By Linda Soko Tembo
Trafigura has filed a request for arbitration against Zambia’s majority state-owned ZCCM Investments Holdings Plc over a 2021 copper prepayment deal, the company said in a statement to the local stock exchange.
The case was filed under the London Court of International Arbitration Rules, and proceedings are confidential. ZCCM-IH stated on Monday, March 31, 2025, that it is contesting the claims.
Company secretary Charles Mjumphi said the dispute arises from a guarantee signed on July 28, 2021, by the company’s former Chief Executive Officer in favour of Trafigura adding that the guarantee was provided as security for a prepayment agreement amounting to over K1.6 billion (US$100 million) between Trafigura and KCM, a copper mining firm in which ZCCM-IH holds shares.
“The arbitration proceedings follow a demand for payment made by Trafigura on 21 November 2023 pursuant to the Guarantee. The Guarantee was signed as security for a ZMW1,663 million (US$100 million) prepayment agreement between Trafigura and Konkola Copper Mines Plc, in which ZCCM-IH is a shareholder,” Mjumphi said.
He stated that the matter is yet to be resolved and could be price-sensitive, urging ZCCM-IH shareholders and the investing public to exercise caution when trading the company’s securities until further updates are provided.
Due to ongoing challenges at Konkola Copper Mines (KCM), the Zambian government placed the company under provisional liquidation. This process was initiated by Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) under Section 57(g) of the Corporate Insolvency Act of 2017.
As a minority shareholder, ZCCM-IH filed a petition for compulsory liquidation in the High Court on May 21, 2019, including an application for a provisional liquidator to protect the company’s assets while the case was being resolved. Since then, KCM has been under the full control of the provisional liquidator.
According to ZCCM-IH’s website, KCM’s challenges were mainly due to the stalled development of the Konkola Deep Mining Project (KDMP). As a result, the company had to rely on third-party copper concentrates to keep its smelter running, leading to low production levels.
ZCCM-IH obtained a court order to appoint a provisional liquidator with full control over KCM’s operations. One of the liquidator’s key tasks was to secure working capital to sustain the mine’s activities.
To address this, the liquidator engaged ZCCM-IH to help find funding. This led KCM to sign a metal prepayment agreement with Trafigura, one of the world’s largest copper traders. Under the deal, Trafigura paid KCM $100 million upfront, which KCM agreed to repay through copper deliveries. The transaction was guaranteed by ZCCM-IH.
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