Why Zambia is seeking a new investor in Vedanta-controlled copper miner

PUBLISHED: Mon, 20 May 2019 17:15:06 GMT
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LUSAKA, May 20 (Reuters) – Zambia has started to look for a new investor in Vedanta-controlled Konkola Copper Mines (KCM), President Edgar Lungu said on Monday, in a move likely to stoke international miners’ concerns about rising government intervention in the sector.

Zambia, Africa’s second-biggest copper producer, has also proposed tax changes that Lungu insists he will push through, despite opposition from international miners who say they will deter investment that Zambia desperately needs.

“We are not shaken in our resolve to divorce (from some companies), starting with KCM, and we have filed that notification,” Lungu said on Zambia National Broadcasting Corporation radio, adding he would brief the cabinet on the decision later on Monday.

The decision follows a number of breaches of the terms of KCM’s mining licence, presidential spokesman Amos Chanda told Reuters.

“The government is planning to revoke KCM’s mining licence because of the breaches,” Chanda said.

London-listed Vedanta said it was seeking an urgent meeting with Lungu over the future of KCM and that it had not received formal communication from the government on KCM.

It said in a statement it was the intention of KCM and Vedanta, its primary shareholder, to continue to engage with the government “in a constructive and transparent manner”.

The government, which also has a stake in KCM through a state mining company, “(is) fully apprised of and party to the circumstances of the company and major decisions that have been taken,” Vedanta added.

Chanda said a default notice had been issued to KCM in April last year for a number of breaches and that it had not convinced the government that it should keep its licence.

He also said “about three investors” whom he could not name were interested in the asset, but no negotiations had begun.

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