Mines Minister Christopher Yaluma says Government will not nationalize Konkola Copper Mines (KCM) in view of recent revelations by Vedanta Resources Chairman Anil Argawal that the mine has been giving him profit exceeding $500 million per year.
Mr. Yaluma has however warned investors in the Mining Sector that government will not hesitate to take necessary action against any fraudulent activity to prevent loss of much needed government revenue and save jobs.
Speaking during a media briefing in Lusaka today, Mr. Yaluma says as at 30th September 2013, KCM’s total liabilities of one point five billion US Dollars (USD1.5 billion) exceeded the current assets by US $123 million, and that consequently KCM was unable to meet its obligations as they fall due.
Mr. Yaluma has revealed that Vedanta Resources Plc has up to date not complied with its commitment to inject three hundred and ninety seven million US dollars (USD 397 million) into KCM as foreign direct investment.
Mr. Yaluma states that from the time Vedanta Resources acquired KCM, two point eight billion dollars made up of internally generated funds by KCM, bank loans and finance leases, was injected in capital projects which included the Konkola Deep Mining Project (KDMP), concentrator expansion at Konkola mine, the new concentrator and smelter at Nchanga mine.
He says when taking over KCM, Vedanta Resources committed itself to provide a bank guarantee of four hundred million dollars towards the outstanding loans that KCM had on its books.
Mr Yaluma states that government will ensure that KCM meets its obligation of recapitalizing the mine, paying off its debts to lenders, suppliers and contractors including concentrate suppliers.
And Mr Yaluma says the issues that the Vedanta Chairman alluded to in the publicized video especially those touching on the company’s revenue and its profitability will require investigation by the government.
Mr. Yaluma says government will ensure that at the end of the day, the people of Zambia get a fair share of the returns from their mineral wealth.
He has assured investors in the mining industry that government regards them as partners and as such government will endeavor to dialogue to resolve any arising issues.