By Oyintari Ben
According to Zambia’s Mining Minister Paul Kabuswe on Tuesday, Zambia has decided to hand back control of Konkola Copper mining (KCM) to Vedanta Resources, putting an end to a dispute about who is the rightful owner of the assets that started when authorities seized the mines in 2019.
Following Vedanta’s reiterated commitment to invest more than $1.2 billion to boost output and pay off debts, the government, which holds a 20% share in KCM, will let Vedanta restore control and operation of KCM’s mines and smelter, Kabuswe said.
Kabuswe also stated that a revised shareholders’ agreement will make the promises made by both shareholders enforceable.
After former President Edgar Lungu’s administration staged the seizure of the KCM assets and forced liquidation in May 2019, accusing the Indian company of failing to meet plans to invest in growing mining output, relations between Zambia and Vedanta, owned by billionaire Anil Agarwal, deteriorated.
Operations at the KCM were almost entirely paralyzed by the forceful takeover, which also touched off protracted legal fights. Vedanta even filed a claim with a London arbitration court to reclaim the copper assets.
The asset has significantly degraded, and the industrial output has decreased substantially, Kabuswe told journalists in Lusaka. A national strategic asset of the nation has undergone a “very sad development,”
The arrangement with Vedanta may be a hint that President Hakainde Hichilema of Zambia is making progress toward his goal of reducing government participation in the mining industry.
The government is looking for a new investor for Mopani Copper Mines as part of its plan to quadruple copper production over the next ten years.
Vedanta has contributed $1 billion, most likely to be used to advance the Konkola Deep Mining Project. This underground operation has lagged due to a lack of funding despite possessing one of the richest copper reserves in the world.
“Underground operations have almost come to a complete halt; KCM unquestionably requires immediate recapitalization,” said Kabuswe.
Vedanta stated in a second statement that in addition to investing $1 billion, it plans to pay $250 million to regional creditors, provide $20 million to charitable causes, and increase employee pay by 20%.