Minority shareholders in Zambia Consolidated Copper Mines-Investment Holding (ZCCM-IH) say while they support the government’s decision to liquidate Konkola Copper Mines, the move to cancel Vedanta Resources’ mining licence was done in haste as the latter currently has no capacity to run the mines.
In a statement to the media, Thierry Charles, on behalf of Euronext Minority Shareholders of ZCCM-IH, stated that while the difficult situation at KCM had been ongoing for years, the decision to revoke Vedanta’s licence seems to have been taken in haste without preparation and anticipation.
“…as shareholders of ZCCM-IH, we are also concerned about the KCM liquidation…Due to our meagre resources, our company does not have the financial means to maintain KCM mines in operation or maintenance over the long term as evidenced by the liquidation of former lime jewel Ndola Lime Co. We have helplessly witnessed its unfortunate management and inadequate industrial investments. In the end, more than $100 million went up in smoke. Therefore, this additional charge related to KCM will compromise the viability of our holding company ZCCM-IH,” Charles stated. ”
“Furthermore, it is imperative that the future owner of the largest copper mine makes full commitments in a serious industrial project and a fair redistribution so that the Zambian people can finally benefit from the wealth of its mining subsoil and thus initiate the development of the country.”
He stated that ZCCM-IH’s minority shareholders would constantly monitor the situation at KCM.
“Whatever the future shareholding structure that will subsequently be adopted for KCM’s assets, the minority shareholders of ZCCM-IH will continue to look with their thoughtful and watchful eyes at the situation, the people of Zambia having been robbed for far too long,” Charles stated.
He, however, stated that the minority shareholders of the ZCCM-IH supported the decision of the Zambian government, the company’s shareholder, to proceed with the liquidation of KCM.
“For many years, we have wanted strong measures to be taken against mining companies that do not play the fair game with the people of Zambia and ZCCM-IH. For too long, these companies have abused the caring of different Zambian governments, anxious not to hurt international investors and to preserve employment in the Copperbelt. After the appointment of our new chairman Eric Silwamba, we urged him to bang his fist on the table and to get the profiteers on right track in a letter ate 12 September, 2018,” Charles stated.
He doubted Vedanta’s claims of having kept the mine going without making profits.
“As it is to Glencore and its Mopani subsidiary, how can we really believe that Vedanta have kept the mine all this time if it didn’t generate profits? ZCCM-IH got only miserly crumbs during Vedanta’s operation of the KCM mines. The $3 billion investment announced is Vedanta’s sole commitment, the port state of KCM’s facilities appear to contradict this allegation. For several days, Vedanta has been trying to justify the inevitable dramatic situation of KCM but insist on keeping and running the mine. Odd situation… Have we ever seen a leech want to continue sucking at all costs a dead man…? In line with their logic, after such a financial and environmental disaster, they should rather leave Zambia by the back door and by lowering their head,” Charles stated.
“Speaking to the Jain International TRade Organisation in Bangalore, India, 2014, March 22-23, the Vedanta Chairman Anil Agarwal stated about KC: ‘It’s been 9 years [since we’ve owned the company], and since then every year, it is giving us a minimum of 500 million dollars, plus one billion dollars, every year it has been continuously giving back.’ Anil Argawal also explained in detail how he came to buy ‘the largest copper mine in Africa’ at Konkola, describing how he took a chance by offering $25 million rather than the $400 million asking price. Not only does Vedanta despoil Zambia and pollute the land of surrounding villagers, not only does Anil Argawal not keep his promises, but he also has the impudence to mock the Zambia people and their leaders! While he is a spoilsman, humiliating them in this way is disgusting…”
He further questioned First Quantum Minerals’ claims of having $3.5 billion of retained earnings in its accounts.
Charles stated that keeping such a huge amount of money was abnormal.
“First Quantum MInerals is another clear case in point. How can we really believe FQM is letting $3.5 billion sleep in the Kansanshi Mine’s coffers? To keep that huge amount of retained earnings is abnormal. Would they be distributed, the ZCCM-IH’s share would be as much as 700 million while Zambia is in dire need of money and development. Would the purpose of FQM be to stifle the people of Zambia? It may be Mr Pascall and his staff’s strange way of rewarding the Zambians for allowing FQM to build a world mining empire through the Kansanshi Mine,” stated Charles.
“Recently, rumors have circulated that FQM has proposed to buy back our 20 per cent Kansanshi shares for $700 million. In other words, FQM would offer to buy it back with our own money!”