President Edgar Lungu of Zambia announced yesterday through Zambia National Broadcasting Corporation radio, his plans to nationalise Vedanta-controlled Konkola Copper Mines (KCM).According to President’s office the decision was taken on the basis of several breaches of the terms of KCM’s mining license. According to official sources, default notice had been issued to KCM in April last year for a number of breaches. “We are not shaken in our resolve to divorce (from some companies), starting with KCM, and we have filed that notification,” he said. Additionally, Zambia has also proposed tax changes that Lungu is determined to push through, despite opposition from international miners. The announcement has disturbed the investors who warn that such a decision will deter investors from Zambia, Africa’s second-biggest copper producer.
London-listed Vedanta Resources is owned by Anil Agarwal. It owns 79.4 percent share of KCM while 20.6 percent is owned by state-controlled Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH). The spokesperson of Vedanta Resources said it has not received formal communication from the government and has sought an urgent meeting with Lungu over the future of KCM. The major grievance raised by Zambia is that the international mining companies that have invested in Zambia’s mining companies of not paying enough tax which has compelled the Zambian government to make tough changes to its mining code. Other than Vedanta, Swiss miner and commodity trader Glencore also has operations in the country. Last week, Glencore announced plans to close two shafts at its Mopani Copper Mines unit in Zambia, which earned the wrath of President Lungu. “We are not shaken in our resolve to divorce (from some companies) starting with KCM, and we have filed that notification,” he said
