In a significant development for Zambia’s mining industry, Hon. Paul Kabuswe, the Minister of Mines and Minerals Development, announced on September 5, 2023, that Vedanta Resources will be reinstated to run Konkola Copper Mines (KCM).
This announcement marks a pivotal moment in Zambia’s economic revival under the New Dawn government’s leadership, signaling the country’s commitment to sustainable growth and a thriving mining sector.
The government aims to place the well-being of the Zambian people at the heart of its initiatives, transforming their livelihoods for the better.
Resolving the KCM Impasse
The long-standing impasse between ZCCM Investments Holdings and Vedanta Resources, which began in May 2019, has finally found resolution.
The government, determined to prevent the liquidation of KCM, deemed this action illegal and inconsistent with the shareholders’ agreement, which stipulates a dispute resolution process through arbitration.
Following extensive consultations with various stakeholders, including labor unions, the government has successfully negotiated an agreement with Vedanta. Vedanta Resources will return as the majority shareholder of KCM alongside ZCCM-IH, effectively reinstating the KCM board.
The agreement between the parties outlines several crucial commitments:
1.Renewed Investment: Vedanta Resources commits to financing mine development and increasing production.
2.Employee Welfare: An increase in employees’ salaries and a one-off payment will be implemented.
3.Environmental and Social Responsibility: Vedanta will invest in robust and transparent environmental, social, and governance (ESG) programs.
4.Debt Settlement: A plan for settling outstanding creditor debts will be enacted.
Additionally, the government’s golden share has been reinstated to safeguard the asset and ensure its protection. Legal formalities and procedures are also underway to withdraw all current disputes against each party.
Over the years, KCM has faced deterioration, resulting in a substantial reduction in production. The New Dawn government envisions a bold future, aiming to realize three million metric tonnes of annual copper production within the next decade. Reintroducing Vedanta Resources is expected to play a pivotal role in achieving this ambitious target.
Hon. Kabuswe emphasized that the government is keen on laying the foundation for faster, private sector-led growth by improving the investment climate.
While ensuring fair treatment for investors, the government remains committed to safeguarding the nation’s interests and building confidence among potential investors eyeing Zambia’s opportunities.
The minister further stated that the government acknowledges Vedanta’s commitments and urges the company to fulfill them for the betterment of Zambia and its mining industry.
The resuscitation of KCM is essential, given the asset’s dire state in recent years. Vedanta’s partnership with local stakeholders is expected to enhance the sustainability of investment and contribute significantly to Zambia’s economic resurgence.
The reinstatement of Vedanta Resources at KCM signifies a bright new chapter for Zambia’s mining industry and its journey toward economic prosperity
SOURCE:copperbeltkatangamining.com
