Zambia: Largest copper mine dodges liquidation
Zambia’s largest copper mine has dodged liquidation and received a cash injection of $1 billion from its parent company, ending a years long legal battle.
London-listed Vedanta is the majority owner of Zambia’s largest copper mining firm Konkola Copper Mines (KCM), which has been at the centre of a standoff with government.
The state-owned ZCCM-IH is a minority shareholder in KCM.
In 2019, the Zambian government placed KCM in liquidation proceedings after accusing KCM of violating its operational licence and not paying all its taxes, sparking a four-year legal battle with Vedanta.
KCM’s liquidation process has now been halted and Vedanta would continue to run the mines as the majority shareholder with 79.4 percent stake, the government said Tuesday (Sep. 05).
“The KCM board will be reinstated and Vedanta Resources Limited will return to its previous role as the majority shareholders,” the country’s mining minister told a press conference in Lusaka.
The firm will enjoy “a renewed financing commitment towards investment in mine development and to increase production,” mining minister Paul Kabuswe said.
Zambia is Africa’s second biggest copper-producing country on the continent after the Democratic Republic of Congo, and the sector is a major employer.
London-based mining Vedanta has said it will invest into developing KCM over the next five years.
Vedanta also pledged to invest $20 million into the local mining community annually.
In 2015, some 2,500 villagers filed a claim in London against KCM for alleged toxic pollution caused by water discharged from its unit Nchanga Copper Mine, situated in Zambia’s central Copperbelt region.
The mining firm agreed to settle the claims in 2021. The terms of the deal were not disclosed.
The Zambian government which grapples with a huge debt aims a annual production of 3 million tons of copper within the next 10 years.