By Siphiwe Zulu
When the PF-led Zambian government grabbed Konkola Copper Mines (KCM) from Vedanta Resources in 2019, Vedanta cried everywhere in hell and heaven, traversed every blade of grass on earth and visited every available court to ensure they got back their asset.
Theirs was a cry for justice, and rightly so because however justified Zambia’s government felt, the manner in which it took its action couldn’t pass the legal standard. Hence, KCM remained a Vedanta asset.
The Patriotic Front (PF) acted illegally and irrationally when, on the grounds that KCM under Vedanta violated its operating license, among other sins, it proceeded to place the Chingola-based mine under provisional liquidation.
So clean were the tears Vedanta cried that they wiped out all their misdemeanors and felonies – including a court settlement they reached with over 2,500 villagers who sued the company in 2015 over toxic discharge from Nchanga that poisoned the water sources and destroyed farmland.
Then came the promises from Vedanta to whip people’s emotions in their favour – $1 billion investment in KCM development, $250 million payment to all local creditors, $20 million investment into the local community (CSR), a 20% increase in salaries for employees and a one-off K2,500 payment to all employees.
Yet one year down the line, nothing of this seems to be happening; neither does the immediate future of the company look promising.
Infact, Vedanta Base Metals CEO, Chris Griffith, says the company is now talking to a range of financing partners to raise money for a restart of KCM, including selling a minority stake in the unit!
Interesting that Vedanta are now considering selling some equity in KCM which they previously refused.
Stories have been told of senior people, even among their local representatives, having previously bragged about putting a hefty price tag on the mine to dissuade would-be buyers. Other stories alluded to direct fending off of any interest by threatening legal action. But it now appears like reality has hit!
Which beggars the questions: why did Vedanta want their mine so badly that, not for the first time, they promised honey to Zambians yet they don’t have a honeycomb? How can they be trusted to do right by KCM and Zambia? Should the government return to exploring whatever legal avenues may be available to it to retake the mine and find a new investor?
How did they make the promises they agreed with the government for their return when they knew they lacked the financial muscle to see the promises through?
This is clearly vintage Vedanta – over promise and under deliver!
Even if they found the money, this has all the vibes of being a repeat of the same cycle they put the country through before – trying to make their money from the asset without investing anything so that the proceeds from KCM start funding them. That is why it is so hard to trust them.
Part of the reason the economy is underperforming is because two of our largest mines have been operating below par for years, KCM being the worst and longest.
They should have agreed to be bought out or to sell because this proposal was made to them by the Zambian government. Alas, instead they arm-twisted the government by using the law.
The price Zambia is paying for this KCM mess is dear. In there, are lessons to do better next time.
Vedanta could have left the story a long time ago had the PF gone about getting them out correctly.
Kalemba February 10, 2023