Vedanta Resources is currently protesting the liquidation of Konkola Copper Mines (KCM) operations in Zambia. This is following ZCCM Investments Holdings’ move of obtaining a court order from the High Court of Zambia. The order was to close up the mining company and appoint a provisional liquidator. ZCCM, a state-owned entity, has 20.1% shareholding in KCM.
On Friday, the court appointed Milingo Lungu as provisional liquidator. As such, he is now in charge of day to day running of the company. Lungu has since asserted that business will continue as usual.
Vedanta chief executive Srinivasan Venkatakrishnan said the company was concerned about what the appointment of a provisional liquidator meant for the people in Zambia, their communities and the future of the business.
Vedanta said the ZCCM’s move to petition or the winding up of KCM was more on the basis of fairness and equity as opposed to having grounds of insolvency. This was therefore seen to be a misuse of Zambia’s corporate law given that the parties had agreed a specific dispute procedure in the shareholders’ agreement.
The firm’s CEO Venkatakrishnan, while acknowledging that Vedanta intends to fully defend its legal rights, he insisted that the mining firm remains open to dialogue. He further expressed his hope to meet with the Zambian government in the near future to discuss a mutually agreeable solution to the current situation as well as the broader challenges faced by KCM.
Mr. Venkatakrishnan insisted that the sooner the matter is resolved the sooner KCM can go back to having a sustainable footing. Vendata, which also has mining operations in Australia and India, has invested US $3Bn in Zambia since 2004.