KCM, ZCCM-IH, GOVERNMENT, LAWYERS & VEDANTA PLC NEGOTIATIONS
By Miles B. Sampa, MP
Monday November 7th, 2022
Following the leaked documents last week on the above captioned, I undertook some research to establish the actual status quo.
I have gathered that Vedanta Resources is actually in continuous dialogue with the Government of the Republic of Zambia after the suspension of litigation for an amicable settlement over the dispute of Konkola Copper Mine (KCM).
Apparently both Government and Vedanta’s approach is to protect the asset, its employees, and the communities of Chililabombwe, Chingola, Kitwe, and Nampundwe as the continuation of further legal proceedings will cost a lot to Zambia. This so given that KCM assets continue to deteriorate as the firm has not been operating optimally due to financial challenges and this has had a turning impact on the communities and the whole Copperbelt region.
It turns out that Vedanta with its global footprint and diversified portfolio is the most suitable operator that is experienced, technically capable, financially strong, and has the business acumen to effectively and efficiently run KCM. It intends to immediately turn around the asset-making a significant contribution to the developmental agenda of the country.
Being the legal owner of KCM, Vedanta has constantly been knocking on the New Dawn government door so they work together towards running KCM.
Vedanta is legally strong in the courts in Zambia and the UK. This is well supported by the fact that significant efforts to sell KCM to other companies were made previously but these efforts failed. This is because no investor can buy KCM without the consent of Vedanta given its official status as legal owners of the mine.
A spade has to be called a spade. Circumstances of taking over the mine from Vedanta was highly irregular. This was exemplified by the court of Appeal’s decision that ruled in favour of Vedanta in its November 2020 ruling and stayed the winding-up petition. The matter was then referred to arbitration.
The forceful attempts by the government to reposes KCM from Vedanta did and continue to erode Zambia’s confidence and credibility in the eyes of credible international investors.
Vedanta has however remained resolute in resuscitating its operations in Chililabombwe, Chingola, Kitwe and Nampundwe. This is evident from from their firm agreed with the New Dawn Government to settle matters out of court.
Vedanta is focused on boosting growth and creating a mutually respectful relationship with the New Dawn Government in providing support for the growth and development of the mine so it becomes a reality. KCM evidently has gone in some comatose for a long while and there has to be some give and take compromise between the government and Vedanta. Government will need give KCM and Vedanta a drip dose of ‘red bull’ to jump start operations. It in government and national interest that the KCM asset is quickly safeguarded to a period of stability from it’s current bad state status.
As a nation we should not hurry our heads in the sand but admit that copper mining is still the only significant economic and social backbone of Zambia. Its pivotal and critical therefore that the Zambia government holds with both hands Vedanta and KCM to give them a breath of life for a specified period. This will enable them cruise to full production within months and quickly tap in the current global copper demands and good prices in wake of a surge in electrical cars production and demand. Copper and Colbat are critical in the electrical cars and their batteries manufacturing.
May I repeat that KCM is the biggest strategic national asset of Zambia and there is no investor at the moment that can consider investing in KCM under the current on-going dispute between the parties more so in its current bad state both technically and financially.
Vedanta has given government a written firm commitment to developing the asset in a responsible manner. It’s in writing that they intend to increase the production capacity by investing an additional USD 1.3 billion to increase KCM’s integrated production, improve working conditions for employees and paying all suppliers on time.
They also intend to implement measurable and impactful corporate social responsibility projects in the communities operated by KCM. We looking financial support to likes of Nchanga Rangers FC in Chingola, Konkola Blades FC and Nampundwe FC.
KCM has been on the discussion table for over a year now since the new dawn government won the 2021 generals elections. It’s about time both the Government and Vedanta acted decisively with a mutual ‘ give and take’ approach towards their individual proposals and expectations laid on the table. A win win for the two is a win win for the people of Chingola, Chililabombwe, Nampundwe, the Copperbelt and the Nation at large.
The fate of KCM and Mopani Mines is no longer a topic for political gymnastics. We should reason across the divide in order to save lives of our people and entire nation. The two mines are the blood and oxygen lines for Zambia’s economy that is on a ventilator. Any delays on KCM and Mopani , risks the Country’s ventilator shutting down causing secondary fatal challenges. Dead and buried economically atleast.
Action on Mopani and KCM is needed today and not tomorrow.
Together We Can
MBS07.11.2022