HICHILEMA HAD NO PLAN TO FIX ZAMBIA, IT WAS ALL RHETORIC
What’s the problem with KCM and Mopani? What’s troubling Mr Hichilema’s government?
We would like to remind them that the delayed capitalisation of the two mining operations has been and is too painful for Zambia, especially for the residents of the Copperbelt Province. Statements to the effect that the delay is “because the government wants to safeguard the interests of Zambians” are hollow and deceitful because it is clear that Mr Hichilema and the UPND had no plan to “fix” any challenges Zambia was facing before they were elected, and now the problems have grown bigger.
On KCM, the trouble is that Vedanta has spent money and promised to be given back the mine based on agreed terms, including some Key Performance Indicators that Mr Hichilema’s government has included in the draft agreement.
The Key Performance Indicators include the following:
- An investment of more than $1 billion to develop KDMP;
- Salary and wage increments for KCM staff;
- Assume and pay-off debts owing to suppliers and contractors to KCM. These will be mainly debts incurred by the Provisional Liquidator and may be upwards of $300 million, excluding the electricity bill.
Should the Key Performance Indicators not be met, Vedanta will be compelled to offer its shares in KCM to ZCCM IH at a price. It would appear it is the asking price from Vedanta that might now be delaying the conclusion of the deal.
Vedanta is asking for upwards of $2.75 billion should the government invoke the Article to takeover the mines if Vedanta fails to attain certain Key Performance Indicators. It is incomprehensible that such an Article would even be considered because one wonders what safeguard measures have been put in place to safeguard GRZ/ZCCM IH/ and the people of Zambia, who are the ultimate beneficial shareholders in ZCCM IH, from Vedanta should Vedanta deliberately underperform so that ZCCM IH triggers the Articles for the Vedanta shares to be sold to ZCCM IH in the name of not meeting KPIs for Vedanta to automatically be owed $2.75 billion by ZCCM IH.
Should this information we have be true, then this imminent deal between Mr Hichilema’s government will surpass the Lungu government’s $1.5 billion deal with Glencore over Mopani.
Noticeably, there is something fishy about this deal and it can only be because Vedanta may have parted with some money to allow for such a bad deal against Zambians to be tabled for finalisation.
It cannot be wrong to assume that this deal might have an upside for some government officials pulling strings to make it happen. Your guess is as good as mine as to what level such deals are given the go-ahead.
As for Mopani Copper Mine, it appears that after almost concluding with a Chinese group, the government has reopened the bid process by allowing a possible last-minute entry to be considered for its acquisition.
Whatever the reasons, it is now two years since Mr Hichilema was elected into office to manage Zambia with the promise that “Bally will fix it”. It appears Mr Hichilema either underestimated the challenges Zambia is and has been facing, or that may be “Bally” had no plan even after being given 16 years to prepare for the job.
Fred M’membe
President of Socialist Party
