Zambia: Government to strip Vedanta subsidiary Konkola Copper Mines of mining license over alleged license breaches

Author: Chris Mfula, Reuters, Published on: 20 May 2019

"Zambia seeks 'divorce' from Vedanta over alleged mining breaches", 20 May 2019.

Zambia plans to strip Vedanta-controlled Konkola Copper Mines (KCM) of its mining license and bring a new investor into the operation...Zambian President Edgar Lungu announced the plan on Monday, which his spokesman said followed a number of breaches of the terms of the license, without giving details. Zambia...has also proposed tax changes that Lungu says he will push through, despite opposition from international miners which say they will deter investment...Some miners have already reduced or threatened to cut output, although First Quantum said it had abandoned plans to lay off workers. Union leaders on Monday called on Glencore to reverse its decision to close two shafts...The plan mirrors moves in other parts of Africa, where countries are trying to secure greater benefits from natural resources being managed by foreign companies. 

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...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. Presidential spokesman Amos Chanda told Reuters a notice had been issued to KCM in April last year over a number of breaches of the terms of its license and it had not convinced the government it should keep the license...Demonstrators marched in Chingola in Zambia’s copper belt to welcome the decision to bring in another investor. Mine Workers’ Union of Zambia (MUZ) President Joseph Chewe called on the president to bring in “a credible investor, not Chinese”, with public opinion turning against China’s extensive asset ownership in the country...

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Related companies: First Quantum Minerals Glencore Konkola Copper Mines (joint venture Vedanta Resources, Zambia Copper Investments & ZCCM Investments) Vedanta Resources