Sale of Assets to ZCI and Partners

ZAMBIA CONSOLIDATED COPPER MINES LIMITED
27 October 1999

 
 The following statement has been released by Zambia Consolidated Copper Mines
of Zambia and is issued  in London by Bankside Consultants on behalf of the
Company.
 
 
             ZAMBIA CONSOLIDATED COPPER MINES LIMITED
 
    ACQUISITION BY ZCI AND PARTNERS OF THE KONKOLA AND NCHANGA
      DIVISIONS OF ZAMBIA CONSOLIDATED COPPER MINES LIMITED
                      AND ITS NAMPUNDWE MINE
 
 LUSAKA - The Government of the Republic of Zambia (GRZ), Zambia Consolidated
Copper Mines Limited  (ZCCM) and Zambia Copper Investments Limited (ZCI), a
subsidiary of Anglo American Plc, announce that  they have ratified Heads of
Agreement (HOA) regarding the acquisition from ZCCM by ZCI and partners,
through a new company to be formed, of an 80% interest in the assets of the
Konkola Division (including the Konkola Deep Mining Project), the Nchanga
Divison (including the Chingola Refractory  Ores) and the Nampundwe pyrite
mine.
 
 A detailed timetable has been included in the HOA with the objective of
achieving Close of this  transaction by 31 January 2000.
 
 In addition to a 5% free and 15% repayable carried interest in the new
company, ZCCM will receive a  cash consideration of US$30 million payable at
Close, a deferred consideration of US$60 million and  the benefits of copper
and cobalt price participation schemes with a cap of US$125 million over the 
life of the company.
 
 The new company will, subject to the terms of a Development Agreement to be
concluded, be committed  to capital expenditure of US$208 million during the
first three years and will commence the  implementation of the Konkola Deep
Mining Project, at a cost of US$523 million, within 18 months of Close,
provided satisfactory long term, limited recourse project finance is available
and other  objective criteria as agreed to by the parties are satisfied.
 
 Negotiations and drafting of the Development Agreement and other necessary
Agreements between the  parties, which will set out the full terms of the
transaction, are well advanced and are expected to be concluded before the end
of the year.
 
 In addition to acquiring the aforementioned assets, the new company will have
an option to acquire  the Nkana smelter and refinery which will be managed by
Anglo American Plc during the option period. 

  ZCCM intends to sell the Nkana mines, concentrator and cobalt plant as a
separate package within the  timetable for this transaction, but in the event
sale is not concluded, Anglo American Plc will manage these assets as well.
 
 In the parallel transaction, ZCI has agreed to sell its 27.3% interest in
ZCCM to GRZ for $30 million on a deferred payment basis.
 
 These transactions are subject to obtaining all necessary regulatory and
shareholders' approvals.  

 In respect of the latter, ZCI shareholders will be informed by way of a
circular which inter alia  will address the financing of the initial
investment.   Similarly, ZCCM will inform its shareholders  by way of a
circular.
 
 Meanwhile, ZCI has a continued presence of over 20 technical and financial
personnel on the  Copperbelt and plans to increase this number in the period
to 31 January 2000.
 
 Shalaulwa Shimukowa, chairman of ZCCM, said: 'This is a welcome development
in the privatisation of  ZCCM, to which all stakeholders are committed and
augurs well for the future of the mining industry and sustenance of the
national economy.   It ushers in a new era in the mining industry and the new
 role of ZCCM as an investment holding company.'
 
 Commenting on the agreement, the chairman of the GRZ/ZCCM Privatisation
Negotiating Team, Francis  Kaunda, said: 'Withe the imminent sale of Mufulira
Division and the conclusion of negotiations of the sale of the assets in this
transaction, the complex privatisation of ZCCM will be accomplished at the
beginning of the new millennium.'
 
 Jack Holmes, chairman of ZCI, said the company looked forward to completing
the transaction and commencing the process of reinvestment and economic
recovery of the mines.   He went on to say: 'the proposed transaction differs
materially from that contemplated when Codelco was expected to join ZCI
 in a partnership, in that the package of assets to be acquired and the
initial funding requirement are smaller and the projected returns enhanced.  
Thus, while the equity involvement of the International Finance Corporation
(IFC) is still required, the reduced scale means the earlier pre-condition of
a major mining partner falls away.'
 
 Contact:  Keith Irons, Bankside Consultants            0171 220 7477