THE PRESIDENT AND THE KCM-VEDANTA SAGA
By Antonio Mourinho Mwanza
1. INTRODUCTION
In May 2019 President Edgar Lungu announced that Government had taken over Konkola Copper Mines (KCM) from Vedanta.
President Lungu said government lawyers, led by Attorney General Likando Kalaluka would soon institute legal proceedings to actualize the takeover so that another investor could come on board.
2. WHY DID GOVERNMENT TAKEOVER KCM
KCM under Vedanta had been facing numerous operational challenges that have persisted to this day, these include the following:
a) Failure to meet it’s financial obligations to workers and subjecting them to poor working conditions.
b) Failure to pay contractors and suppliers
c) High indebtedness and threat of insolvency: as of 30th September, 2013, KCM’s total liability stood at a staggering $1.5 Billion exceeding its assets by a colossal $123 Million making it impossible for the company to meet its financial obligations; as a result KCM defaulted on its $700 Million loan it had contracted from Standard Bank. The loan was secured on the KCM assets.
d) Vedanta failed to comply with its commitment to inject a whooping $397 million direct foreign investment in KCM instead it was diverting funds it was making locally to other projects as a result there was no money to finance its operations.
e) Despite making several promises and commitments, Vedanta, for seven years failed to operationalise Konkola Deep Mining Project.
f) Vedanta did not buy its own equipment and was just sub-contracting its works making it extremely expensive to run the mine.
The above are the key reasons that left Government with no choice but to repossess KCM and opt for another investor.
3. THE PRESIDENT, THE LIES AND THE DECEIT
President Hakainde Sammy Hichilema while in opposition was accused of intending to give back KCM to Vedanta in an event that he won the presidential elections. However, the President then, vehemently and repeatedly refused such accusations. Today the man has been caught running forth and backwards on this issue.
* Last month, on 25th April, 2022, President Sammy said and I quote, “I have seen the media FALSEHOODS that we want to give KCM back to Vedanta“ He called the stories accusing him of planning to give KCM back to Vedanta as malicious propaganda by his detractors.
* On Monday, 9th May, 2022 President Sammy made a 360 degrees u-turn saying, “Vedanta and ourselves have agreed that we suspend litigation”; in essence the President has given back KCM to the dreaded Vedanta.
Looking at all the lies and failures of Vedanta to meet it’s obligations to the workers, suppliers, contractors and the people of Zambia in general, why has this President decided to give back KCM to Vedanta against his own pronouncements when he knows too well that Vedanta does not mean well for our people and our country? Is it payback time? Olo it is the usual UPND policy of favouring foreigners at the expense Zambians?
We challenge the President to come clean on this matter and for once put the interest of Zambia and Zambians above the interest of his foreign friends and his foreign businesses associates.
Issued by
Antonio Mwanza
PF Media Director