Vedanta's Zambian "liquidation" supported by minority shareholders
Published by MAC on 2019-06-19Source: Zambian Mining
But criticisms remain
Threatened with UK prosecution for it's hapless, allegedly criminal, Zambian copper venture, Vedanta has come under criticism for having been told to "liquidate" by the central African government [For earlier article, see: Zambia moves on Glencore, Vedanta].
Minority shareholders in KCM, grouped under ZCCM-IH, have said the government allowed Vedanta to quit "in haste without preparation and anticipation".
They back their argument with evidence that the Indian miner has - as many people, including those behind the London judicial case, agree - falsely claimed it made no profit from its operations in the country.
The shareholders are still backing the government's basic decision.
Vedanta’s licence scrapping was quickened – Minority shareholders
Evans Mumba
Zambian Mining
13 June 2019
The Zambia Consolidated Copper Mines-Investment Holding (ZCCM-IH) minority
shareholders aired out that the step to cancel Vedanta Resources mining
license was conducted in a hurry as the latter currently has no capacity
to run the mines.
In accordance to a statement availed to the media, Thierry Charles who
spoke on behalf of the Euronext Minority Shareholders of ZCCM-IH made
mention that though behind government’s decision to liquidate Konkola
Copper Mine(KCM), the decision to revoke Vedanta’s license seems to have
been taken in haste without preparation and anticipation.
“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 it’s 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 said.
“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,” said Charles.
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 dated 12 September, 2018,” Charles
said.
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,” Charles
said..
Charles further stated that unconfirmed reports suggest that FQM has
proposed to buy back 20 per cent Kansanshi shares for $700 million.