+33.1.42.99.04.

50

22 August 2017 Ref: Bibard - ZCCM-IH

Questions regarding the New Cement Plant at Ndola

BY EMAIL AND DHL

Mr. F.K. Yamba; Mr. P.M. Chanda; Mr. M.C. Kaluba; Mr. Y. Kachinda; Mr. P. Taussac;
Dr. P. C. Kasolo Board Members
-
ZCCM-IH Office Park Stand No. 16806

Alick Nkhata Road Mass Media Complex Area

P.O. Box 30048

Lusaka, 10101,

Zambia

Dear Sirs,

We write to you on behalf of Mr. Bibard, Spokesperson for the minority shareholders of ZCCM-IH.

Our client is very concerned because he understands that ZCCM-IH is trying to approve a
USD 550 million investment in a new cement plant that will be built by a Chinese company.

As it would be a huge investment the minority shareholders of ZCCM-IH would like to have an in-
depth grasp of the situation notably because we understand that other international cement
companies are already present in Zambia and Mr Bibard fears that the market will be in over capacity
by the time the new plant is scheduled to be completed. Mr Bibard is also concerned that this project
could further deteriorate the financial situation of the company.

We were advised by Mr. Bibard that a copy of the following questions were already forwarded to the
management more than 3 weeks ago. Besides, we also sent those questions to Dr. Pius Kasolo, Mr.
Situmbeko Mubano and Mr. Fredson Yamba 2 weeks ago, however we have not received any
answers yet:

What is the current annual consumption of cement in Zambia?

Do you have any annual consumption data for cement and also projections going into future?
We would appreciate to see these projections.
22 August 2017
Page 2

What is the current capacity of the existing plants of Lafarge and Dangote?

What is the current price per ton in the market, and what do you expect to be the cost per ton
once ZCCM-IH project is completed?

What is the cost of the plant and how many bids were secured before ZCCM-IH decided to
work with the proposed Chinese partner?

Will ZCCM-IH have full ownership of the plant?

How will ZCCM-IH finance the USD 550 million project?

It seems that in 2015 the project was already announced what happened then that the
project did not start and what are the changes if any from the plan in 2015 and 2017?

As it is a USD 550 million project, our client would like to make sure that it is economically viable
before the company proceed. The latest write offs of the Ndola Lime subsidiary does not inspire any
confidence in our clients judgement in the review and decision process of the companys
management and board respectively.
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Please note that recent profit warning issued by Lafarge Zambia released on August 10 2017 to the
LuSE only reinforce our clients initial concerns and he again, cannot understand Managements
refusal or postponement to supply the required information. This again leads our client to believe that
there may be other motives behind this project other than pure economic models.

We also remind you that you have fiduciary duties to ZCCM-IH and we specifically ask you to refrain
from making any decision in this matter before all the previous questions are answered and all the
relevant clarifications are provided.

At last, our client formally informs you that if you decide to ignore this letter, he reserves the right to
take any legal action inter alia, to either stop this project and/or file a derivative lawsuit against the
company and against each Board Member.

We remain at your attorneys disposal should he or she wish to discuss the above with us.

Sincerely,

Nicolas Faguer and Samia Mekhaneg

Attorneys at Law
for PAUL HASTINGS (EUROPE) LLP
96 boulevard Haussmann 75008 Paris FRANCE
22 August 2017
Page 3

Attachment: letter dated 4 August 2017 sent to Dr. Pius Kasolo, Mr. Situmbeko Mubano and
Mr. Fredson Yamba

LEGAL_EU # 20821399.1
+33.1.42.99.04.50

4 August 2017 Ref: Bibard - ZCCM-IH

Questions regarding the New Cement Plant at Ndola

BY EMAIL AND DHL

Dr. Pius Kasolo CEO ZCCM-IH

ZCCM-IH Office Park Stand No. 16806

Alick Nkhata Road Mass Media Complex Area

P.O. Box 30048

Lusaka, 10101,

Zambia

Dear Sir,

We write to you on behalf of Mr. Bibard, Spokesperson for the minority shareholders of ZCCM-IH.

Our client is very concerned because he understands that ZCCM-IH is trying to approve a USD 550
million investment in a new cement plant that will be built by a Chinese company.

As it would be a huge investment the minority shareholders of ZCCM-IH would like to have an in-
depth grasp of the situation notably because we understand that other international cement
companies are already present in Zambia and Mr Bibard fears that the market will be in over capacity
by the time the new plant is scheduled to be completed. Mr Bibard is also concerned that this project
could further deteriorate the financial situation of the company.

We were advised by Mr. Bibard that a copy of the following questions were already forwarded to you
about 10 days ago - However we have not received any answers yet.

As a consequence, we have been mandated by Mr. Bibard to formally express the following
questions:

What is the current annual consumption of cement in Zambia?

Do you have any annual consumption data for cement and also projections going into future?
We would appreciate to see these projections.

What is the current capacity of the existing plants of Lafarge and Dangote?
Dr. Pius Kasolo
4 August 2017
Page 2

What is the current price per ton in the market, and what do you expect to be the cost per ton
once ZCCM-IH project is completed?

What is the cost of the plant and how many bids were secured before ZCCM-IH decided to
work with the proposed Chinese partner?

Will ZCCM-IH have full ownership of the plant?

How will ZCCM-IH finance the USD 550 million project?

It seems that in 2015 the project was already announced what happened then that the
project did not start and what are the changes if any from the plan in 2015 and 2017?

Please understand that as it is a USD 550 million project, our client would like to make sure that it is
economically viable before the company proceed.

As you have undoubtedly already carried out a detailed market study, you must already have this
th
information and we thank you in advance to answer to all of the questions herein by August 11 2017.

We remain at your attorneys disposal should he/or she wish to discuss the above with us.

Sincerely,

Nicolas Faguer and Samia Mekhaneg

Attorneys at Law
for PAUL HASTINGS (EUROPE) LLP
96 boulevard Haussmann 75008 Paris FRANCE

Cc: Mr. Fredson Yamba - Secretary to the Treasury;

Mr Situmbeko Mubano Chief Investment Officer - ZCCM-IH.

LEGAL_EU # 20700562.1