LUSAKA, Nov 26 (Reuters) – Zambia’s state mining arm ZCCM-IH plans to appeal a court ruling in favour of Vedanta , which has sought arbitration in a dispute over its jointly owned copper mine that is facing liquidation, the mining minister said.

India-based Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when Lusaka appointed a liquidator for the mine.

“ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Mining Minister Richard Musukwa told parliament on Thursday.

Last week, a Zambian court ordered a halt to liquidation proceedings for Konkola Copper Mines (KCM) to allow Vedanta and ZCCM-IH, which owns 20% of the operation, to proceed to arbitration.

Potential buyers of KCM were awaiting a resolution to the dispute, Musukwa said, adding that steps taken by the government should not be “considered as nationalism”.

“It is still the government’s wish to find a new equity investor with technical and financial capacity to recapitalise the mine and operate it effectively,” he said.

Vedanta was not immediately available for comment. (Reporting by Chris Mfula; Writing by Zandi Shabalala; Editing by Edmund Blair)

Source: Reuters 

Zambia’s Court of Appeal has ruled that Vedanta can proceed to arbitration with state mining firm ZCCM, in a dispute over the Indian mining major’s copper assets in the central south African nation.

Vedanta’s 79.4% owned Konkola Copper Mines (KCM) in Zambia were seized and ordered to be liqudated in May 2019 over alleged mismanagement.
The assets at the heart of dispute are KCM’s Nchanga copper smelter, the largest in Zambia, and the Konkola and Nchanga mines.

The Indian mining giant has invested more than $3 billion in the asset since acquiring it from Anglo American in 2004, according to Vedanta’s website. The remaining stake is held by ZCCM.
KCM’s provisional liquidator, Zambian lawyer Milingo Lungo, said the latest court ruling, in Ndola on November 20, will let the parties proceed to arbitration to settle the dispute.
During the arbitration process, Lungo will remain in control of KCM operations as mandated by the Zambian High Court in May 2019.

In November 2019, Lungo told Fastmarkets that the best option was to increase the value of the disputed KCM assets and ready them for a new owner.
But the latest ruling comes at a time when Covid-19 uncertanties are making it more difficult for major miners and smelters around the world to attract investors to buy assets or to help with developmental and operational costs.

The Zambian government previously approached different parties, including China Non-Ferrous Metal Mining Group (CNMC) over sale of KCM’s operations. However, legal risks, existing debts and operational issues have made KCM sale difficult.

When the Zambian government originally filed the liquidation order in May 2019, it sent shockwaves through the Zambian copper industry.

Liquidator Lungu said Vedanta’s deferral of a service fee payment to contractors and staff had led to output disruptions and that had prompted the government to step in at Nchanga and Konkola.
Since the liquidation order, Vedanta has been actively defending its rights under international law to proceed into arbitration with the Zambian state mining firm.

Zambia is the second-largest copper producing country in Africa and its copper exports are a major source of foreign income. One of its biggest export category is intermediate copper products – blister copper and anodes.

Fastmarkets’ spot refining charge (RC) for 98-99% blister copper on a cif China basis, stood ta $150-160 per tonne at the end of last month.
Julian Luk

Source: Zambia Watchdog

MINING Minister Richard Musukwa says the activities of KCM’s interim liquidator, Milingo Lungu, within the mining company are in accordance with and comply with the provisions of the law.

And Musukwa reiterated that a number of investors are aligned and interested in partnering with ZCCM-IH to exploit KCM once the ongoing arbitration processes have been exhausted.

Musukwa told parliament on Tuesday when he responded to a written question from Nchanga PF MP Chilombo Chali, who wanted to know the status of KCM’s interim liquidation process from July 2020; whether there has been an arbitration process between Vedanta Resources and ZCCM-IH in South Africa, and what effect the outcome of the arbitration process would have on the liquidation process in Zambian courts.

“The government will present a full statement on the liquidation of KCM at an appropriate time [and] at the instance of the President (Dr Patrick Matibini). So far, in August 2019, Vedanta appealed the High Court’s decision to dismiss the request to stay the liquidation proceedings and to refer the case to arbitration. As a result, the proceedings were stayed, pending the decision of the appeal. ZCCM-IH Investment Holdings also appealed the court’s decision to stay the proceedings. In August 2020, the said appeal was heard and we are awaiting the decisions of the court of appeal. The arbitration process between Vedanta Resources and ZCCM-IH began in July 2019 and is still ongoing in South African courts. The parties have agreed on the sole arbitrator to hear and determine the procedure. The outcome of this case is up to the court and therefore we are unable to indicate the effects, if any, until the courts make a decision. Since the liquidation process is a court case, only the court can determine the dates on which it will be concluded, ”Musukwa replied.

Asked by Monze Central UPND MP Jack Mwiimbu about what Milingo was doing at KCM if he did not sell the assets to pay off the debt, Musukwa argued that he was acting within the law.

“What the current liquidator at KCM is doing is in accordance with the law. As you know, the liquidation follows the example of the minority shareholder, who expressed doubts about how the large shareholder treated and ran the company. So, at present, what is happening is that while waiting for these legal proceedings to be accelerated and completed, KCM’s operations are continuing and the liquidator is managing by repaying his debts, both to suppliers and to suppliers. current entrepreneurs, and the operation is supported, ”Musukwa replied.

And Serenje MP MMD Maxwell Kabanda asked Musukwa what exit strategy he had in place to compensate KCM workers who may be affected in the event the court rules against the government.

But in his response, Musukwa said the government remains confident it has a strong case against Vedanta.

“Mr. President, we started the liquidation process because we were very confident that we had a solid case against Vedanta. And we were very confident that, in accordance with the rules of natural justice, the Zambian people and the workers of Nchanga, Konkola, Nampundwe and Kitwe have a better case in this regard. And in the event that this matter is not in their favor, the Government of the Republic of Zambia reserves the rights in terms of the appeal process using the judicial process because, as you know, we are a government of laws and we will make sure that we fight this process anchored in the force of law. And we are convinced that we have a better case to be successful in court, ”he replied.

Meanwhile, Musukwa reiterated that a number of investors were lining up and interested in partnering with ZCCM-IH to exploit KCM.

“We are optimistic, as a government, that we will win this case. And once this matter is settled quickly, we will make sure to address the issues relating to the welfare of the workers. His Excellency the President of the Republic of Zambia has guided that one of our priorities is to ensure that we ensure the well-being of workers and that we serve in this process. We have a number of investors who are aligned and interested in partnering with ZCCM-IH and managing and operating this mine. The government is not in the business of managing the mine. We would like to focus on the po orientation

ZANIS—Konkola Copper Mines (KCM) has set aside K1.2 million for stocking all consumables and supplies that will be used in the fight against coronavirus at Nchanga South Clinic which the mining company has surrendered to government as a quarantine centre for suspected case of the deadly virus.

KCM acting General Manager Corporate Affairs Shapi Shachinda said the mining firm has decided to offer the facility to government during this period until the COVID 19 cases are over.

Mr. Shachinda told ZANIS that the funds released will be used to ensure that the facility has all the supplies needed.

He said the facility, which was an outpatient department for the mining firm, will be used as a quarantine centre for COVID 19 suspected cases in a bid to fight the pandemic.

He explained that additionally, KCM has also put up activities to sensitise workers on precautionary measures to combat the further spread of the coronavirus.

And Chingola District Commissioner Agnes Tonga, who toured the facility, has thanked KCM for supplementing government’s efforts in fighting COVID 19.

Ms. Tonga added that if all stakeholders could emulate KCM by partnering with government, the deadly disease can be contained.

Source: ZNBC