Economy

Vedanta Responds to Leaked Video

Vedanta-Tom-AlbaneseFollowing a scandalous leaked YouTube video released by the activist organization Foil Vedanta depicting the owner of Konkola Copper Mine (KCM) boasting of his profits from Zambia, Vedanta Resources has released a statement to address the growing public anger.

The mining company emphasizes that the video clip was “taken out of context” as part of a longer speech, and points to $3 billion in capital investment they have made into KCM, as well as being the largest employer in the country and the second-largest taxpayer.

According to a press release from Group Communications and Corporate Social Responsibility Executive Vice President Roma Balwani, “nearly all the returns from KCM have been reinvested back into KCM. (…) In fact, over nine years of ownership by Vedanta Resources, KCM has made $2.9 billion of capital investment and made just $73 million in dividend payments – a fifth of which is to the Zambian government.”

Following the release of the video, numerous civil society groups have voiced their disapproval of Vedanta Resources Chairman Anil Agarwal, whom they felt spoke in an insulting manner toward the Zambian people by boasting of the low price paid to acquire the mine.

The mining company may also be facing increased government scrutiny as a result of the video. Today Vice President Guy Scott said that the Zambia Revenue Authority (ZRA) has written to KCM to ask them to ask them to reconcile the figures by their chairman Anil Agarwal and what they have declared before the tax body, which may pave the way toward some form of state intervention.

Scott said that the issue should be addressed without emotion although the timing of the ZRA inquiry will leave many in doubt given it had to wait for a crisis to act.

The Patriotic Front government has not followed through its campaign message to make the mines pay more to the Zambian tax man.

They have since backtracked on their pledge to renegotiate the development agreements and also refused to impose the windfall tax that has long been the cry of the Zambian people.

The statement did not contain a direct apology for the statements made in the video, but it did quote Vedanta Resources CEO Tom Albanese, who said “KCM has a long mine life, and we are committed to see it through the near term challenges it currently has. We have made the investments, and now we’re making a commitment in terms of all aspects of the management, the stakeholder relations, the government dialogue, to make this the world-leading Company that it deserves to be. Our reinvestment in the business is not for the next three to six months, it’s being reinvested into the business for the next 50 years.”

The company also claims to have invested $120 million in “local communities, providing schools, educational programmes, sustainable agricultural initiatives, critical medical programmes and funding for cultural events.” However, on the leaked video, Mr. Agarwal boasted that KCM makes him $500 million in profits a year, while he acquired the mine for only $25 million.

The group Foil Vedanta has been running a sustained attack campaign against the mining operator from its base in United Kingdom, including a “protest” at the Zambian High Commission featuring mostly non-Zambian activists.

4 Comments

  1. face

    please Zambia lets be serious with our God given resources are we going to be insulted this way? PF did not sign the evil agreement with this mine,send them packing now now and interim management should be put in place to oversee the departure and nationalization of this mine ..we need this money for our roads etc

  2. Bob

    Successive administrations have failed to take action. Politicians will therefore not do anything to change the status quo. At the very least, the government should increase its stake in the mines so that it can benefit not only from taxes but also from dividends. Otherwise the Zambian natural resources in the form of minerals are technically not ours but belong to foreigners, a sad state of affairs.

  3. Bark at ali

    Zambians are a bunch of jealous people. Instead of appreciating thousands of jobs created by Dr, Mahtani we are busy spewing venom, just because he is a successful businessman while most of us utter failure in life. We invite investors to revamp our mines, and when they turn them around which we ourselves miserably failed to run, we get ideas of asking for donations, out of this world taxes, sponsoring soccer teams, maintaining and feeding teams and stadiums, looking after ruling parties leaders and similar kind of extractions.
    If KCM, Mopani and First Quantum moves out today, Zambian Kwacha will be 1,000,0000 for a dollar.

  4. freedom speeche

    Come 2016 a new government will sort out Vendanta.That we can assure you , bunch of thieves.

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