”.