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Saturday, May 28, 2011

Zambian Copper Miners Railway Link May Miss Cargo Target on Work

May 27 -- Tanzania Zambia Railway Authority, manager of the link that connects Tanzania's port of Dar es Salaam to Zambia's copper mines, said cargo volumes may be 14 percent below target this year because of work stoppages.

The strikes may also curb expansion plans, amid pledges by companies including Vedanta Resources Plc's Konkola Copper Mines to triple shipments on the line if capacity is increased, Conrad Simuchile, spokesman for the Dar es Salaam- based authority, said in an interview on May 25. The stoppages were triggered by disputes over the nationality of employees as well as delays in paying wages, he said.

"We have had illegal work stoppages every month for the past 10 months," Simuchile said. "We have lost not less than $4 million over the past 10 months due to work stoppages.

We have had illegal work stoppages every month for the past 10 months,” Simuchile said. “We have lost not less than $4 million over the past 10 months due to work stoppages.”
Zambia is Africa’s biggest copper producer. Shipments of the metal rose 0.9 percent in the first quarter to 200,037 tons, according to data on the Bank of Zambia’s website. The southern African nation is targeting production of 900,000 tons this year, up from 819,000 tons in 2010, according to the central bank.
Tazara, as the company is know, manages the 1,860- kilometer (1,156-mile) railroad that links Dar es Salaam to New Kapiri Mposhi outside Lusaka, the Zambian capital. Tanzanian employees of Tazara, as the authority is known, have complained that the company prefers to hire Zambian workers and that their salaries aren’t paid on time.

The statement quoted the management as saying the authority has begun resolving some of the problems that nearly set off another round of strikes only days ago.
It said new arrangements have been made under which “local cash flow isn’t wholly dependent on revenue collection in Zambia, ensuring that if ever there is any delay in transferring funds to Tazara’s Dar es Salaam headquarters, the railroad carrier gets access to short-term financing from a local financial institution”.
Simuchile called the transfer problem “unavoidable”, saying that was because Zambia is the largest revenue collection point for the carrier and the money has to be consequently moved to the Dar es Salaam headquarters “before it is processed and recapitalised”.
He said all of Tazara’s 2,800 employees have been received their salaries for last month “and salaries for May will be issued on schedule, by the end of the month”.
The statement said the management “understands that it cannot break this vicious cycle of accusations and strikes without the cooperation of its employees”.
“We need the support of everybody,” it said, adding that workers and management would have to “find common ground to move the railways outfit forward”.
Tazara’s statement was a response to recent calls from employees to the governments of Tanzania and Zambia to pressure the carrier to pay their salaries promptly.
The workers argued that the carrier was financially insecure and not in a position to meet its payroll obligations, adding in a statement: “If (Tazara) cannot buy fuel for its passenger trains, how can they pay us?”
In its heyday, Tazara operated a fleet of passenger and cargo trains on the 1,860-kilometre Chinese built line once fondly referred to as the “Great Uhuru Railway”. It is now however reeling under the weight of operational problems.
The railway’s construction then stood as the largest single project ever undertaken jointly by Tanzania and Zambia and the largest single economic assistance project ever financed by the Chinese government.
Meanwhile, Tazara workers in Mbeya have been on strike for three consecutive days to press for payment of their salaries. This has prompted intervention by top officials of the Tanzania Railway Workers Union (TRAWU), with deputy chairman Mussa Kalala telling the workers that they (the union) met Transport minister Omari Nundu recently “and all your claims and demands were presented to him”.
He said the union has given the minister until today to respond to their grievances, including those involving former Tazara employees.

Barrick Reviews Zambian Clearance for Equinox Acquisition

Zambia approved Barrick Gold Corp. (ABX)’s purchase of the Lumwana copper mine as part of a C$7.3 billion ($7.5 billion) takeover of Equinox Minerals Ltd. (EQN), the southern African nation’s antitrust body said.
Barrick, the world’s largest producer of the metal, must let the Zambia Consolidated Copper Mines Investment Holdings keep its 2.2 percent stake in Equinox as a condition of the approval for the deal, the Zambian Competition Commission said in an e-mailed statement today. It must also honor Lumwana’s existing agreements with a local smelter and suppliers, while limiting job losses, the commission said.
“The Board granted final conditional authorization on the premise that the acquisition did not raise any competition concerns because Barrick Gold Corp. (ABX) had no known presence in Zambia and, therefore, unlikely to lead to a situation that could substantially lessen competition in the mining sector,” it said.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or an invitation to sell, any of the securities of Equinox. Such an offer is only made pursuant to the Offer and take-over bid circular, the letter of transmittal, the notice of guaranteed delivery and other related offer materials which the Offeror has filed with the Canadian securities regulatory authorities and mailed to holders of Equinox Shares. The Offer is not being made to, nor will deposits be accepted from or on behalf of, Equinox shareholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. Furthermore, the information contained in this press release does not constitute financial product advice. It has been prepared without reference to the investment objectives, financial situation, taxation situation and particular needs of any individual Equinox shareholder. Equinox shareholders should consider consulting with their investment, financial, taxation or other professional advisor before taking any action in relation to their investment in Equinox.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information contained in this press release, including any information as to our strategy, projects, plans or future financial or operating performance and other statements that express management's expectations or estimates of future performance, constitute "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "will", "anticipate", "contemplate", "target", "plan", "continue", "budget", "may", "intend", "estimate" and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The Company cautions the reader that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Barrick to be materially different from the Company's estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of gold, copper or certain other commodities (such as fuel and electricity); inaccuracies or material omissions in Equinox's publicly available information or the failure by Equinox to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information; the ability of the Company to complete or successfully integrate an announced acquisition proposal; legislative, political or economic developments in the United States, Canada, Zambia, Saudi Arabia or elsewhere; operating or technical difficulties in connection with mining or development activities; availability and costs associated with mining inputs and labor; the risks involved in the exploration, development and mining business. Certain of these factors are discussed in greater detail in the Company's most recent Form 40-F/Annual Information Form on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities.

The board granted final conditional authorisation on the premise that the acquisition did not raise any competition concerns because Barrick Gold Corporation had no known presence in Zambia and therefore unlikely to lead to a situation that could substantially lessen competition in the mining sector,” said Lingela.

“The Commission has placed a condition on ensuring good environmental practices, and since Lumwana Mine may in future extract uranium, there is also a condition that would protect people and the area from potential radioactive hazards that uranium poses.”

He further said the transaction had been granted on condition that Barrick Gold Corporation does not acquire 2.2 per cent shares in Equinox that Zambia Consolidated Copper Mines – Investment Holdings (ZCCM-IH) holds.

Equinox Minerals Limited is an international mining and exploration company that owns Lumwana Copper Mine, 65 kilometres west of Solwezi.

Barrick Gold Corporation is a Canada-based company which is the world’s leading gold mining company in terms of production, reserves, and market capitalisation and operates gold and copper mines in Canada, United States of America, the Dominican Republic, Australia, Papua New Guinea, Peru, Chile, Argentina, Pakistan and Tanzania.

According to statistics, the Lumwana Mining project currently accounts for approximately 19 per cent of Zambia’s total copper concentrate production. Further, Zambia is estimated to possess 16 per cent of the world’s known copper reserves and currently only contributes about 6 per cent to 7 per cent of the global copper production.