Zambia Cons Copper

RNS No. 2722r
ZAMBIA CONSOLIDATED COPPER MINES LIMITED
4th December, 1997


DISPOSAL OF POWER DIVISION

The Chairman of Zambia Consolidated Copper Mines Limited (ZCCM), Mr Luke
Mwananshiku, on behalf of ZCCM's Board of Directors, is pleased to announce the
completion of the sale of a majority interest in the "JCo" Package, comprising
the electricity transmission, distribution and generation assets of ZCCM's Power
Division to a consortium comprising Midlands Power International Limited, the
National Grid Company Plc and a team of five Zambian management staff.

The assets sold, which have been vested into a newly formed company called
Copperbelt Energy Corporation plc ("CEC"), comprise the electricity
transmission, distribution and generation assets of ZCCM's Power Division, with
some 80 MW of its own standby generation, extensive transmission facilities at
220kV and 66kV covering the whole of the Copperbelt.  It had sales of electrical
energy of 4,887,938 MWh during the finacial year ended 31 March 1997.  The Power
Division is valued at K 103,343 million (US$79.5 million equivalent at exchange
rate of US$1 = K1,300) in ZCCM's books.

The buyer has paid ZCCM cash consideration of US$50 million at Close for 80% of
the share capital of CEC and this cash is expected to be used by ZCCM to reduce
its short term debt and make payments to trade creditors.  The disposal will not
result in any additional distribution to shareholders.  The Copperbelt Energy
Consortium may make an additional deferred payment (maximum US$7.5 million) to
ZCCM contingent on the signing of a long term Power Supply Agreement for the
Konkola Deep Mining Project ("KDMP"). The Consortium has also agreed that CEC
shall assume US$144.3 million of ZCCM's debt (US$73.039 million of which will be
unconditional, with the remainder conditional of CEC's actual future power
demand).  ZCCM has retained a 20% eqiuity interest in CEC, of which 10% is a
free equity interest and 10% is a repayable carried interest.

CEC has undertaken to invest US$25.2 million in the operations during a five
year period and to make an equity investment of US$2 million and a shareholder
loan of US$5.25 million in CEC with ZCCM receiving a full 20% free carried
interest on the principal and interest payments on this loan. 

The Government of Zambia has announced a two stage privatisation of ZCCM which
involves the sale of a majority interest in its operations, followed by one or
more secondary offerings of the Government's residual shareholding in ZCCM.
To date, majority shareholdings have been sold in the Kansanshi, Chibuluma and
Luanshya/Baluba operations as well as the Power Division and an option has been
sold over the Konkola North orebody.  ZCCM is currently negotiating the sale of
its other operating divisions and further announcements relating thereto will be
made shortly.


Contact:

Mr Luke Mwananshiku, ZCCM(telephone + 260-1-229115)
Mr Francis Kaunda, ZCCM Privatisation Team (telephone + 260-1-229115)
Keith Irons, Bankside Consultants (telephone + 44-171-220 7477)

END

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