Arbitration hearing set for January in Vedanta-Zambia dispute

PUBLISHED: Thu, 02 Jun 2022 09:22:54 GMT
Chris Mfula
Signage for Vedanta Resources Ltd. is displayed at the company’s office building in Mumbai, India, on Thursday, March 6, 2020. The worlds most expansive lockdown to contain the coronavirus could slow the pace of distressed dealmaking in India, according to Vedanta Head of Mergers and Acquisitions Aarti Raghavan. Photographer: Kanishka Sonthalia/Bloomberg via Getty Images

LUSAKA, June 1 (Reuters) – Zambia’s decision three years ago to take control of a copper mine in the country’s north will be subject to an arbitration hearing in January in London, the country’s mines minister said on Wednesday, amid a lengthy dispute over the mine’s ownership.

Zambia in May 2019 handed control of Konkola Copper Mines (KCM) to a state-appointed provisional liquidator, triggering a legal battle with its previous owner, India-listed Vedanta VDAN.NS, with arguments heard in Zambia and South Africa and the dispute going to international arbitration.

Zambia’s government accused Vedanta at the time of failing to honour licence conditions, including promised investment – which Vedanta has denied.

Mines Minister Paul Kabuswe said the referral to arbitration came after legal rulings.

“Following the Court of Appeal’s decision to stay proceedings and refer the matter back to arbitration – a decision supported by the Supreme Court – a hearing is now set for 9th January 2023,” Kabuswe said in a statement.

Read more: Zambian President thanks China for help in debt restructuring

“In the interim, efforts are continuing to find a solution that unlocks KCM’s potential and delivers maximum benefit to the people of Zambia.”

Kabuswe again denied speculation that the government plans to give KCM back to Vedanta, saying Vedanta had “sacrificed” its licence to operate in the country. The company has offered to invest up to $1.5 billion in KCM if it resumes control of the mine. Read full story

“We have always stated that we [want to] amicably resolve the issues surrounding KCM without delay as a way of revitalizing the country’s economy,” a Vedanta spokesperson said in a statement, adding that the investment Vedanta has promised could help Zambia reach its goal of producing 3 million tonnes of copper a year in the next decade.

Kabuswe also commented on Mopani Copper Mines, another major mining operation for which the government is seeking a new investor. He said “market-based capital raising solutions should be implemented at Mopani, rather than relying directly or indirectly on the limited public finances”.

Reuters reported on Tuesday that previous owner Glencore was helping Mopani Copper Mines make ends meet, including through letters of credit, according to sources. Read full story

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.