THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

The definitions and interpretations commencing on page 7 of this Circular apply throughout this Circular, including this cover page (unless specifically defined where used or the context indicates a contrary intention).

Action Required:

• Shareholders are referred to page 4 of this Circular, which sets out the action required of them regarding the ZCCM-IH Extraordinary General Meeting, full details of which are set out in this Circular. If you are in any doubt as to the action you should take, please consult your broker, bank manager, legal advisor, accountant, or other professional advisor.

• If you have disposed of all your ZCCM-IH shares, then this Circular, together with the accompanying Form of Proxy should be forwarded to the broker, banker, or agent through whom you disposed of such shares except that this Circular should not be forwarded or transmitted by you to any person in any territory other than Zambia unless the Circular can lawfully be distributed to such person or in such territory.

ZCCM INVESTMENTS HOLDINGS PLC

[Incorporated in the Republic of Zambia]

Company Registration Number: 119540000771

Share Code: ZCCM-IH

ISIN: ZM0000000037

(“ZCCM-IH” or “the Company”)

CIRCULAR TO SHAREHOLDERS

Regarding:

• The up to US$1.1 billion capital investment by International Resources Holding RSC Ltd, through its wholly owned subsidiary, Delta Mining Limited, for a 51% interest in Mopani Copper Mines plc and the formation of a strategic partnership with ZCCM-IH. The investment will comprise US$620 million in new equity capital, up to US$100 million in settlement of existing third-party letters of credit and up to US$380 million of additional shareholder loans (the “Transaction”).

and enclosing:

• A Notice convening an Extraordinary General Meeting of ZCCM-IH shareholders to consider the proposed Transaction; and
• A Form of Proxy.

Date of Issue: 2^nd February 2024

This Circular is available in English only. Copies of this Circular may be obtained from the registered office of ZCCM-IH, the Sponsoring Broker and the Transfer Secretary whose addresses are set out in the “Corporate Information and Advisors” section of this Circular and will be available from 2^nd February 2024. The Circular will also be available in electronic form from the LuSE's website (www.LuSE.co.zm), ZCCM-IH's website (www.zccm-ih.com.zm) and SBZ's website (www.sbz.com.zm) from 2^nd February 2024

CONTENTS

CONTENTS 2

CORPORATE INFORMATION AND ADVISORS 3

ACTION REQUIRED BY ZCCM-IH SHAREHOLDERS 4

IMPORTANT INFORMATION 5

SALIENT DATES AND TIMES 6

DEFINITIONS AND INTERPRETATIONS 7

SALIENT FEATURES OF THE TRANSACTION 12

1. CIRCULAR TO SHAREHOLDERS 15

2. GENERAL INFORMATION 30

3. INFORMATION RELATING TO THE DIRECTORS AND SENIOR MANAGEMENT OF ZCCM-IH AND ITS SUBSIDIARIES 32

ANNEXURE I: COMPETENT PERSON'S REPORT ON MOPANI 51

ANNEXURE II: INDEPENDENT REPORTING ACCOUNTANT'S REPORT 54

ANNEXURE III: EXTRACTS FROM ZCCM-IH'S ARTICLES OF ASSOCIATION 137

NOTICE OF EXTRAORDINARY GENERAL MEETING 139

CORPORATE INFORMATION AND ADVISORS

ACTION REQUIRED BY ZCCM-IH SHAREHOLDERS

The Definitions and Interpretations commencing on page 7 of this Circular apply throughout this Circular and to this section.

This Circular is important and requires your immediate attention.

COURSES OF ACTION

IMPORTANT INFORMATION

The definitions as set out in the “Definitions and Interpretations” section of this Circular apply to this section regarding important information.

No person has been authorised by ZCCM-IH to give any information or to make any representation not contained in or not consistent with this Circular or any other information supplied in connection with the Transaction. If given or made, such information or representation must not be relied upon as having been authorised by ZCCM-IH, the Sponsoring Broker, the Reporting Accountant, the Legal Advisor, the International Legal Advisor, the Transaction Advisor or the Transfer Secretary. The delivery of this Circular shall not create any implication that there has been no change in the affairs of ZCCM-IH since the date of the publication of this Circular. Further, the delivery of this Circular shall not create any implication that any other financial statement or other information supplied in connection with and which is correct as of the date of the Circular shall remain correct at any time after the date indicated in the document containing the same.

The distribution of this Circular in certain jurisdictions may be restricted by law. Persons into whose possession this Circular comes are required by ZCCM-IH, the Sponsoring Broker, the Reporting Accountant, the Legal Advisor, the International Legal Advisor, the Transaction Advisor and the Transfer Secretary to inform themselves about and to observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Market and industry data

Market and other statistical information used throughout this Circular are based on independent industry publications, government publications or other published independent sources. Although ZCCM-IH believes these sources are reliable, the Company has not verified the information independently and cannot guarantee its accuracy and completeness.

Forward looking statements

This Circular includes certain “forward-looking information”. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including, without limitation those concerning: ZCCM-IH's strategy; financial results, growth prospects and outlook of ZCCM-IH's operations, individually or in the aggregate; ZCCM-IH's liquidity and financial position; and the outcome and consequences of any pending litigation proceedings. These forward-looking statements are not based on historical facts, but rather reflect ZCCM-IH's current expectations concerning future results and events and generally may be identified using forward-looking words or phrases such as “believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “potential” or similar words and phrases. Similarly, statements that describe ZCCM-IH's objectives, plans or goals are or may be forward-looking statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause ZCCM-IH's actual results, performance, or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by these forward-looking statements. Although ZCCM-IH believes that the expectations reflected in these forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

ZCCM-IH shareholders should carefully review all information, including the pro forma financial statements and the notes to the pro forma financial statements, included in this Circular. The forward-looking statements included in this Circular are made only as of the Last Practicable Date. The delivery of this Circular does not at any time imply that the information contained herein is correct at any time after the Last Practicable Date or that any other information supplied in connection with this Transaction is correct as of any time after the date indicated in the document containing the same.

ZCCM-IH undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Circular or to reflect the occurrence of unanticipated events. All forward-looking statements in this Circular and all subsequent written and oral forward-looking statements attributable to ZCCM-IH or any person acting on its behalf have not been reviewed and reported on by ZCCM-IH's auditors in accordance with ISAE 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information included in a prospectus.

SALIENT DATES AND TIMES

QUERIES

If you have any questions on any aspects of this Circular, please contact your legal advisor or other professional advisors, or the Sponsoring Broker, Stockbrokers Zambia Limited respectively at the contact details below:

DEFINITIONS AND INTERPRETATIONS

SALIENT FEATURES OF THE TRANSACTION

This summary section highlights certain information contained in this Circular, which should be read in its entirety for a full appreciation of the subject matter contained herein. If you are in any doubt as to its meaning, or what action to take, please consult, a licensed broker, investment advisor, accountant, lawyer, or other professional advisor immediately.

This section does not purport to be complete and is taken from, and is qualified by, the remainder of this Circular. Capitalised terms not otherwise defined in this section have the same meaning as used in the “Definitions and Interpretations” section of this Circular.

1.CIRCULAR TO SHAREHOLDERS

ZCCM-INVESTMENTS HOLDINGS PLC

 [Incorporated in the Republic of Zambia]

Company Registration Number: 119540000771

Share Code: ZCCM-IH

ISIN: ZM0000000037

(“ZCCM-IH” or “the Company”)

Registered Address: Stand No. 16806, Alick Nkhata Road, Mass Media Complex Area, Lusaka, Zambia.

Directors:

Mr. Kakenenwa Muyangwa (Chairperson),

Mr. Mubita Akapelwa (Vice-Chairperson),

Mr Muyangwa Muyangwa,

Mr. Moses S. Nyirenda,

Bishop John H. Mambo,

Mr. Philippe G. Taussac,

Mrs Masitala N. Mushinga

Dr Ndoba J Vibetti (Chief Executive Officer, Executive Director)

1. INTRODUCTION AND PURPOSE OF THE CIRCULAR

Shareholders are referred to the Transaction Announcement published by the Company on 22 December 2023 wherein the Board of Directors of ZCCM-IH advised Shareholders and the general market that ZCCM-IH entered into an agreement with Delta pursuant to which IRH, acting through its wholly-owned subsidiary, Delta, has committed to invest a total of up to US$1.1 billion into MCM as its Strategic Equity Partner.

Compliance of the proposed Transaction with the LuSE Listing Rules

As per the LuSE Listing Requirements, the proposed Transaction between ZCCM-IH and Delta is a Category 1 transaction and is thus subject to approval by ZCCM-IH Shareholders. Additionally, there is a requirement for a statement giving the directors' opinion on the Transaction.

Accordingly:

• A statement by the Board of Directors of ZCCM-IH recommending the proposed Transaction and confirming whether the proposed Transaction is fair insofar as the shareholders of ZCCM-IH are concerned is provided in paragraph 18 of this Circular.
• Furthermore, the ZCCM-IH Board has obtained a Competent Persons Report in respect of Mopani prepared in accordance with Section 12 of the LuSE Listing Rules. The CPR sets out the information which is currently available on Mopani and includes information on mining licenses, geology, mineral resources, mining engineering/design, mineral processing, tailings and waste rock management, water management, infrastructure, and environmental and social management. The CPR also presents the budgeted production, revenue, estimated capital and operating costs, a cash flow forecast, and the risks and opportunities associated with the development of the underlying assets in general. A summary of the Mineral Resources and Mineral Reserves statement is included in ANNEXURE I on Page 51 of the Circular while the full report is available for inspection at ZCCM-IH's registered offices.
• The ZCCM-IH Board engaged BDO as an Independent Reporting Accountant to review the historical financial information of both Mopani and ZCCM-IH and the pro forma financial information and profit forecasts of ZCCM-IH.
  1. Purpose of the Circular

The purpose of this Circular is to furnish ZCCM-IH shareholders with information regarding:

1. The proposed investment of US$1.1 billion by IRH comprising US$620 million in new equity and further shareholder loans in favour of Mopani for a 51% interest in Mopani;
2. The proposed resolutions required to be voted on and approved by ZCCM-IH shareholders to implement and give effect to the Transaction; and
3. Convening an Extraordinary General Meeting on 23^rd February 2024 at which ZCCM-IH shareholders will be requested to consider and, if deemed fit and acceptable, pass the resolutions approving the Transaction.

1. RATIONALE FOR THE TRANSACTION
   1. BACKGROUND

In June 2022, ZCCM-IH appointed Rothschild & Co to undertake a strategic review in relation to assessing various options available to Mopani to ensure its long-term financial sustainability (the “Strategic Review”).

The Strategic Review was focused on assessing Mopani's balance sheet given its high level of indebtedness and the liquidity requirements necessary to operate, and further develop its mining assets. The outcome of the Strategic Review identified two key initiatives to ensure the sustainability and continued development of Mopani; the first initiative focused on immediate liquidity requirements of Mopani, and the second initiative focused on securing a long-term sustainable funding solution for Mopani by introducing a new SEP to invest in Mopani. Together, these two initiatives underpin the restructuring of Mopani's balance sheet and allow for the implementation of a turnaround plan.

As part of Mopani's balance sheet restructuring process, collaborative engagements between ZCCM-IH, Glencore and the GRZ to ensure Mopani had sufficient working capital to conclude the SEP transaction, led to a US$200 million facility being provided by ZCCM-IH and Glencore to fund the continued operations at Mopani.

In parallel, Rothschild & Co commenced the SEP process, engaging a wide range of strategic and financial investors from around the world with an interest in Mopani and the Copperbelt. Potential SEPs were engaged, and assessed based on:

1. their financial wherewithal to fund Mopani's capital projects and provide additional liquidity;
2. demonstrating a strong mining track record with the ability to implement a turnaround strategy for Mopani;
3. displaying a history of environmental, social and governance best practice, particularly in relation to the social ramifications for employment and localisation on the Copperbelt; and
4. the ability to execute the Transaction in a timely manner.

Following a detailed evaluation process that included thorough engagements with a shortlist of highly credible SEPs, ZCCM-IH selected IRH as the preferred SEP.

1. RATIONALE FOR THE TRANSACTION
   1. Strategic

IHC is one of the largest and fastest growing companies in the Middle East and Africa, and through IRH, it has a strategy to invest in critical minerals in the region, across the entire mining supply chain. The selection of IRH as the preferred SEP was carefully considered against key criteria aligned with the strategic objectives of ZCCM-IH, and the transaction, notability i) the financial strength of the SEP, ii) the mining track record of the SEP, and iii) the ESG credentials of the SEP, amongst others. Most importantly, the Board believes that IRH's partnership with ZCCM-IH and Mopani represents an important strategic step towards the revitalisation of the Zambian economy, the Zambian mining industry, and the continued development of the Copperbelt by enabling the long-term sustainability of Mopani.

IRH's investment into Mopani recapitalises its balance sheet, secures direct and indirect jobs, and provides both funding and technical experience to complete Mopani's Project Development Plan, all of which underpin Mopani's strategy to achieve its target of becoming a 200,000 ton per annum producer of copper cathodes in the next 3 years. Beyond this ZCCM-IH and IRH will work with Mopani and the GRZ to identify other opportunities in the Zambian mining industry that will attract further investment into the region.

Financial strength of IHC

IRH's parent organisation IHC is the largest company listed in Abu Dhabi, and as at 22 January 2024, IHC had a market capitalisation of US$240 billion with sufficient cash reserves and access to credit facilities to fund the Transaction. Securing this finance at closing is critical to the development of Mopani and also enables a restructuring of the Glencore debt which further improves the economic viability of Mopani.

Strong mining track record across the mining value chain

IRH has a technical team of over 120 professionals, with a variety of experience working with major global mining companies, including in geology, engineering, metallurgy, and project management. The IRH team will provide support and expertise to the existing Mopani management team to ensure a successful turnaround of the Mopani operations. IRH will also leverage the expertise of its various subsidiaries and joint venture companies as required, to support the development of ancillary opportunities across the entire mining value chain.

Environmental, social and governance (ESG)

IRH's investment into Mopani has a strict focus across multiple ESG principles. In collaboration with the GRZ, IRH have agreed that no redundancies will be undertaken at Mopani as part of the Transaction, other than performance-related employee issues in the ordinary course of business. IRH has also committed to work with ZCCM-IH and Mopani to optimise local supply chains in order to benefit the Zambian economy and have ensured that, inter alia, Mopani will continue to be managed by the existing local management team. Mopani's existing corporate social responsibility initiatives will continue to receive funding support, including its investments into local schools, hospitals, and sports clubs.

1. Shareholder Value

The success and long-term sustainability of Mopani's operations is strategically imperative in creating tangible value for ZCCM-IH shareholders. Through the Transaction, Mopani is well positioned to achieve its copper production objectives by completing critical PDP initiatives, ultimately leading to improved financial performance and potential future dividends for ZCCM-IH shareholders.

1. OVERVIEW OF ZCCM-IH

ZCCM-IH is an investment holding company with diversified interests in mining, energy, banking, property, and other sectors of the Zambian economy. The company has a primary listing of its Class “B” ordinary shares on the LuSE, and secondary listings on the London Stock Exchange and Euronext Access Stock Exchange in Paris.

The Class B shares represent 39.72% of shareholding and voting rights in the Company. The Class A shares represent 60.28% of shareholding and voting rights in the Company and are not listed on any stock exchange.

The GRZ directly holds Class “B” shares in ZCCM-IH representing a 17.25% shareholding in the Company, and indirectly holds all the Class “A” shares in ZCCM-IH through the IDC, an investments company wholly owned by the Zambian Government while the remaining 22.47% Class “B” shares in ZCCM-IH are held by various institutions and individuals as minority shareholders. The geographical spread of the minority shareholders, who number around 4,300, covers countries in Europe, Africa, the Caribbean, Australia, Asia, and the United States of America.

1. OVERVIEW OF MOPANI

Mopani was incorporated on 10th February 2000 and continues to validly exist in accordance with the Companies Act, No. 10 of 2017. The Company has its central offices situated along Central Street, Nkana West, in Kitwe, Zambia and operates two major mine sites on the Zambian Copperbelt: namely Nkana in Kitwe and Mufulira. Although Mopani was only incorporated in 2000, its history extends back to the 1930s when both Nkana and Mufulira copper mines began operating. These mines are considered some of the oldest and largest copper mines in the world and are recognised as valuable Zambian assets. Nkana Mine comprises four underground mines and several open pits, (although none of the open pits are currently operational) and surface metallurgical units as concentrators and refinery operations. Mufulira mine comprises underground operations as well as concentrators, a smelter and an acid plant. As at the end of November 2023, Mopani had 5,703 direct employees, and 5,293 external contractors and is an important employer and contributor to the Zambian economy, particularly in the Copperbelt area.

1. OVERVIEW OF INTERNATIONAL HOLDINGS COMPANY

International Resources Holding (IRH), an affiliate of the International Holdings Company (ADX:IHC) in Abu Dhabi, IRH is a dynamic conglomerate focused on unlocking the mineral value chain across Africa and beyond. IRH specializes in energy transition minerals such as Copper-Cobalt, Nickel, Lithium, 3T (Tin, Tantalum & Tungsten), Manganese & Graphite, and operates through six verticals: IRH Mining, IRH Geology & Technology, IRH Trading, IRH Refining, IRH Ventures, and IRH Logistics. By forming strategic national government partnerships, IRH has fostered integrated value chains that contribute to substantial employment opportunities, improved infrastructure, and enhanced living standards. From mining to logistics, IRH offers comprehensive end-to-end solutions, to ensure efficiency and the delivery of high-quality products.

IRH will facilitate its investment into Mopani through its wholly owned subsidiary, Delta Mining Limited.

1. KEY MOPANI INFORMATION
   1. Authorised Share Capital of Mopani

As at the date of this circular, Mopani has an authorised share capital of US$ 200,000,000 divided into:

1. Mopani Shareholding

As at the date of this circular, the Mopani shareholding of issued share capital is as follows:

1. Details of Material Loans ( of Mopani )

As at 22 January 2024, Mopani is treated as borrower under the following material facilities:

• Overdraft facility dated 18 September 2023 with African Banking Corporation Zambia Limited with a principal value of US$10 million, with an interest rate equal to the lender's USD base rate minus 5% per annum on a compounding basis, repayable on demand and secured via a corporate guarantee provided by ZCCM-IH;
• Overdraft facility dated 16 May 2023 with Zambia National Commercial Bank plc with a principal value of US$10 million, with an interest rate equal to the lender's USD base rate minus 1.5% per annum on a compounding basis, repayable on demand and secured via a subordination agreement and corporate guarantee provided by ZCCM-IH US$ 10 million;
• Overdraft facility dated 15 June 2022 with Indo Zambia Bank Limited with a principal value of US$5 million, with a processing fee of 1% per annum, repayable on demand and secured via a corporate guarantee provided by ZCCM-IH;
• Overdraft facility dated 29 September 2022 with Ecobank Zambia Limited with a principal value of US$15 million, with an interest rate of 8.5% per annum compounding monthly, repayable on demand and secured via assignment of receivables whereby Mopani channels US$30 million quarterly to its account with Ecobank Zambia Limited, a corporate parent company guarantee provided by ZCCM-IH and a letter of set-off;
• Medium-term loan facility dated 16 May 2023 with Zambia National Commercial Bank plc with a principal value of US$5 million, with an interest rate equal to the lender's USD base rate minus 1.5% per annum on a compounding basis, repayable through 36 monthly instalments from the date of disbursement and secured via a subordination agreement and corporate guarantee provided by ZCCM-IH; and
• Overdraft facility dated 8 November 2023 with Zambia Industrial Commercial Bank Limited with a principal value of US$ 2.857 million with an interest rate of 11% per annum, repayable on demand and secured via a letter of undertaking provided by Mopani to channel US$15 million bi-monthly to its account with Zambia Industrial Commercial Bank Limited and a corporate guarantee provided by ZCCM-IH.
• The Interim Funding Agreement, as detailed within paragraph 8.18 below, with funds drawn down under the Interim Funding Agreement secured via bank guarantees provided by Zambia National Commercial Bank plc and a guarantee provided by ZCCM-IH.

1. Estimated Transaction Expenses Being Incurred by Mopani

The total estimated cost incurred by Mopani in respect of consummation of the Transaction, which includes but is not limited to the preparation of this Circular and negotiation of Transaction Agreements, and which includes advisor fees, regulatory costs, filing costs, advertising and printing costs is estimated at ZMW K9,816,100.00.

1. Litigation Statement ( of Mopani )

Mopani's material legal and/or arbitration proceedings as at 31 December 2023 are listed below:

• Group Five (Zambia) Limited vs Mopani: Mopani filed an appeal on 29 April 2022 in regard to an arbitral award dated 31 January 2022 between it and Group Five (Zambia) Limited and, on 18 September 2023, the High Court for Zambia dismissed Mopani's application to set aside the arbitral award. On 18 January 2024, Mopani paid Group Five (Zambia) Limited all amounts due to it under the arbitral award dated 31 January 2022;
• Murray & Roberts Cementation (Zambia) Limited vs Mopani: Mopani is subject to an arbitral award dated 4 April 2023 between it and Murray & Roberts Cementation (Zambia) Limited and, on 12 June 2023, filed an application to set aside this arbitral award, which was heard on 21 August 2023, following which the Court dismissed Mopani's application Since 31 December 2023, Mopani has paid Murray & Roberts Cementation (Zambia) Limited all amounts due to it under the arbitral award dated 4 April 2023;
• Group R Mining and Exploration (Zambia) Limited vs Mopani: Mopani is subject to an arbitral award issued in a dispute between Mopani and Group R Mining and Exploration (Zambia) Limited and, on 16 August 2023, applied for a correction of the award, and on 20 September 2023, the arbitrators ruled that the previous costs order be corrected and the said award has been corrected. Group R Mining and Exploration (Zambia) Limited have since registered the arbitral award and the arbitral court has given Mopani 90 days to challenge this registration. Mopani has engaged with Group R Mining and Exploration (Zambia) Limited to negotiate a possible instalment payment plan;
• Opermin vs Mopani: In 2020, Mopani received notice of a claim for ZMW 20,400,000 from one of its contractors, Opermin, with whom it is currently in open dialogue to agree a payment plan covering the amount claimed;
• Alfred Mukuka and Howard Mwema vs Mopani and Attorney General of Zambia: Mopani and the Attorney General of Zambia have received notice of a writ of summons and statement of claim from Alfred Mukuka and Howard Mwema disputing Mopani's writ of possession over land at farms no. 840 and 1469, Kitwe, on 17 July 2023. Mopani responded on 1 November 2023 with a combined summons for an order to strike out its involvement in the case as a defendant and/or to dismiss portions of the original claim. A hearing on the case took place on 21 November 2023 and a ruling on Mopani's application to dismiss the matter is awaited on or before the 2 February 2024; and
• Vital Beverages Limited vs Mopani: On 28 December 2023, Mopani received a letter of demand from Vital Beverages Limited claiming Mopani had breached its contract with them by discontinuing the delivery of water from them following notice to employees and testing confirming that water supplied by Vital Beverages Limited was unfit for human consumption. Mopani responded to Vital Beverages Limited on 9 January 2024 denying liability and seeking to engage with Vital Beverages Limited to improve their water treatment processes, and is awaiting a response.

1. Historical Financial Information

Mopani's audited financial statements for the years ended 31 December 2020, 2021 and 2022 as well as their 2023 half-year financials are available for inspection at the offices of ZCCM-IH, KMP and Stockbrokers Zambia, the addresses of which are set out in the “CORPORATE INFORMATION AND ADVISORS” section on page 3 of this Circular.

1. Material Changes Statement

Mopani's controlling shareholder changed from Carlisa to ZCCM-IH on 31 March 2021 as a result of the transfer of 6,210,000 ordinary shares in Mopani from Carlisa to ZCCM-IH.

1. Mopani Prospects and Forecasts

Based on in 2024-2033 Strategic plan, total development meters at Mopani in 2024 are expected to rise to 47,272 meters whilst copper production is also expected to rise to 86,715 tonnes of copper.

According to the Mopani 2024-2033 Strategic Plan, Mopani's management plan to raise US$350 million to complete the development and installation of Synclinorium, Mindola and Mufulira deep shaft projects and associated infrastructure by 2027. This will increase production efficiencies and allow for access to deeper new ore reserves that have the potential to extend the mine life for up to 25-30 years. These projects are currently on care and maintenance and their completion will be key to ensuring Mopani ramp up future production. In addition to completing developmental projects, Mopani will also fine tune the newly commissioned Synclinorium concentrator and expand smelter throughput up to the rated capacity of 850,000 tonnes per annum.

1. Material Contracts Statement

In addition to the material loans described within paragraph 6.3 above, the following are material contracts of Mopani as at the date of this Circular:

• Cathode and anode slimes offtake agreements dated 31 March 2021, as amended from time to time, between Carlisa, Glencore and Mopani.

1. RELATIONSHIP BETWEEN ZCCM-IH AND MOPANI

As at 31st March 2021 ZCCM-IH is the sole shareholder of Mopani. Previously ZCCM-IH only held 10% of issued shares in Mopani which it held since Mopani was incorporated in 2000, following the privatization of Zambia Consolidated Copper Mines Limited (“ZCCM”). Mopani is a combination of assets previously held under the Mufulira Division of ZCCM and some assets that were under the Nkana Division of ZCCM.

ZCCM-IH is the successor company to ZCCM following the privatization of ZCCM in 2000 and unbundling of its operating assets to create several successor companies that include Mopani, Konkola Copper Mines plc, Chambeshi Copper Mines plc, Chibuluma Copper Mines plc, amongst others.

1. KEY DETAILS AND TERMS OF THE TRANSACTION AGREEMENTS
   1. Terms of the Transaction under the Investment Agreement

The terms and conditions of the Transaction are set out in the Investment Agreement which details, with effect from the Closing Date, that:

• Delta shall subscribe for 7,181,633 ordinary shares in Mopani, comprising 51% of the entire issued share capital of Mopani, at a total price of US$ 620m being a price per share of 86.33 of which US$ 85.33 per share is share premium;
• Delta shall procure that Mopani repay US$19 million of the bridge facility agreement dated 20 January 2023, as amended and restated from time to time, and presently between ZCCM-IH as lender and Mopani as borrower; and
• Delta shall fund and effect the novation of facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and both presently between Glencore and Mopani from Glencore to Delta.

Under the Investment Agreement, various parties have also provided various warranties:

• Mopani has warranted to Delta, Fundamental Warranties, Business Warranties and Tax Warranties (all as defined in the Investment Agreement) as at the date of the Investment Agreement;
• Mopani has warranted to Delta, Fundamental Warranties (as defined in the Investment Agreement) as at immediately prior to Closing;
• ZCCM-IH has warranted to Delta, ZCCM-IH Warranties (as defined in the Investment Agreement) as at the date of the Investment Agreement; and
• Delta has warranted and undertaken to ZCCM-IH and Mopani that the Investor Warranties (as defined in the Investment Agreement) as at the date of the Investment Agreement and as at Closing are / will be true and accurate and not misleading;

Under the Investment Agreement, ZCCM-IH has agreed to indemnify and hold harmless:

• Delta in respect of any losses incurred by Delta as a result of any breach of a warranty given by Mopani and ZCCM-IH relating to the basis and accounting principles on which the Management Accounts (as defined under the Investment Agreement) of Mopani have been prepared and that they give a fair view of the assets, liabilities and profit or loss and cash flow of Mopani, provided that this warranty is deemed to be qualified by ZCCM-IH's awareness at the time of giving such warranty; and
• Mopani (up to a maximum aggregate liability of US$25 million) in respect of any losses incurred by Mopani as a result of any amounts which are or become payable to any claimants under a specific list of arbitration and legal proceedings involving Mopani, to the extent such amounts exceed (in aggregate) US$18 million.

Under the Investment Agreement, Claims (as defined under the Investment Agreement) are capped in various ways for various parties:

• For Claims (as defined under the Investment Agreement) against Mopani, the latter is not liable for Claims (as defined under the Investment Agreement) unless the Claim Notice (as defined under the Investment Agreement) is received by Mopani (with a copy to ZCCM-IH) within 24 months following the Closing Date;
• For any ZCCM Fundamental Warranty Claim (as defined under the Investment Agreement) against ZCCM-IH, the latter is not liable unless a Claim Notice (as defined under the Investment Agreement) is received by ZCCM-IH within 3 years of the Closing Date;
• For any Warranty Claim (as defined under the Investment Agreement) other than a ZCCM-IH Fundamental Warranty Claim or a Tax Claim (both as defined under the Investment Agreement) against ZCCM-IH, the latter is not liable unless a Claim Notice (as defined under the Investment Agreement) is received by ZCCM-IH within 18 months of the Closing Date;
• For any Tax Claim (as defined under the Investment Agreement) against ZCCM-IH, the latter is not liable unless a Claim Notice (as defined under the Investment Agreement) is received by ZCCM-IH within 5 years of the Closing Date; and
• For any Claim (as defined under the Investment Agreement) other than a ZCCM-IH Fundamental Warranty Claim, Warranty Claim or a Tax Claim (all as defined under the Investment Agreement) against ZCCM-IH, the latter is not liable unless a Claim Notice (as defined under the Investment Agreement) is received by ZCCM-IH within 12 months of the Closing Date;
• Any Claim notified in a Claim Notice (both as defined under the Investment Agreement) shall be wholly barred and unenforceable and shall absolutely determine and cease if legal proceedings in respect of the Claim (as defined under the Investment Agreement) have not commenced against Mopani or ZCCM-IH by being properly issues and validly served by Delta:
  • In respect of an actual liability or a liability which is otherwise capable of being qualified within 9 months of the date of such Claim Notice (as defined under the Investment Agreement); and
  • In respect of a liability which is contingent only or is otherwise not capable of being quantified, within the earlier of: (i) 9 months from the date that such liability ceases to be contingent and becomes an actual liability or becomes capable of being quantified; and (ii) 12 months of the date of such Claim Notice.
• The maximum aggregate liability of ZCCM-IH shall not exceed, except in the event of fraud:
  • In relation to any ZCCM-IH Fundamental Warranty Claims (as defined under the Investment Agreement), an amount equal to 50% of US$620 million;
  • In relation to any Tax Claims, Business Warranty Claims, Indemnity Claims and claims for breach of the interim covenants set out in the IA, an amount equal to 25% of US$620 million; and
  • In relation to all Claims (as defined under the Investment Agreement), an aggregate amount equal to 100% of US$620 million.
• No liability shall attach to Mopani or ZCCM-IH in respect of any Tax Claim or Warranty Claim (both as defined under the Investment Agreement) unless the aggregate liability of Mopani or ZCCM-IH, as relevant, in respect of:
  • Such Tax Claim or Warranty Claim (both as defined under the Investment Agreement) exceeds US$1.5 million; and
  • All Tax Claims and Warranty Claims exceeds US$7.5 million.

1. Terms of the Transaction under the Shareholders' Agreement

The rights and obligations between Mopani and ZCCM-IH are currently governed by Mopani's articles of association. At Closing, the Shareholders' Agreement in Agreed Form shall be executed and take effect and Mopani's current articles of association will be replaced by new articles of association.

With effect from the Closing Date, under the terms of the Shareholders Agreement:

• GRZ special share: The GRZ, as a result of its special ordinary share in Mopani, shall hold a number of key rights to be notified and receive certain pieces of information in relation to Mopani;
• Distribution Policy: Delta shall have the right to share in 70% and ZCCM-IH 30% of any declared distributions from Mopani until 31 December 2033, decreasing to 65% and 35% respectively until 31 December 2038, decreasing to 60% and 40% respectively until 31 December 2043 and then decreasing to 51% and 49% respectively from 1 January 2044 onwards;
• Appointment of Directors: Mopani's board shall consist of 9 directors, including: (i) 5 directors appointed by Delta of which at least 1 of the Delta appointed directors must be is resident in Zambia; (ii) 3 directors appointed by ZCCM-IH, who must all be Zambian residents; and (iii) 1 director appointed by the GRZ;
• Appointment of Management Team: Delta shall have the ability to select the CEO and CFO of Mopani with any other senior management appointed by ordinary majority vote of the shareholders of Mopani;
• Reserved Matters: The Shareholders' Agreement also includes a number of Reserved Matters (as defined under the Shareholders' Agreement) for which all shareholders of Mopani shall procure that none of these matters can be undertaken without the prior approval of both ZCCM-IH and Delta. These matters include a number of actions (such as changing the articles of association of Mopani or its name), accounting (such as the appointment and removal of Mopani's auditors), commercial (such as any material change in the nature or geographical scope of the Mopani business), employment (such as determination of the renumeration, if any, of Mopani's directors) and insolvency (the making of any compromise or arrangement with Mopani's creditors) matters;
• Lock-up period: ZCCM-IH cannot dispose of any security in Mopani to any person during a period of twenty years from the date of the Shareholders' Agreement and Delta cannot do the same prior to the earlier of the PDP Completion Date or payment by it of the Deferred Subscription Price (as defined under the Investment Agreement). This does not inhibit disposals by Delta where it has become impermissible for it to continue to hold securities in Mopani under applicable law or reasonably expects this will be the case in the next 6 months, Delta is subject to sanctions or other fines or reasonably expects this will be the case in the next 6 months. Any shareholder in Mopani may also continue to transfer securities in Mopani where the transfer is to a Permitted Transferee or with the prior written consent of all other shareholders of Mopani;
• ZCCM-IH Royalty Option: Delta has agreed to consider in good faith, at any time after the PDP Completion Date and at ZCCM-IH's election, the conversion of part of the economic rights associated with ZCCM-IH's shares in Mopani into a royalty on commercial terms to be discussed and agreed between the shareholders of Mopani (such terms to be in line with then current international market practice), with any such conversion to reflect the fair market value of the relevant rights to be converted; and
• Pre-emption rights: Any non-transferring shareholder of Mopani will have the right of first refusal in the event of any transfer by an existing shareholder of Mopani of any securities or interests in Mopani.

1. Terms of the Transaction under the Disclosure Letter

As per the Investment Agreement, all Warranties (as defined under the Investment Agreement) are qualified by any disclosures made in the Disclosure Letter. Under the Disclosure Letter, there are a number of specific disclosures made against specific warranties given by ZCCM-IH and Mopani as well as several general disclosures including: (i) all contents of the Data Room (as defined under the Investment Agreement); and (ii) correspondence between Mopani, ZCCM-IH and its advisers or Glencore, Carlisa and its advisers and Delta and its advisers.

1. Terms of the Transaction under the Completion Disclosure Letter

As per the Investment Agreement, all Warranties (as defined under the Investment Agreement) given as at the Closing Date are qualified by any disclosures made in the Completion Disclosure Letter. Under the Completion Disclosure Letter, a number of specific disclosures shall be made against specific warranties given by ZCCM-IH and Mopani.

1. Terms of the Transaction under the Investor Letter

As per the Investor Letter, the Investor Guarantor guarantees the following payment obligations of Delta under the Investment Agreement and Shareholders' Agreement:

• US$220 million to be paid on the Closing Date by Delta to Mopani as part payment for subscription and issue of the Investor Shares;
• US$400 million of the share premium for subscription and issue of the Investor Shares to be paid to be paid by Delta to Mopani when certain milestones under the Project Development Programme are met in accordance with the Investment Agreement; and
• An amount equal to the Standby Credit (as defined under the Shareholder's Agreement), to be paid by Delta to Mopani.

1. Terms of the Transaction under the Investor Glencore Letter

As per the Investor Glencore Letter, the Investor Guarantor confirms it has available funds, committed capital or access to committed funding, which will be committed by it to fund Delta in an amount sufficient to meet Delta's obligations to pay the Glencore Amount (as defined under the Investment Agreement) on the Closing Date.

1. Terms of the Transaction under the Tripartite Consent to the Transaction

Under the Tripartite Consent to the Transaction, Glencore agrees to waive any claims for breach of or events of default triggered by execution of the IA arising under the existing facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and both presently between Glencore and Mopani.

1. Terms of the Transaction under the Tripartite Consent to the IFA

Under the Tripartite Consent to the IFA, Glencore agrees to waive any claims for breach of or events of default triggered by signing of the Interim Funding Agreement arising under the existing facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and both presently between Glencore and Mopani.

1. Terms of the Transaction under the IRH ACRA

Under the IRH ACRA, Delta shall amend, consolidate and restate the existing facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and both presently between Glencore and Mopani immediately following the novation of such facilities from Glencore to Delta. Whilst executed prior to Closing, the IRH ACRA will only take effect on the Closing Date and as part of the consolidation of these facilities Delta has agreed to reduce the aggregate amount of the facilities to US$400 million which shall carry an annual interest rate of SOFR plus 5%, as per the appended Investor Loan Agreement set to act as the restated terms of the facilities.

1. Terms of the Transaction under the ZCCM ARA

Under the ZCCM ARA, ZCCM-IH shall amend and restate the existing bridge facility agreement dated 20 January 2023, as amended and restated from time to time, presently between ZCCM-IH as lender and Mopani as borrower. Whilst executed prior to Closing, the ZCCM ARA will only take effect on the Closing Date and as per the Investment Agreement US$19 million of the existing bridge facility agreement shall be repaid on the Closing Date, with the remaining principal funds borrowed carrying an annual interest rate of SOFR plus 1%, as per the appended ZCCM Shareholder Loan Agreement set to act as the restated terms of this bridge loan facility.

1. Terms of the Transaction under the Investor Loan Agreement

As per the IRH ACRA, the Investor Loan Agreement shall be appended to the IRH ACRA and represent the terms of the amended, consolidated and restated existing facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and both presently between Glencore and Mopani immediately following the novation of such facilities from Glencore to Delta. On the Closing Date, the Investor Loan Agreement shall represent a loan from Delta to Mopani of US$400 million bearing interest on an annual basis at SOFR plus 5%.

1. Terms of the Transaction under the ZCCM Shareholder Loan Agreement

As per the ZCCM ARA, the ZCCM Shareholder Loan Agreement shall be appended to the ZCCM ARA and represent the terms of the amended, consolidated and restated bridge facility agreement dated 20 January 2023, as amended and restated from time to time, and presently between ZCCM-IH as lender and Mopani as borrower immediately following repayment of US$19 million of the bridge facility by Mopani on the Closing Date. In accordance with the terms of the ZCCM Shareholder Loan Agreement, any remaining funds loaned under the agreement will accrue interest at a rate of SOFR plus 1%.

1. Terms of the Transaction under the Intercreditor Agreement

Under the terms of the Intercreditor Agreement, any proceeds from the enforcement of the Investor Loan Security Agreement shall be applied to repay the Investor Loan Agreement and ZCCM Shareholder Loan Agreement pari passu.

1. Terms of the Transaction under the Glencore Novation Deed

Under the Glencore Novation Deed, on the Closing Date and following the payment of the Glencore Amount (as defined under the Investment Agreement) from Delta to Glencore, Glencore shall novate the facility agreements originally dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and presently between Glencore and Mopani, to Delta.

1. Terms of the Transaction under the Finance Documents Release Deed

Under the Finance Documents Release Deed, the:

• security interests related to the facility agreements originally dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from time to time and presently between Glencore and Mopani, shall be released; and
• a side letter dated 20 January 2023 between ZCCM-IH, Glencore and Carlisa to the bridge facility agreement dated 20 January 2023, as amended and restated from time to time and presently between ZCCM-IH as lender and Mopani as borrower, shall be terminated.

1. Terms of the Transaction under the Offtake Deed of Termination

Under the Offtake Deed of Termination, following subscription and issuance of the Investor Shares to Delta on the Closing Date, the cathode and anode slimes offtake agreements dated 31 March 2021, as amended from time to time, and presently between Carlisa, Glencore and Mopani, shall be terminated.

1. Terms of the Transaction under the Delta Trading Offtake Agreement

Under the Delta Trading Offtake Agreement, Mopani shall sell and Delta or an affiliate of Delta shall purchase offtake products (including copper cathodes).

1. Terms of the Transaction under the Interim Funding Agreement

Under the terms of the Interim Funding Agreement, Delta has offered Mopani a pre-Closing facility to drawdown funds up to a maximum of US$130 million, with Delta having the ability to set-off any funds drawn-down against its responsibility to fund Mopani with US$220 million on the Closing Date under the terms of the Investment Agreement. The facility is repayable in full upon Closing. Should Closing not occur, the facility will become repayable in full upon the Longstop Date under the Investment Agreement or if the Investment Agreement terminates prior to the Longstop Date, on the termination date of the Investment Agreement.

1. Terms of the Transaction under the Investor Loan Security Agreement

Under the Investor Loan Security Agreement, Mopani shall grant a charge, effective as of the Closing Date, in favour of Delta over all assets of Mopani as security for Mopani's obligations under the Investor Loan Agreement.

1. Terms of the Transaction under the Glencore Royalty Agreement

Under the Glencore Royalty Agreement, if the price of copper per metric ton exceeds US$12,000 in any calendar month from the date of the Glencore Royalty Agreement till 30 June 2036 or when the Glencore Royalty Agreement is terminated by mutual agreement of Mopani and Glencore, Glencore shall receive a royalty of 10% of any such excess.

1. Terms of the Transaction under the Glencore Payment Covenant

Under the Glencore Payment Covenant, US$150 million (plus interest at SOFR plus 5%) shall be paid to Glencore at or following the Closing Date as part consideration for the Glencore Novation Deed, Glencore Royalty Agreement and Offtake Deed of Termination.

Such payment and any associated interest will be paid on a monthly basis over a five-year period by an intermediary bank to Glencore, and the GRZ will make equivalent payments to the intermediary bank.

1. EFFECTS OF THE TRANSACTION

Upon Closing of the Transaction, ZCCM-IH will hold 49% of the ordinary shares in issue of Mopani and Delta will own the remaining 51% through its subscription of the Investor Shares. The shareholding of Mopani post-Closing will be as follows:

Of the up to US$1.1 billion invested by Delta,

• US$620 million of new equity capital will be allocated towards Mopani's capital projects, and to stabilise the working capital position of the business as well as repayment of the bridge facility agreement dated 20 January 2023 of US$19 million, as amended and restated from time to time, and presently between ZCCM-IH as lender and Mopani as borrower.
• Approximately US$400 million will be provided as a shareholder loan to Mopani by way of novation of the Glencore debt, of which:
  • US$300 million will be used as part of the consideration (together with the Glencore Payment Covenant and Glencore Royalty Agreement) to settle the original Glencore transaction debt of US$1.5 billion plus accrued interest
  • The remaining US$100 million will be used to settle existing third-party letters of credit secured by Glencore for Mopani

following these settlements, there shall be no indebtedness between Glencore (as lender) and Mopani (as borrower).

• Further capital of up to US$80 million may be made available to Mopani as shareholder loans, if required, based on the future working capital requirements of the business.

1. FINANCIAL EFFECTS OF THE TRANSACTION (ON ZCCM-IH)

The table below sets out the proforma financial effects of the Transaction based on the audited financial statements of ZCCM-IH for the financial year ended 2022.

The audited proforma financial effects set out below have been prepared to assist ZCCM-IH shareholders to assess the impact of the Transaction on the EPS, HEPS, and NAV per share of the Company. These proforma financial effects are presented for illustrative purposes only, and because of their nature, may not fairly present the Company's financial position, changes in equity, results of operations or cash flows nor the effects and impact of the Transaction going forward.

The audited proforma financial effects have been prepared in accordance with the LuSE Listings Rules and the Guide on Proforma Financial Information issued by the Zambian Institute of Chartered Accountants and that are consistent with those applied in the published audited financial statements of ZCCM-IH for the financial year ended 31 December 2022. These audited proforma financial effects are the responsibility of the Board.

The audited pro forma financial effects set out below should be read in conjunction with the audited financial position as at 31 December 2022 and the statement of comprehensive income for the year ended 31 December 2022 that are set out in ANNEXURE II: INDEPENDENT REPORTING ACCOUNTANT'S REPORT on page 54 of this Circular.

The pro-forma financial effects of the Proposed Transaction on ZCCM-IH are expected to be as follows:

PROFORMA INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022

PROFORMA STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022

1. EXCHANGE CONTROLS

There are no exchange controls in Zambia at the time of publication of this Circular.

1. CAPITAL STRUCTURE

Summary of alterations to the share capital and issued shares in the past three years.

The authorised share capital of the Company has not changed over the past three years.

The authorised and issued share capital of ZCCM-IH, before and after, the Transaction is set out below:

1. WORKING CAPITAL STATEMENT

The directors have considered the position of ZCCM-IH prior to and following the implementation of the Transaction and are of the view that:

• The Company will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of approval of this Circular;
• The consolidated assets of the Company, fairly valued, will be in excess of the consolidated liabilities for a period of 12 months after the date of approval of this Circular;
• The share capital and reserves of the Company will be adequate for ordinary business purposes for a period of 12 months after the date of approval of the Circular;
• The working capital available to ZCCM-IH is sufficient for the Group's present requirements, for at least the next 12 months from the date of issue of the Circular. The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future.

1. MATERIAL LOANS

Details of ZCCM?IH's material borrowings, leases, loans receivable and material inter?company finance are detailed in the Annual Reports which are available for inspection.

1. CONTROLLING AND MAJOR SHAREHOLDERS:

ZCCM-IH has over 4,200 shareholders. As at 31 December 2023, the top five largest shareholders of the Company were as follows:

*Note: most of the minority Shareholders are represented under Euroclear France as “Nominee”.

1. DIRECTORS' INTEREST IN ZCCM-IH

As at 31 December 2023, the interests of Directors (direct and indirect) in ZCCM-IH's shares, as recorded in the register and on the LuSE, were as follows:

There will be no changes in Director's interest as a result of the Transaction.

1. DIRECTORS' INTERESTS IN THE TRANSACTION

Neither the Directors of ZCCM-IH nor any person acting in concert with the Directors has control or is interested, beneficially or otherwise, in the Transaction.

1. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors, whose names are set out on 15 of this Circular, collectively and individually accept full responsibility for the accuracy of the information given in this Circular in relation to ZCCM-IH and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement in this Circular false or misleading, that all reasonable enquiries to ascertain such facts have been made and that this Circular contains all information required by law, the Listings Requirements and the Companies Act.

1. DIRECTORS' OPINIONS, FAIRNESS STATEMENT AND RECOMMENDATIONS

The ZCCM-IH Directors consider the terms of the Transaction to be fair and reasonable based on their independent review of (i) the Competent Persons Report produced by SRK Consulting (UK) Limited; and (ii) the Reporting Accountant report prepared by BDO Zambia. This is in addition to the commercial assessments by the ZCCM-IH Directors. The Directors' recommendation is based on available information and is, in the view of the Directors, adequate information on the underlying asset with which to form this opinion. The Board believes the Transaction to be in line with the 2020 to 2026 Strategic Plan of ZCCM-IH and in the best interests of the Company and the Shareholders as a whole and accordingly recommends unanimously that Shareholders vote in favour of the Resolutions at the EGM.

1. DIRECTORS' REMUNERATION, SERVICE CONTRACTS AND EMOLUMENTS
   • No Director has a service contract with ZCCM-IH and accordingly, no basic salary is paid to any Director by ZCCM-IH.
   • The total aggregate remuneration and benefits paid to directors of ZCCM-IH in the financial year ended 2023 was ZMW 10,510,840.
   • No management, consulting, technical or other fees, directly or indirectly, including payments to management companies have been paid to any Directors of ZCCM-IH. There are no commissions, gains, or profit-sharing arrangements payable to any of the Directors.
   • The remuneration of directors, in their capacity as the Board, will in no way be affected as a result of the Transaction.
   • The Transaction does not result in any changes to the remuneration payable to directors in the form of:
     1. fees for services as a Director;
     2. management, consulting, technical or other fees paid for such services rendered, directly or indirectly, including payments to management companies, a part of which is then paid to a director of the company;
     3. basic salaries;
     4. bonuses and performance-related payments;
     5. sums paid by way of expense allowance;
     6. any other material benefits received;
     7. contributions paid under any pension scheme;
     8. any commission, gain or profit-sharing arrangements;
     9. any shares issued and allotted in terms of a share purchase/option scheme for employees.
   • The company has not entered any contracts relating to the directors' and managerial remuneration, secretarial and technical fees, and restraint payments.
2. PROSPECTS

The Board is confident about the prospects of ZCCM-IH. As set out in its 2020-2026 Strategic Plan, ZCCM-IH is focused on making further investments in the mining industry in Zambia which will have long-term benefits for the Company and its Shareholders. The Company has implemented and will continue to implement various strategic initiatives to sustain growth and will continue to focus on efficiency to deliver superior and sustainable economic returns to Shareholders in the short, medium, and long term. Forecasts for the year ending 2024 are set out under Paragraph 10: Financial Effects of this Section of the circular.

1. MATERIAL CHANGES

The Directors report that, to their knowledge, there have been no material changes in the financial or trading position of the Company since 29^th September 2023 the date of the last published audited financial statements of the Company and set out in the Independent Reporting Accountants' Report on the Historical Financial Information of the Company as set out in Annexure II on page 54 of this circular.

1. MATERIAL CONTRACTS

Since the last reporting date, being the Annual Report for the financial year ended 2022, save for the Investment Agreement, Disclosure Letter, Tripartite Consent to the Transaction, Tripartite Consent to the IFA and Interim Funding Agreement, no material contracts have been entered into by ZCCM-IH other than in the normal course of business.

1. DIRECTORS DECLARATION

None of the directors mentioned above have:

• ever been convicted of an offence resulting from dishonesty, fraud, or embezzlement;
• ever been declared bankrupt or have been sequestrated in any jurisdiction;
• at any time been a party to a scheme or an arrangement or made any other form of compromise with their creditors;
• ever been found guilty in disciplinary proceedings by an employer or regulatory body, due to dishonest activities;
• ever been involved in any receivership, compulsory liquidations, or creditors' voluntary liquidations;
• Except for Mr. Taussac's public censure, in 2021, as part of the previous board of ZCCM-IH, no director has ever received public criticisms from statutory or regulatory authorities, including professional bodies, and has ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;
• ever been barred from entry into a profession or occupation; and
• ever been convicted in any jurisdiction for any criminal offence.

SIGNED BY THE DIRECTORS IN LUSAKA ON 26^th JANUARY 2024

Kakenenwa Muyangwa

NAME SIGNATURE

Mubita Akapelwa

NAME SIGNATURE

Philippe G. Taussac

NAME SIGNATURE

Moses S Nyirenda

NAME SIGNATURE

Muyangwa Muyangwa

NAME SIGNATURE

Bishop John H Mambo

NAME SIGNATURE

Masitala Mushinga

NAME SIGNATURE

Ndoba Joseph Vibetti

NAME SIGNATURE

2.GENERAL INFORMATION

1. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents, or copies thereof, will be available for inspection during normal business hours between 2^nd February 2024 and 23^rd February 2024 from the registered office of the Company, the offices of the Transfer Secretary and the office of the Sponsoring Broker The addresses of which are set out in the CORPORATE INFORMATION AND ADVISORS section on page 3 of this Circular:

• The Transaction Agreements, namely:
  • Investment Agreement;
  • Shareholders' Agreement;
  • Disclosure Letter;
  • Completion Disclosure Letter;
  • Investor Letter;
  • Investor Glencore Letter;
  • Tripartite Consent to Transaction;
  • Tripartite Consent to IFA;
  • IRH ACRA;
  • ZCCM ARA;
  • Investor Loan Agreement;
  • ZCCM Shareholder Loan Agreement;
  • Intercreditor Agreement;
  • Glencore Novation Deed;
  • Finance Documents Release Deed;
  • Offtake Deed of Termination;
  • Delta Trading Offtake Agreement;
  • Interim Funding Agreement;
  • Investor Loan Security Agreement;
  • Glencore Royalty Agreement; and
  • Glencore Payment Covenant,

• The Articles of Association of the Company, the Certificate of Incorporation, and the Certificate of Share Capital.
• The audited annual reports of ZCCM-IH for the fiscal years ended 2020, and 2021, and 2022.
• The audited annual reports of Mopani for the last 3 fiscal years ended 2020, 2021, and 2022.
• Signed copy of the Report of the Independent Reporting Accountant.
• Competent Person's Report on Mopani.
• The written consents of the Competent Person, Transfer Secretary, Legal Advisor, International Legal Advisor, Transaction Advisor, Reporting Accountant and Sponsoring Broker on the Transaction named in this Circular to act in those capacities, none of whom have withdrawn their consent prior to registration.

1. EXPERT'S CONSENT

The Sponsoring Broker (“SBZ”), Transfer Secretary (“Corpserve Transfer Secretaries”), Transaction Advisor (Rothschild & Co), Competent Person (“SRK”), Independent Reporting Accountant (“BDO Zambia”), Legal Advisor (“CCO”) and International Legal Advisor (“BM”) have consented in writing to act in the capacities stated and to their names being stated and, where applicable, their reports being included in this Circular.

1. CORPORATE GOVERNANCE

ZCCM-IH continues to operate by enforcing good corporate governance practices and observing the separation of powers between the Directors and Management on one hand and the Chairperson of the Board and the Chief Executive Officer on the other. Barring the Chief Executive Officer the other seven (7) Directors on the Board as listed in this document are Non-Executive Directors. Company activities are further streamlined by the full utilisation of the existing Audit, Remuneration, and Investments Committees.

1. PRELIMINARY EXPENSES AND ISSUE EXPENSES

The total estimated cost incurred by ZCCM and/or Mopani in respect of consummation of the Transaction, which includes but is not limited to the preparation of this Circular and negotiation of Transaction Agreements, and which includes advisor fees, regulatory costs, filing costs, advertising and printing costs is estimated at ZMW K441,649,438.95.

The table below sets out the breakdown of the estimated costs:

*Transaction Advisor fees are inclusive of a success fee of US$9,000,000 which is contingent on the successful Closing of the Transaction

1. LITIGATION

ZCCM-IH's material legal and/or arbitration proceedings as at 31^st December 2023 are listed below;

• ZCCM-INVESTMENTS HOLDINGS PLC V KONKOLA COPPER MINES PLC (LUSAKA HIGH COURT)

On 21^st May 2019, ZCCM Investments Holdings plc (ZCCM-IH) filed a petition to wind up Konkola Copper Mines plc (KCM) pursuant to Section 57 (g) of the Corporate Insolvency Act, 2017 on the ground that it was just and equitable to do so.

The matter is currently stayed pending the hearing of the arbitral proceedings commenced by Vedanta. Resources Limited. ZCCM -IH and Vedanta Resources Limited are in ex curia settlement discussions with the view of resetting the relationship by and between them with respect to KCM. The intention is to withdraw the winding up petition as part of the larger discussions which involved the execution of an Implementation agreement and a new shareholders agreement on 6th November 2023.

• VEDANTA RESOURCES HOLDINGS LIMITED AND VEDANTA RESOURCES LIMITED V ZCCM INVESTMENTS HOLDINGS PLC

On 3^rd July 2019 ZCCM-IH was served by Vedanta Resources Holdings Limited and Vedanta Resources Limited with a notice of motion for an urgent application issued out of the High Court of South Africa in Johannesburg. Their reason for instituting the action in South Africa is that by virtue of the KCM shareholders agreement, all disputes arising therefrom are to be resolved by arbitration in South Africa and therefore the South African courts have jurisdiction.

The arbitral proceedings were commenced but currently stand suspended by agreement of the parties who are in ex curia settlement discussions with the view of resetting the relationship by and between them with respect to KCM. The intention is to withdraw the proceedings as part of the larger discussions which involved the execution of an Implementation agreement and a new shareholders agreement on 6^th November 2023.

3.INFORMATION RELATING TO THE DIRECTORS AND SENIOR MANAGEMENT OF ZCCM-IH AND ITS SUBSIDIARIES

1. DIRECTORS OF ZCCM-IH

The full names, qualifications, nationalities, addresses and occupations of the directors of ZCCM-IH are set out below.

1. Directors' declarations

None of the directors mentioned above have:

• ever been convicted of an offence resulting from dishonesty, fraud or embezzlement;
• ever been declared bankrupt or sequestrated in any jurisdiction;
• at any time been a party to a scheme of arrangement or made any other form of compromise with their creditors;
• ever been found guilty in disciplinary proceedings by an employer or regulatory body, due to dishonest activities;
• ever been involved in any receiverships, compulsory liquidations, or creditors voluntary liquidations;
• Except for Mr. Taussac's public censure, in 2021, as part of the previous board of ZCCM-IH, no director has ever received public criticisms from statutory or regulatory authorities, including professional bodies, and has ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;
• ever been barred from entry into a profession or occupation; or
• ever been convicted in any jurisdiction of any criminal offence.

1.  ZCCM-IH SENIOR MANAGEMENT

Brief profiles of the members of the ZCCM-IH management committee are set out in the table below.

1. DIRECTORS AND SENIOR MANAGEMENT OF ZCCM-IH SUBSIDIARIES
   1. Limestone Resources Limited (“LRL”)
      1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of LRL are set out below:

1. Senior Management

Brief profiles of the LRL senior management team are set out in the table below.

1. Misenge Environmental and Technical Services Limited (“Misenge”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Misenge are set out below:

1. Senior Management

Brief profiles of the Misenge senior management team are set out in the table below:

1. Nkandabwe Coal Mine Limited (“Nkandabwe”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Nkandabwe are set out below:

1. Kariba Minerals Limited (“Kariba”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Kariba are set out below:

1. Senior Management

Brief profiles of the Kariba senior management team are set out in the table below.

1. Investrust Bank plc (“Investrust”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Investrust are set out below:

1. Senior Management

Brief profiles of the Investrust senior management team are set out in the table below.

1. Zambia Gold Company Limited (“Zambia Gold”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of ZCCM-IH Gold are set out below:

1. Senior Management

Brief profiles of the Zambia Gold senior management team are set out in the table below.

1. Kabundi Resources Limited (“Kabundi”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Kabundi are set out below:

1. Senior Management

Brief profiles of the Kabundi senior management team are set out in the table below.

1. Mopani Copper Mines (“Mopani”)
   1. Board of Directors

The full names, qualifications, nationalities, addresses and occupations of the directors of Mopani are set out below:

1. Senior Management

Brief profiles of the Mopani senior management team are set out in the table below.

ANNEXURE I: COMPETENT PERSON'S REPORT ON MOPANI

Below are extracts (Mineral Resources and Reserves Statements) from the Competent Person's Report. The full report is available for inspection at the offices of ZCCM-IH, Stockbrokers Zambia and Mopani whose addresses are set out in the “CORPORATE INFORMATION AND ADVISORS” section of this circular.

Nkana: SRK Audited Mineral Resource Statement as at 1 January 2023

^1: ASCu only reported for oxide Mineral Resources. Totals include weighted average of combined oxide and sulphide material.

SRK Audited Mufulira Mineral Resource Statement as at 1 January 2023

^1: ASCu only reported for oxide Mineral Resources. Totals include weighted average of combined oxide and sulphide material.

Mufulira SRK audited ore reserve estimate 1 January 2023

ANNEXURE II: INDEPENDENT REPORTING ACCOUNTANT'S REPORT

02 February 2024

The Directors

ZCCM Investments Holdings Plc

ZCCM-IH Office Park

Stand No. 16806, Alick Nkhata Road

Mass Media Complex Area

P O Box 30048

Lusaka, 10101

Dear Sirs,

INDEPENDENT PRACTITIONERS REVIEW REPORT ON THE THREE YEAR AND SIX MONTH HISTORICAL FINANCIAL INFORMATION OF MOPANI COPPER MINES PLC

Report on the Financial Statements

We have reviewed the accompanying financial statements of Mopani Copper Mines Plc (“the Company”), which comprise the statement of financial position as at 31 December 2020, 31 December 2021, 31 December 2022 and 30 June 2023, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period(s) then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standards and the Companies Act of Zambia and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Practitioner's Responsibility

Our responsibility is to express a conclusion on the accompanying financial statements. We conducted our review in accordance with International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements. ISRE 2400 (Revised) requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This Standard also requires us to comply with relevant ethical requirements.

A review of financial statements in accordance with ISRE 2400 (Revised) is a limited assurance engagement. The practitioner performs procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing.

Accordingly, we do not express an audit opinion on these financial statements.

Emphasis of matter – Unaudited financial statements for the six-month period ended 30 June 2023

Without modifying our opinion, we draw to your attention to the fact that we carried out a review of the unaudited six-month period ended 30 June 2023 for Mopani Copper Mines Plc as required by clause 8.7 of the listing rules. Our review was conducted in accordance with International Standard on Review Engagements 2400 (Revised) and the results are presented in an abridged format in the statement of comprehensive and other income, statement of financial position and statement of cash flows. No detailed notes have been presented in relation to the six-month period ended 30 June 2023 as most of the financial reporting close procedures are carried out at the year end. The notes in this report relate only to the audited financial periods ended 31 December 2020, 31 December 2021 and 31 December 2022 for Mopani Copper Mines Plc.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that these financial statements and management accounts do not present fairly, in all material respects, the financial position of Mopani Copper Mines Plc as at 31 December 2020, 31 December 2021, 31 December 2022 and 30 June 2023 and of its financial performance and cash flows for the years then ended, in accordance with the International Financial Reporting Standards and the Companies Act of Zambia.

Report on Other Legal and Regulatory Requirements

The Companies Act of Zambia requires that in carrying out a review, we consider whether or not a company has kept the accounting records and registers as required by this Act. We confirm that in our opinion the accounting records, other records and registers required by the Companies Act of Zambia have been properly kept by the company.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

1.GENERAL INFORMATION

Mopani Copper Mines PLC (“Mopani” or the "Company") is engaged in mining, production and marketing of copper in the Kitwe and Mufulira areas of the Copperbelt province of Zambia. These activities are conducted principally in Zambia.

The Company is incorporated in Zambia under the Companies Act, 2017 of Zambia as a public limited company, and is domiciled in Zambia. The registered Company address is:

Central Offices,

Central Street,

Nkana West,

Kitwe.

2.ADOPTION OF NEW AND REVISED STANDARDS

2.1 New and amended Standards that are effective for the current year

The Company has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2022:

Annual improvements cycle 2018 -2020

IFRS 1, ‘First time adoption of IFRS' has been amended for a subsidiary that becomes a first-time adopter after its parent. The subsidiary may elect to measure cumulative translation differences for foreign operations using the amounts reported by the parent at the date of the parent's transition to IFRS.

IFRS 9, ‘Financial Instruments' has been amended to include only those costs or fees paid between the borrower and the lender in the calculation of “the 10% test” for derecognition of a financial liability. Fees paid to third parties are excluded from this calculation.

Amendments to IAS 37 Onerous Contracts—Cost of Fulfilling a Contract - The amendment clarifies which costs an entity includes in assessing whether a contract will be loss-making. This assessment is made by considering unavoidable costs, which are the lower of the net cost of exiting the contract and the costs to fulfil the contract. The amendment clarifies the meaning of ‘costs to fulfil a contract'. Under the amendment, costs to fulfil a contract include incremental costs and the allocation of other costs that relate directly to fulfilling the contract.

IFRS 16, ‘Leases' COVID-19-Related Rent Concessions Amendment -The IASB has provided lessees (but not lessors) with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19 is a lease modification, provided that the concession meets certain conditions. On 31 March 2021, the IASB published an additional amendment to extend the date of the practical expedient from 30 June 2021 to 30 June 2022. Lessees can elect to account for such rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concession as variable lease payments in the period(s) in which the event or condition that triggers the reduced payment occurs. The March 2021 amendment will only be available if an entity chose to apply the May 2020 optional practical expedient.

Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use

The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PPE any proceeds received from selling items produced while the entity is preparing the asset for its intended use (for example, the proceeds from selling samples produced when testing a machine to see if it is functioning properly). The proceeds from selling such items, together with the costs of producing them, are recognised in profit or loss.

Amendment to IFRS 3, ‘Business combinations', Asset or liability in a business combination clarity. - The Board has updated IFRS 3, 'Business combinations', to refer to the 2018 Conceptual Framework for Financial Reporting, in order to determine what constitutes an asset or a liability in a business combination. In addition, the Board added a new exception in IFRS 3 for liabilities and contingent liabilities. The exception specifies that, for some types of liabilities and contingent liabilities, an entity applying IFRS 3 should instead refer to IAS 37, ‘Provisions, Contingent Liabilities and Contingent Assets', or IFRIC 21, ‘Levies', rather than the 2018 Conceptual Framework.

The Board has also clarified that the acquirer should not recognise contingent assets, as defined in IAS 37, at the acquisition date.

The Company is yet to perform the assessment of the impact of the above changes and amendments. The above standards are expected not to have a material impact on the Company.

At the date of authorisation of these financial statements, the Company has not applied the following new and revised IFRS Standards that have been issued but are not yet effective.

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Company. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Amendments to IAS 17 Insurance Contracts

Amendments to IFRS 3 Reference to the Conceptual Framework

Amendments to IAS 12 Definition of Accounting Estimates

Amendments to IAS 8 Deferred Tax related to Assets and Liabilities arising from a single transaction.

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Company in future periods.

IFRS 17, ‘Insurance contracts'

The IASB issued IFRS 17, ‘Insurance contracts', and thereby started a new epoch of accounting for insurers. Whereas the current standard, IFRS 4, allows insurers to use their local GAAP, IFRS 17 defines clear and consistent rules that will significantly increase the comparability of financial statements. For insurers, the transition to IFRS 17 will have an impact on financial statements and on key performance indicators.

Under IFRS 17, the general model requires entities to measure an insurance contract at initial recognition at the total of the fulfilment cash flows (comprising the estimated future cash flows, an adjustment to reflect the time value of money and an explicit risk adjustment for non-financial risk) and the contractual service margin. The fulfilment cash flows are remeasured on a current basis each reporting period. Whereas the current standard, IFRS 4, allows insurers to use their local GAAP, IFRS 17 defines clear and consistent rules that will significantly increase the comparability of financial statements. For insurers, the transition to IFRS 17 will have an impact on financial statements and on key performance indicators.

Under IFRS 17, the general model requires entities to measure an insurance contract at initial recognition at the total of the fulfilment cash flows (comprising the estimated future cash flows, an adjustment to reflect the time value of money and an explicit risk adjustment for non-financial risk) and the contractual service margin. The fulfilment cash flows are remeasured on a current basis each reporting period. The unearned profit (contractual service margin) is recognised over the coverage period.

Aside from this general model, the standard provides, as a simplification, the premium allocation approach. This simplified approach is applicable for certain types of contract, including those with a coverage period of one year or less.

For insurance contracts with direct participation features, the variable fee approach applies. The variable fee approach is a variation on the general model. When applying the variable fee approach, the entity's share of the fair value changes of the underlying items is included in the contractual service margin. As a consequence, the fair value changes are not recognised in profit or loss in the period in which they occur but over the remaining life of the contract.

IFRS 17, Insurance contracts Amendments

In response to some of the concerns and challenges raised, the Board developed targeted amendments and a number of proposed clarifications intended to ease implementation of IFRS 17, simplify some requirements of the standard and ease transition. The amendments relate to eight areas of IFRS 17, and they are not intended to change the fundamental principles of the standard or unduly disrupt implementation already underway.

Narrow scope amendments to IAS 1 ‘Presentation of Financial Statements', Practice statement 2 and IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors'

The amendments aim to improve accounting policy disclosures and to help users of the financial statements to distinguish changes in accounting policies from changes in accounting estimates.

The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term ‘significant accounting policies' with ‘material accounting policy information'. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements.

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.

Amendments to IAS 1 – Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements - Disclosure of Accounting Policies (continued)

The amendments to IAS 1 are effective for annual periods beginning on or after 1 January 2023, with earlier application permitted and are applied prospectively. The amendments to IFRS Practice Statement 2 do not contain an effective date or transition requirements.

Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”.

The definition of a change in accounting estimates was deleted. However, the Board retained the concept of changes in accounting estimates in the Standard with the following clarifications:

1. A change in accounting estimate that results from new information or new developments is not the correction of an error.
2. The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors.

The amendments are effective for annual periods beginning on or after 1 January 2023 to changes in accounting policies and changes in accounting estimates that occur on or after the beginning of that period, with earlier application permitted.

Amendments to IAS 12, Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction

The amendment clarifies that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. A number of requirements are required to be met in conjunction with this amendment.

3. SIGNIIFICANT ACCOUNTING POLICIES

3.1 Statement of compliance

The annual financial statements of Mopani Copper Mines Plc have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS and with the requirements of the Companies Act, 2017 of Zambia. The annual financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB).

Basis of preparation

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values, at the end of each reporting period as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of IFRS 16, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.

3.2.1 Going concern

The financial statements have been prepared on a going concern basis, which assumes the continuity of normal business activity and the realization of assets and the settlement of liabilities in the normal course of business. During the year ended 31 December 2022, the Company made a loss after tax of US$593 million (2021: Restated profit US$3,904 million). As at 31 December 2022 the Company had accumulated loss of US$780 million (2021: Restated Retained losses of US$ 200 million) whilst the Company's total liabilities exceeded its total assets by US$725 million (2021: Restated Net liabilities of US$144 million). As at 31 December 2022, the Company's current liabilities exceeded its current assets by US$ 82 million.

At the time of acquisition by ZCCM-IH, Mopani owed Glencore more than US$4.3 billion in shareholder loans. This debt was unsustainable for Mopani and was negotiated down to US$1.5 billion. The facility is secured by a charge on Mopani shares, assets and is guaranteed by ZCCM-IH.at the date of this report, there had been no default on the loan and related agreements and Management has continued engaging Glencore to ensure compliance with all the covenants. There is no non-compliance of covenants forecasted for the next financial year. In the worst case scenario of failure, Management will engage Glencore with the option of restructuring the debt.

Production and financial projections have been done as part of evaluation of going concern assumptions through Life of mine modelling.

The Life of Mine of the Company has a positive Net Present Value of US$1,9 billion and to realize this, a total of US$350 million is required to complete Expansion Projects over three years. The shareholder has engaged consultants, Rothschild & Company, to support the process of raising capital and so far, the work is ongoing. The consultant is also involved in the process of finding an equity partner for recapitalization of the Company.

The key assumptions are:

• Average selling price of copper at US$8,039 and copper sales tonnages of 105,585 tonnes for the year 2023.
• Costs incurred in local currency (Zambian Kwacha) have been converted to US$ at a rate of ZMW18 in 2023.
• Forecast medium- and long-term copper prices of above US$8,000 per tonne of copper reflect that the Company will return to profitable trading operations.
• There are no known plans to close down operations in the short and/or medium term as the Company is considered to operate in a strategic industry of the Country. Mopani's capital is currently being restructured with the engagement of Rothschild & Company appointed by ZCCM-IH. The Equity Partner will be expected to inject a total of US$600 million fresh capital while efforts to renegotiate the quantum of the transaction debt are progressing.

The Company is confident that it would be able to source the required funding as indicated above. This funding will address the risk of any material uncertainty regarding significant doubts on the Company's ability to continue as a going concern.

The Directors consider the going concern basis for preparation of the financial statements to be appropriate based on forecast cash flows. The copper price and foreign exchange assumptions used in the forecast have taken into account management's best estimate of current market conditions.

The principal accounting policies are set out below:

3.3 Revenue recognition

The Company recognized revenue from the following major sources;

• Sale of copper cathodes
• Sale of copper concentrates
• Sale of sulphuric acid
• sale of anode slimes
• Revenue is measured based on the consideration to which the company expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognized revenue when it transfers control of a product or service to a customer.

Revenue is measured based on the consideration to which the company expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognized revenue when it transfers control of a product or service to a customer.

Export sales – Copper cathodes, slimes and sulphuric acid.

The Company sells copper cathodes, slimes and sulphuric acid to both related and third party customers. For export sales, revenue is recognized when control of the goods has transferred, being when the goods have crossed the Zambian border. A receivable is recognized by the Company when the goods have crossed the border as this represents the point in time at which the right to consideration becomes unconditional.

Local sales – Copper cathodes, Concentrates and Sulphuric acid.

For sales of Copper cathodes, Concentrates and Sulphuric acid locally, revenue is recognized when control of goods has transferred, being at the point the customer takes goods from the Company's premises.

3.4 Foreign currencies

Items included in the annual financial statements are measured in United States Dollars, being the currency of the primary economic environment in which the Company operates (“the functional currency”). The annual financial statements are presented in US Dollars (“US$”) which is the Company's presentation and functional currency. 

In preparing the financial statements of the Company, transactions in currencies other than the entity's functional currency (other currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary items denominated in other currencies are retranslated at the rates prevailing at the reporting date. Non-monetary items carried at fair value that are denominated in other currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historic cost in a foreign currency are not retranslated. Exchange differences are recognised in the profit or loss in the period in which they arise except for:

• exchange differences on other currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those other currency borrowings; and
• exchange differences on transactions entered into in order to hedge certain other currency risks.

3.5 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Income tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred Income tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be recognized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset recognized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

3.6 Financial instruments

The Company's financial instruments consist of cash and cash equivalents, restricted cash, deposits held by related parties, trade receivables, trade payables and derivative instruments. Financial assets are classified as measured at amortised cost, fair value through other comprehensive income (“FVOCI”) and fair value through profit and loss (“FVTPL”). Financial liabilities are measured at amortised cost or FVTPL

Financial assets and financial liabilities are recognised in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instruments.

Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Restricted cash comprises cash deposits used to guarantee letters of credit issued by the Company or held for escrow purposes.

Cash and cash equivalents and restricted cash are measured at amortised cost.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.

All recognised financial assets are measured subsequently in their entirety amortised cost.

Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):

• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

Despite the foregoing, the Company may make the following irrevocable election/designation at initial recognition of a financial asset:

• the Company may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and
• the Company may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

(i) Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

For financial assets other than purchased or originated credit?impaired financial assets (i.e. assets that are credit?impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit?impaired financial assets, a credit?adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit?impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit?impaired (see below). For financial assets that have subsequently become credit?impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit?impaired financial instrument improves so that the financial asset is no longer credit?impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

1. Amortised cost and effective interest method (cont'd)

For purchased or originated credit?impaired financial assets, the Company recognises interest income by applying the credit?adjusted effective interest rate to the amortised cost of the financial asset from initial recognition.

The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit?impaired. Interest income is recognised in profit or loss.

1. Foreign exchange gains and losses

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically:

• for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss;
• for debt instruments measured at FVTOCI that are not part of a designated hedging relationship, exchange differences on the amortised cost of the debt instrument are recognised in profit or loss. Other exchange differences are recognised in other comprehensive income in the investment's revaluation reserve;
• for financial assets measured at FVTPL that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss; and
• for equity instruments measured at FVTOCI, exchange differences are recognised in other comprehensive income in the investments revaluation reserve.

1. Impairment of financial assets

The Company recognises a loss allowance for expected credit losses (ECL) on investments in debt instruments that are measured at amortised cost or at FVTOCI, lease receivables, trade receivables and contract assets, as well as on financial guarantee contracts. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Company always recognises lifetime ECL for trade receivables, contract assets and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Company recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12?month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12?month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

1. Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the company compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition. In making this assessment, the company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward?looking information that is available without undue cost or effort. Forward?looking information considered includes the future prospects of the industries in which the company's debtors operate, obtained from economic expert reports, financial analysts, governmental bodies, relevant think?tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the company's core operations.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

• an actual or expected significant deterioration in the financial instrument's external (if available) or internal credit rating;
• significant deterioration in external market indicators of credit risk for a particular financial instrument, e.g. a significant increase in the credit spread, the credit default swap prices for the debtor, or the length of time or the extent to which the fair value of a financial asset has been less than its amortised cost;
• existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt obligations;
• an actual or expected significant deterioration in the operating results of the debtor;
• significant increases in credit risk on other financial instruments of the same debtor;
• an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor's ability to meet its debt obligation.

Irrespective of the outcome of the above assessment, the Company presumes that the credit risk on a financial asset has increased significantly since initial recognition when contractual payments are more than 30 days past due, unless the Company has reasonable and supportable information that demonstrates otherwise.

Despite the foregoing, the Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if:

1. The financial instrument has a low risk of default,
2. The debtor has a strong capacity to meet its contractual cash flow obligations in the near term, and
3. Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

1. Definition of default

The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:

• when there is a breach of financial covenants by the debtor; or
• information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Company, in full (without taking into account any collateral held by the Company)

Irrespective of the above analysis, the Company considers that default has occurred when a financial asset is more than 90 days past due unless the Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

1. Credit?impaired financial assets

A financial asset is credit?impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit?impaired includes observable data about the following events:

1. significant financial difficulty of the issuer or the borrower;
2. a breach of contract, such as a default or past due event;
3. the lender(s) of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
4. it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
5. the disappearance of an active market for that financial asset because of financial difficulties.

1. Write?off policy

The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the trade receivables has crossed the law of limitation period past due, whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the Company's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

1. Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward?looking information as described above.

As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Company's understanding of the specific future financing needs of the debtors, and other relevant forward?looking information.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.

The Company recognises an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

1. Derecognition of financial assets

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. recognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in equity instrument which the Company has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings.

Financial liabilities and equity

(i) Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

(iii) Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit and loss (FVTPL).

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the ‘other gains and losses' line item in profit or loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

3.7 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

The Company provides for depreciation on the following basis:

Expenditure on assets under construction is initially shown as capital work in progress and is transferred to the relevant class of property, plant and equipment when commissioned.

Renewal of mine licence is done once it falls due and hence the use of LOM.

Capital work in progress is not depreciated and is carried at cost less impairment.

Asset Impairment

Assets are tested for impairment on a regular basis to prevent overstatement on the balance sheet. Assets that are mostly tested for impairment includes accounts receivable, as well as long-term assets and fixed assets.

When an impaired asset's value is written down on the statement of financial position, there is also a loss recorded on the profit or loss.

At each reporting date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use all assets are considered to be a single cash generating unit. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in the profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, where it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the obligation can be made.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.8 Mine development costs

Exploration and associated costs relating to non-specific projects or properties are expensed in the period in which they are incurred. Significant property acquisition costs and development costs relating to specific properties for which economically recoverable reserves are believed to exist are deferred until the project to which they relate is sold, abandoned or placed into production. No costs are deferred on a property believed to be impaired in value.

Mine development and property acquisition costs, including costs incurred during production to expand ore reserves within existing mine operations, are deferred and amortised over the life of the mines.

Reviews are undertaken regularly to evaluate the carrying values of operating mines and development properties. If it is determined that the net recoverable amount is significantly lower than the carrying value, and the impairment in value is likely to be permanent, a write-down to the net recoverable amount is made by a charge to profit or loss.

3.9 Employee pensions, retirement and termination benefits

Employee benefits

Short-term obligations

1. Liabilities for wages and salaries, including non-monetary benefits and accumulating leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognizes in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the statement of financial position.
2. Retirement benefit obligations

Employees are registered with the statutory retirement benefits pension scheme. A retirement benefits scheme is a pension plan under which the company pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees' benefits relating to employee service in the current and prior periods.

For the retirement benefits scheme, the Company makes mandatory contributions to the National Pension Scheme Authority. These contributions constitute net periodic costs and are charged to the profit and loss as part of employee benefits expense in the year to which they relate. The Company has no further obligation once the contributions have been paid.

1. Other entitlements

The estimated monetary liability for employees' accrued annual leave entitlement at the statement of financial position date is recognizes as an expense accrual. 

Certain employees are entitled to a gratuity when they complete a two-year contract with the Company. An accrual is made for the estimated liability for such entitlement as a result of services rendered by these employees up to the statement of financial position date. The Company recognizes a liability and an expense for bonuses, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. 

The Company recognises a provision where contractually obliged or where there is past practice that has created a constructive obligation.

The Company makes contributions alongside employees to an externally managed retirement benefits contribution pension scheme. The Company also contributes alongside qualifying employees to the National Pension Scheme Authority which is a statutory retirement benefits contribution pension scheme.

The company also pays short term employee benefits to qualifying employees.

In addition to the above contributions employees are entitled to retirement benefits under a collective agreement or the terms of their conditions of service. A liability is raised for past service on the basis of present conditions and earnings. All contributions made by the Company are dealt with in the profit or loss for the period in which they arise.

The Company also contributes to Saturnia Pension Fund, a retirement benefits contribution pension scheme.

For retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognizes in other comprehensive income in the period in which they occur. Past service cost is recognizes in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined liability or asset. Retirement benefit costs are recognizes as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
• net interest expense or income; and
• remeasurement.

The retirement benefit obligation recognizes in the company's financial position represents the actual deficit or surplus in the Company's retirement benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognizes at the earlier of when the company can no longer withdraw the offer of the termination benefit and when the company recognizes any related restructuring costs.

3.10 Inventories

Finished and Process metal inventories are valued at the lower of cost and estimated net realization value. Cost represents average production cost and includes overhead, administration and selling expenses. Net realization value is determined after the deduction of anticipated realization expenses.

Consumable stores inventories are valued at cost. A provision is made for excess, slow moving and obsolete items. Cost is determined on a continuous average cost basis and includes all direct costs incurred up to delivery at mine.

3.11 Environmental restoration

Provision is made for costs associated with the restoration and rehabilitation of mining sites as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of the extractive industry and are normally accrued to reflect the Company's obligations at that time.

The costs are estimated on the basis of mine closure plans and the estimated costs of dismantling and removing these facilities and the costs of restoration are recognized when incurred reflecting the Company's obligations at that time. A corresponding provision is created on the liability side. The recognized asset is charged to the profit or loss over the life of the asset through depreciation over the life of the operation and the provision is reviewed annually.

Management estimates are based on local legislation and the work of an independent expert. The actual costs and cash outflows may differ from estimates because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration technology.

Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by recognized an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the initial estimate was originally recognized as part of an asset measured in accordance with IAS 16.

Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in the statement of profit or loss and other comprehensive income as part of finance costs.

For closed sites, changes to estimated costs are recognized immediately in the statement of profit or loss and other comprehensive income.

The Company is required to make contributions to the Government for future rehabilitation work relating to its production activities. The contributions are based on an environmental assessment that is performed by environmental auditors.

Provision is made for costs associated with the restoration and rehabilitation of mining sites as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of the extractive industry and are normally accrued to reflect the Company's obligations at that time.

The costs are estimated on the basis of mine closure plans and the estimated costs of dismantling and removing these facilities and the costs of restoration are recognized when incurred reflecting the Company's obligations at that time. A corresponding provision is created on the liability side. The recognized asset is charged to the profit or loss over the life of the asset through depreciation over the life of the operation and the provision is reviewed annually. Management estimates are based on local legislation and the work of an independent expert. The actual costs and cash outflows may differ from estimates because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration technology.

Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by recognized an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the initial estimate was originally recognized as part of an asset measured in accordance with IAS 16.

Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognized in the statement of profit or loss and other comprehensive income as part of finance costs.

For closed sites, changes to estimated costs are recognized immediately in the statement of profit or loss and other comprehensive income.

The Company is required to make contributions to the Government for future rehabilitation work relating to its production activities. The contributions are based on an environmental assessment that is performed by environmental auditors.

3.12 Share capital

Ordinary shares are classified as ‘share capital' in equity. Any premium received over and above the par value of the shares is classified as ‘share premium' in equity.

3.13 Dividends

Dividends on ordinary shares are charged to equity in the period in which they are declared. Proposed dividends after end of the year are only disclosed as part of related dividend notes.

3.14 Cash and cash equivalents and restricted cash

Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Restricted cash comprises cash deposits used to guarantee letters of credit issued by the Company or held for escrow purposes.

Cash and cash equivalents and restricted cash are measured at amortised cost.

3.15 Trade and other Receivables

Except for provisionally priced receivables which are recognized at fair value through profit or loss, all trade and other receivables are recognized initially at their invoice value which represents fair value and do not bear interest and are subsequently carried at amortised cost, less provision for impairment. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all the amounts due according to the original terms of receivables. The amount of the provision is the difference between the carrying amount and the present value of expected cash flows. The amount of the provision is recognized in profit or loss.

Prepayments are initially recognized at cost of consideration paid once it meets the criteria for a prepaid expense and are subsequently carried at cost less amortised amounts.

3.16 Trade payables and other Liabilities

These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.

The amounts are recognized initially at their fair value and subsequently measured at amortised cost using the effective interest method.

4.CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

4.1 Critical judgements in applying accounting policies

During the preparation of annual financial statements in terms of IFRS, the Company's management is required to make certain judgments, estimates and assumptions that may materially affect reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reported year and related disclosures. The estimates and judgments are based on historical experience, current and expected future economic condition and factors. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

4.2 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4.2.1 Income taxes

The tax charged to the profit or loss is subject to agreement with the Zambia Revenue Authority (“ZRA”). When the final tax outcome upon agreement of assessments differs from the amounts initially recorded, such differences are adjusted in subsequent periods. Where the actual assessment differs from management's estimates, the Company would need to increase or decrease the tax charge to the profit or loss by the resulting difference.

In addition, deferred tax assets are recognized for deductible temporary differences and unused tax losses only if it is probable that future taxable profits are available to recognized those temporary differences and losses, and tax losses continue to be available having regard to the nature and timing of their origination and compliance with tax legislation. Assumptions are also made about the application of income tax legislation. These assumptions are subject to risk and uncertainty and there is a possibility that changes in circumstances will alter expectation which may impact the amount of deferred tax assets and deferred tax liabilities recorded on the statement of financial position and the amount of deferred losses and timing differences not yet recognized. In these circumstances the carrying amount of deferred tax assets and liabilities may change, resulting in an impact on the earnings of the Company.

Deferred tax

There was no deferred tax asset balance at the end of the year (2021:US$976 million). However, due to uncertainty of having sufficient taxable income to recognized tax losses before they expire, all previously recognized assets have been reversed and none have been carried forward. Current year assessed losses have not been recognized.

Uncertain tax positions

As part of the share purchase Agreement (SPA) between ZCCM-IH and Glencore International AG, the Company's loans/debt with Glencore were amended and restated as at 31 March 2021 to US$ 1.5 billion. This loan modification was in fulfilment of the Agreement for the Government of the Republic of Zambia through ZCCM- IH to buy Glencore's 90% shareholding in return for US$1.00 consideration and US$ 1.5 billion debt. This transaction thereby gave rise to a loan modification gain that has been recorded in the income statement in the prior year. The tax treatment for this gain is uncertain on the basis that the Zambian Income Tax does not have an express provision that directly deal with the matter. There is equally no judicial precedence from the Tax Appeals Tribunal or a higher court where concrete guidance can be found. The Directors have consulted widely in this transaction related gain and have not accrued for the estimated US$590 million tax that would arise in the unlikely event that the transaction was interpreted as taxable.

4.2.2 Fixed asset impairment review

Impairment tests on property, plant and equipment are only done if there is an impairment indicator. Future cash flows are based on management's estimate of future market conditions.

These cash flows are then discounted and compared to the current carrying value, and, if lower, the assets are impaired to the present value of the cash flows. Impairment tests are based on information available at the time of testing. These conditions may change after year-end.

4.2.3 Exploration and evaluation expenditure

The application of the Company's accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves.

4.2.4 Estimation and assumptions relating to the timing of VAT receivables

In addition to the recoverability of VAT receivables being a key judgement, calculating the present value of these recoveries also includes assumptions regarding the timing of recoveries. Changes to the timings could materially impact the amounts charged to finance costs. The carrying amount of the Company's VAT receivables is disclosed in note 19.

4.2.5 Estimation and assumptions relating to timing of Expansion Capital availability

In assessing the going concern status of the company, management relied on the Life of Mine which has been reviewed by SRK Mining Consultants and in which a Competent Person's Report was issued. The qualification in the CPR was that the Life of Mine is viable subject to availability of Expansion Capital flows. Assertions by the Shareholder indicate the timing of these cashflows is before the end of 2023.

4.2.6 Impairment of Financial Assets

Expected credit losses (“ECL”) are recognized for financial assets held at amortised cost. This is based on credit losses that result from default events that are possible within a 12-month period, except for trade receivables, whose ECLs are on a simplified lifetime basis, and any financial assets for which there has been a significant increase in credit risk since initial recognition, for which ECLs over the lifetime are recognized. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The company has therefore concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.

The expected loss rates are based on the payment profiles of sales over a period of 36 months before 31 December 2022 or 1 January 2022 respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.

4.2.7 Other

Other critical judgements and sources of estimation uncertainty include the following:

1. Legal claim contingency (see details under note 13(a) to the financial statements;
2. Transfer pricing case (see details on note 13 (b) to the financial statements
3. Estimates of mineral resources and ore reserves. Such estimates relate to the category for the resources (measured, indicated or inferred), the quantum and the grade.

5.RISK MANAGEMENT OBJECTIVES AND POLICIES

In the normal course of its operations the Company is exposed to commodity price, currency, interest rate, liquidity and credit risk. In order to manage these risks, the Company has developed a comprehensive risk management process to facilitate control and monitoring of these risks and has since appointed a competent Risk Manager.

5.1 Interest rate risk

Fluctuations in interest rates impact on the value of short-term investment and financing activities, giving rise to interest rate risk. The Company's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings at fixed rates expense the Company to fair value interest rate risk. During 2021 and 2022, the Company's borrowings at variable rates were denominated in US Dollar.

In the normal course of business, the Company receives cash proceeds from its operations and is required to fund working capital and capital expenditure requirements. The cash is managed to ensure that surplus funds are invested to maximise returns whilst ensuring that capital is safeguarded to the maximum extent by only investing with top financial institutions.

5.2 Fair value of assets and liabilities

Fair value is the amount at which assets and liabilities can be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price, where one exists. The estimated fair values of assets and liabilities have been determined by the Company using available market information and appropriate valuation methodologies. However, judgment is necessarily required to interpret market data to estimate fair values. Accordingly, the estimates are not necessarily indicative of the amounts the Company could realise in a current market exchange. The carrying amounts of the assets and liabilities approximate their fair values.

5.3 Operational risk

All policies, procedures and limits are properly documented in each department within the Company and updated occasionally to take account of the changes to internal controls, procedures and limits.

5.4 Strategic risk

The Company's strategic plan is comprehensive in all aspects with particular emphasis on compliance with legal and market conditions and senior management effectively communicates the plan to all staff levels and allocates resources in line with the laid down procedures.

6.REVENUE

The Company derives its revenue from contracts with customers for the transfer of goods at a point in time in the following major product lines.

Disaggregation of revenue

7.MINERAL ROYALTY

8.EXPENSES BY NATURE

9.LOSS BEFORE FINANCE COSTS AND TAX

10.FINANCE COSTS

11.TAXATION

12.BASIC AND DILUTED LOSS PER SHARE

13.COMMITMENTS AND CONTINGENCIES

1. Legal claim contingency

Glencore International AG (the previous majority shareholder) made a decision on 8 April 2020 to place the Mopani operations under care and maintenance in the wake of the COVID-19 situation and other persistent operational challenges. This resulted in termination of contracts with all contractors.

As a result of these terminations, three of the contractors commenced action against the Company in the International Court of Arbitration of the International Chamber of Commerce. The estimated payout is US$19 million should the actions be successful. The Directors are of the view that material losses may arise in respect of these claims at the date of these financial statements and a provision has been made.

1. Transfer pricing case (2012 to 2017)

In October 2020, the Company received a report from the Zambia Revenue Authority (ZRA) relating to assessments for alleged transfer pricing breaches for sales between 2012 to 2017. The report highlighted additional tax to be paid by Mopani amounting to K917 million (US$50.62 million).

In November 2020, Mopani responded to ZRA and objected to the additional tax indicated in the audit report. Following this objection and discussions management had with ZRA, the amount for additional tax to be paid was reduced to K640 million (US$35.33 million).

On 7 April 2021, ZRA issued an assessment to the amount of K281 million (US$15.51 million) to which Mopani has formally objected through their tax experts. On this basis, Directors believe that no

provision is required as at 31 December 2022 as the matter is currently in progress with ZRA for resolution.

1. Capital commitments

The capital commitments will be funded from internally generated cash flows and borrowings from third parties as the need arises.

14.PROPERTY, PLANT AND EQUIPMENT

The directors consider that the carrying value of property, plant and equipment does not exceed their fair values.

The register showing the details of buildings and land, as required by the Section 30 of the Companies Act, 2017 of Zambia, is available during business hours at the registered office of the company.

Mine development includes the environmental restoration costs and details are disclosed in note 15. The assets have been pledged as security up to their carrying values.

Impairment Reversal

In 2020, following challenging trading and economic conditions, disruptions in supply chains and fluctuations in copper prices due to COVID 19 pandemic, a decision was made by Glencore International AG, to place the Company operations on extended care and maintenance subject to Government approval. Accordingly, an impairment loss amounting to U$1,253 million was recognised in the financial statements. The operations specific discount rate used in the calculations was 10.5%.

On 31 March 2021, the Government of the Republic of Zambia through ZCCM-IH completed the 100% acquisition of Mopani following negotiations with Glencore. The new owners abandoned the previous decision to place Mopani operations on care and maintenance. The Company's operations under the new owners were stabilized and production volume increased in excess of care and maintenance levels as well as above budget amounts from 31 March 2021. The global economy recovered with the prices of copper and other commodities surging to record levels amid accelerating demand and lingering supply constraints. Management therefore reassessed its estimates and reversed the impairment recognised in the prior year. The total amount reversed amounted to US$ 801 million.

Restatement of financial statements/ Impairment adjustment

In 2022, ZCCM-IH, the parent company, engaged Stockbrokers Zambia (SBZ) to conduct a valuation of Mopani (the "Company") as at 31 December 2021 and 31 December 2022 respectively. The exercise was commissioned for purpose of a standard ZCCM-IH Consolidated financial statements process, to determine the equity value attributable to ZCCM-IH's stake in Mopani. The resultant valuation by SBZ amounted to a zero value of ZCCM-IH's 100% shareholding, both as at 31 December 2021 and 31 December 2022. This was deemed as an impairment indicator and management proceeded to perform an impairment assessment on Mopani.

Based on valuation analysis of Mopani by SBZ, the Discounted Cash flow (DCF) enterprise value was US$1.3 billion as at 31 December 2021 and US$976 million at 31 December 2022. Management deemed the enterprise value to represent the recoverable amount of Property, Plant and Equipment (PPE). As a result, the Company had written down the value of PPE by US$393 million as at December 2021 and US$300 million as at December 2022, to reflect the derived recoverable amounts at December 2021 and 2022 respectively.

The error has been corrected by restating each of the affected financial statement line items for the prior periods, note that the balances as at 1 January 2021 were not affected by the restatement.

15.ENVIRONMENTAL RESTORATION

The mines and Minerals Regulations, 1998 (Statutory Instrument No. 102 of 1998) provide for the payment of contributions by mine owners into the Environmental Protection Fund designed to provide for environmental restoration of defunct sites. The company contributes into the Environmental Protection Fund and the contributions paid into the Fund are based on the environmental assessment carried out by environmental experts.

16.INVENTORIES

17.TRADE AND OTHER RECEIVABLES

Prepayments are done on goods or services and an asset under receivables is accounted for in our books. Once the goods are delivered or services rendered by the supplier, the prepayment is cleared from our books and cost recognized.

Prepayments are mostly done for long lead items and customer tailored items.

The Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all the trade and sundry receivables. The Company's historical credit loss experience does not show significantly different loss patterns for the various customer segments. Therefore, the grouping of trade receivables is not disaggregated into further risk profiles other than days past due. The loss rates are derived using the Company's own historical credit loss experience and are based on the payment profiles of collections over a period of 90 days. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.

The entity writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. None of the trade receivables that have been written off is subject to enforcement activities.

Fair value on Initial recognition

The Company assesses the expected period over which trade and other receivables are likely to be recovered in order to assess the impact of time value of money on the carrying value of trade and other receivables.

The Company used observable discount rates which best reflects the risk and timing profile of the underlying receivable to determine its fair value. The fair value adjustment is likely to be realized as finance income over the period over which the related receivable will be recovered.

Included in Valued Added Tax (“VAT”) recoverable balance of US$188 million (2021: US$246 million) are refunds amounting to approx. US$98 million (K1,775 million) that have been withheld by the Zambia Revenue Authority (“ZRA”) under the VAT rule eighteen (18) and relate to the period before February 2015.

Tax Audit assessment of output VAT amounting to US$364 million (K6.6 billion) had been raised by ZRA. The assessment covers the years 2011, 2012 and the first quarter of 2013. The basis of assessment is that the Company has not provided all the evidence that was required under the old Rule 18 of the VAT (General) Rules to prove an export and in particular the requirement to submit customs import certificates from the country of final destination. As a consequence, all sales of metal that were zero rated in the returns have been standard rated in the ZRA assessment.

In 2015, VAT Rule 18 was subsequently amended to allow exporters to submit transit documents issued by the customs authority in the country of transit of the goods instead of import certificates from the country of final destination, as proof of export for purposes of VAT zero rating. The amendment was with effect from 23 February 2015. As a result, the Company has been able to claim and receive VAT refunds claimed after 1 March 2015.

The company has however suffered exchange losses on the outstanding VAT refunds.

The Company considers that the outstanding VAT claims are fully recoverable and has classified all VAT balances due based on the expected recovery period.

A US$ 90 million (2021: US$ 98 million) loss on Zambian VAT receipts was recognised in the year ended December 31, 2022, representing the expected phasing of recoverability of the receivable amounts.

A provision for impairment has not been raised in respect of the VAT recoverable, as management believe that the amount is fully recoverable, and discussions are ongoing with Government and the tax authorities.

18.SHARE CAPITAL

19.SHARE PREMIUM

The share premium relates to the excess of the purchase consideration paid over the nominal value of shares allotted. A share premium account is credited for money paid, or promised to be paid, by a shareholder for a share, but only when they pay more than the cost of a share.

20.LONG TERM PROVISIONS AND ACCRUALS

Environmental and restoration costs

Rehabilitation provision represents the accrued cost required to provide adequate restoration and rehabilitation upon the completion of production activities. These amounts will be settled when rehabilitation is undertaken, generally, at the end of a project's life, which ranges in excess of twenty-five years with the majority of the costs expected to be incurred in the final year of the underlying mining operations. The assessment is done by Steffen, Robertson and Kirsten (SRK) Consultants of the United Kingdom.

21.RETIREMENT BENEFITS

1. Defined contribution plan

A defined contribution plan is a pension plan under which the company pays fixed contributions into the fund. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior years.

The company's contributions to the defined contribution schemes are charged to profit or loss in the year to which they relate. The Company has no further obligation once contributions have been paid.

The total expense recognized in the profit or loss of US$4 million( 2021:US$3 million) represents contributions payable to these plans by the company.

1. Terminal benefits

Under the terms of employment, qualifying permanent employees of the Company are entitled to terminal benefits. The terminal benefits are in nature based on the members' length of service and their salary at the earlier of retirement or death or termination from employment. The benefits are paid for by the Company.

The terminal benefits are determined using an actuarial technique to determine the ultimate cost to the company and as such typically exposes the company to actuarial risks such as: interest risk, salary risk and liquidity risk.

The most recent actuarial valuation of the present value of terminal benefits obligation was carried out on 31 December 2022 by Quantum Consultants & Actuaries. The present value of terminal benefit obligation, and the related current service cost and past service costs were measured using the projected unit credit method.

The principal assumptions used for the purposes of the actuarial valuations were as follows:

Significant actuarial assumptions for the determination of the future terminal benefits obligation are discount rate and expected salary increase. The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting year, while holding all other assumptions constant.

Impact on present value of obligations from changes on:

Total retirement benefit obligation recorded on the statement of financial position.

Mopani terminal benefits

22.HOLDING COMPANY AND RELATED PARTY TRANSACTIONS

Until 31 March 2021, the Company was controlled by Carlisa Investments Corporation, incorporated in the British Virgin Islands, which owned 90% of the issued share capital with ZCCM Investments Holdings Plc owning the remaining 10%. Carlisa Investments Corporation is owned by Glencore Plc (formerly Glencore Xstrata Plc); and Skyblue Enterprise Incorporated (18.8)%, a wholly owned subsidiary of First Quantum Minerals Limited.

On 31 March 2021, a Share Purchase Agreement was reached whereby Carlisa Investments Corporation agreed to sell its 90% shares and ZCCM Investments Holdings Plc agreed to purchase the same for a debt consideration of US$1,500,000,000 and a cash consideration of $1.00.

22.1 Trading transactions

22.2 Year end balances