Opinion

OPINION: SA Must Pay Attention to Damage Zambia Has Done to its Mining Industry

The last thing SA needs is an antagonistic relationship with a major mining company that spins out of control and beyond reason

A strange battle is playing out in Zambia over the Konkola Copper Mine (KCM), and it has come to court in Johannesburg as India’s Vedanta and the Zambian government wrestle for control of the assets.

The forced liquidation process of KCM, which is backed by the government, and which was launched by ZCCM Investment Holdings — the state-owned mining company that holds a 20% stake in the mine — is odd.

It is also deeply damaging for investor perceptions of Zambia as a copper-mining investment destination, despite the enormous potential latent mineral wealth.

While the matter has largely been fought in Zambia, it is now before the high court in Johannesburg where Vedanta, which has restarted large-scale zinc mining in SA, is asking for the liquidation to be halted and for international arbitration to be started in Johannesburg.

Vedanta has invested $3bn in Zambia over the past 15 years to bring the mine to account and to build a new smelter.
There is clearly something very wrong with the relationship with the government that has now taken such a hard, uncompromising line with Vedanta. Both sides have put their views out but seeing through the spin and posturing is difficult.

It is something that SA must avoid at all costs. It has developed a poor reputation as an investor-friendly mining investment destination, particular during the tenure of then-mineral resources minister Mosebenzi Zwane.
The last thing SA needs is an antagonistic relationship with a major mining company that spins out of control and beyond reason, such as the KCM matter in Zambia, where the state blows hot and cold on its stance towards mining and cannot provide concrete tax regimes.

Vedanta went into Zambia with what it thought were water-tight contracts with ZCCM and the state, but the way these agreements are being handled by the government will surely make any other large investor in the mining sector think carefully before they put any money into the country.

– BusinessLIVE

10 Comments

  1. Bwalya Davies

    Comment: The move taken by the Zambian Govt to requidate Vendanta from KCM is the right move and it is in the interest of KCM emqloyees and the general public. Vendanta lost direction: (1) Instead of mining copper it shuts down the Nchanga Underground and the Nchanga Open Pit operations. (2) It started scrupmetal dealing and took whatever scrupmetal found in the plant for selling. (3) Was not buying machinery, equipments and spares. (4) It’s owing huge sums of money to suppliers and contractors. (5) It has never employed permanent general workers, all those who were retiring and those fired were not replaced. (6) Was Always comlaining that it is runing on a lose. (6) Most of the good ensentives which the general workers were enjoying was taken a way in the name of saving the costs. (7) Chingola, Chililabombwe, Nampundwe these towns became gost towns.The list is endless, all in all Vendanta is a company of crooks. Let us not politicise anything but let us call spaid a spaid. SA be carefull with Vendanta.

  2. bob

    At times you are better with wealth in raw form. Look at Congo

  3. nature

    Tatwishibe icishinka ukwafuma amaproblem nga nikuli bavedanta nangu nikubuteko pantu imyaka yafula 15 and the government is just there watching vedanta depriving zambians. Let us wait and see.

    • Anon

      Ba Mwenye balitusula sana. Elyo abatutu nga ba journalist aba nshaishiba ifipita mu mano yabo. Ba Vedanta baiba pafula. When shall we arise and take charge of our own destiny, lives, assets etc? Mr Lungu is right.

  4. puzzled

    i hope the move taken wil benefit zambians failure 2 that kuchula fye

  5. Manu

    If you can’t see the problem then you a problem yourself. Vedanta is a huge problem. Why do you like to see other people suffer, Kcm workers have suffered enough, the government is 100% right.

  6. Anon

    Mr Chris Phiri, please don’t try to confuse us with your warped opinion on this matter. We are not as ignorant and dull as you think. Political allegiance aside, I wish to state that the Zambian government is right on this matter. Please, Mr Phiri, don’t insult our intelligence like Argarwal has done.

  7. Rodgers Chembe

    On this one the government of Zambia under the leadership of His Excellency president Edgar Chagwa Lungu is right on point sending Vendetta packing because vendetta is failed project,people criticising the take over of kcm are not patriotic Zambians.

  8. Jaijai

    (1)If I sign a contract with the government, after some time maybe four to five years after enjoying the tax rebert I claim that all along I have been operating on loss,then the question is why can’t I leave instead of holding on to the business that is not making any profit? ( 2) I agree with the government that when I take over the business I will inject e.g $500billion in capital then I only put in e.g $100billion, isn’t that breach of contract? The list is endless to numerous to mention. My brother works for KCM and his family is far worst than it was before Vedanta came in.

  9. Musonda

    It’s easy when you are enjoying while your neighbour’s house is hunger stricken. You can say anything, but if it’s you,you would be mouth less
    Let peoples concerns be heard by the government.

Comments are closed.