By Peter Sinkamba
WHY THE PUBLIC MUST SUPPORT ON-GOING NEGOTIATIONS WITH VEDANTA RESOURCES
One of the first issues I have requested by my followers, to comment on, after my 60 days ban by Facebook, is on the recently announced Vedanta comeback.
As I have stated before several times, on this and other platforms, the decisions by the PF and UPND governments to resolve the issue of shareholders conflict between ZCCM-IH and Vedanta Resources, through liquidation and receivership respectively, is wrong simply because the two processes are illegal.
I say so because the liquidation and receivership as commenced by the PF and UPND governments contravene Section 66, 67, 70, 71, 72, 73, 74, 82, 83, of the Mines and Minerals Development Act No. 11 of 2015.
Further, liquidation and receivership as done by the two governments for a mining or mineral processing operation offend Section 138 of the Insolvency Act No. 9 of 2017.
Additionally, the two actions do not comply with provisions on the Shareholders Agreement signed by ZCCM-IH, Vedanta Resources and Government in 2004, with respect to conflict resolution between and among shareholders.
Furthermore, several court decisions in Zambia and South Africa since 2019 have been against ZCCM-IH, largely because of the reasons indicated above.
Therefore, if let to be determined in courts to finality, the likelihood is very, very high that ZCCM-IH and Government would compensate Vedanta Resources lots on money from public resources.
Considering that at the time the illegal process was commenced in 2019, KCM used to produce between 170,000 and 180,000 metric tonnes of copper per annum, my modest estimate of compensation to Vedanta Resources would not less than US$3 billion. Such an outcome would automatically increase Zambia’s external debt from US$19 billion to US$21 billion. I think it would be foolish for Zambia to allow such to happen.
So, as I have always indicated since May 2019, the best solution for Zambia is to resolve the impasse through dialogue and out of court settlement. For this reason, I supported and commended the UPND Government when Minister of Mines Honorable Paul Kabuswe announced in July that Government had instructed ZCCM-IH to withdrawal the Vedanta Resources court matters and proceed to out of court settlement.
I therefore hope the that the on-going out-of-court negotiations will be concluded soon so to avoid further depreciation of KCM assets and losses to Zambia.
On whether Vedanta should come back directly or indirectly through a subsidiary, I will deal with this issue on Tuesday when I hold a press briefing specifically address this aspect and touch on conditions proposed for settlement. I will not preempt the press briefing at this point.
Hopefully my analysis on this matter is clear, and makes sense to you my followers. Please feel free to share my thought with your friends.