Vedanta Resources Plc has revealed that the Konkola Copper Mines has not made any profit since 2004 when it was acquired by the Indian mining giant.
Vedanta Resources Plc Chief Executive Officer Tom Albanese said KCM has been loss making forcing the parent company to keep injecting funds to keep the mine afloat.
Mr Albanese stated that Vedanta Resources Plc has so far invested US$ 3 billion which has extended the mine life of Nchanga and enabled the development of its flagship Konkola Deep Mine project.
He was speaking last evening when he featured on ZNBC TV’s Sunday Interview.
Mr Albanese who is also the Board Chairman for KCM said Vedanta Resources Plc is committed to its investment in KCM and sustaining the mining activities on the Copperbelt.
He also dismissed reports that Vedanta Resources Plc has been using funds generated from KCM to develop other mines in other countries.
Mr Albanese stated that Vedanta Resources Plc has infact exceeded its pledged investment threshold of US$ 450 million by pumping in US$ 3 billion in KCM operations.
He said the key target now to reduce the operating costs for KCM as it hopes for an improvement in the copper prices.
Mr Albanese said KCM also wants to improve its communication with key stakeholders such as the government, the media and civil society including local communities.
If only liars go to hell, I don’t know how many of us would burn for telling blue lies!! The CEO must sober up and issue a better statement. His boss told the whole world how he has milked the country to blood levels!!
Government has to rejig its programs and tax regimes concernng these mining firms. Its time Zambian CEOs starting heading these institutions. I can ebulliently say that in few years to come will change the outlook as young a generation I just hope will still have those minerals.
These thieves. They sell copper to sister companies situated in tax havens like swizaland at a loss and declare a loss in Zambia meanwhile the sister companies sell to China at London metal exchange rates and make profit. Foolish people are us zambians who always think that a foreigner will develop zambia. Every human been has a heart towards his birth country. You think a china man or muzungu will just come and give you nice roads and nice hospitals leaving his country in ruins. Mubepelefye bakolwe.
These thieves. They sell copper to sister companies situated in tax havens like swizaland at a loss and declare a loss in Zambia meanwhile the sister companies sell to China at London metal exchange rates and make profit. Foolish people are us zambians who always think that a foreigner will develop zambia. Every human been has a heart towards his birth country. You think a china man or muzungu will just come and give you nice roads and nice hospitals leaving his country in ruins. Mubepelefye bakolwe imwe
These thieves. They sell copper to sister companies situated in tax havens like swizaland at a loss and declare a loss in Zambia meanwhile the sister companies sell to China at London metal exchange rates and make profit. Foolish people are us zambians who always think that a foreigner will develop zambia. Every human been has a heart towards his birth country. You think a china man or muzungu will just come and give you nice roads and nice hospitals leaving his country in ruins. Mubepelefye bakolwe
All mines hide profits, with KCM leading the way. Only first Quantum tries to report correct figures from the way they have been declaring tax on profits
As long as they pay PF for its political activities, they can continue to hide profits for as long they want.
They are undermining PF with impunity because they know that, PF is rogue government run by rogue thieving politicians.
Had the Zambian economy been in capable hands, these firms would abide by what the government wants because they would know that many investors are lining up to invest in the country. Unlike right now, FDI is dry, and these foreign companies are using this situation as a bargaining chip to have it their way.
During Mwanawasa, they had no choice but pay windfall tax because FDI was high and many investors were lining up to jump at any slight opportunity to invest in those mines.
PF is weak and fibble!
This guy thinks we are fools and he is really taking us for granted. How can he even come out and make such a statement. There is no investor that invest such an amount of money and stay in the same business for as long as they have. This is the kind investors Zambia must looking to replace and please NO CHINESE they are even worse. We can try our very own Zambian communities or even the Japanese but people that are genuine. We also need strict rules around foreign investors that will be beneficial to Zambia.
And he expects us and the whole world to believe such trash?
Kindly tell us a lie that’s close to the truth.
we mbwa we
I am left to wonder if at all people on this topic are making comments based on the interview or the wrong article posted by Lusaka Times. I listened to the interview and the question to profits by Franklin Tembo Jr. was: Are you making profit right now? Albenese said “No!.” “the business is in negative cash flow.” So I am wondering where this matter about KCM not having made a profit since Vedanta came is coming from because I think last year the company said it made both profits and losses in the last 10 years. I just hope people can think through their contributions before making statements. Remember that Anglo, which is run by perhaps the most respected individuals abandoned this mine in 2002, for those that just completed their grade 12.
chase these blood suckers!!!! umusungu temunobe. thes bu.ggers cant not stay in one place for years if they are not making a profit. cheat the zambian government, noti ifwe. we know you white devils well!!!
so why are they here if they are not making profits., why did they keep on investing if there were no profits to be realised? It simply shows that they dont know how to run businesses so let them go elsewhere we dont want failures in zambia.
Pants on fire!!!!!!
Are they some kind of Charity these *****s?
Shut up ! we know your intentions and they are not sublime at all but to make Africa-Zambia poorer.
What profit are you talking about?
Boza, Buhata, Bufi!
The other year Anil the owner of KCM was boasting of making $500million in profits from a $25 million he bought the mine.
Vendetta should face reality especially with the skeletal remains of statistics for their operations.
Bufi!
Economy and Kwacha, infintu fyaa Lungu~la.
The Skeleton Key
~206~
These pipo must think we are stupid. Which business keeps pumping money into a venture for over 10 years if they are not making a profit?
Kwena bafiKa** aba ba bufi, elo ni ba Kolwe Sana!!!
Why are they lying to mother Zambia, why continue if they were not making profits.
Regards
Elias
….KCM management is really taking Zambians for a ride….who do they think we are..??…a bunch of f00ls…or what…??…trying to erase the painful deep permanent scar inflicted by Agarwal….??….no amount of sweet talk and image building shall erase that…..
……10 years no profit but still operating…..??…where in co-operate world…??…nonsense..
Mr Tom Albanese work on your fixed cost The contribution margin is positive on fixed cost
Your revenue are good from between 1,743 USD millions
Your EBITDA AVERAGING 250 USD MILLIONS WITH GROWTH OF ABOUT 40%
WORK ON YOUR FIXED COSTS AND IF YOU INVESTED THEN THE QUALITY OF THOSE ASSETS YOU INVESTED SHOULD SHOW ON THE FINANCIALS IN THE QUALITY OF EARNINGS
Check the restructuring costs and isolate to see the volume profit analysis and see the EBITDA and restate the loss in 89 million USD to see the future options
Its quiet viable KCM this one with 3 billion dollars invested, the quality of those earnings in assets must be seen truly.
The talk show was also quiet assuring and helpful for KCM and Tom
Good questioning from ZNBC also
its all Greek sir, pleae simplify
Where is the Stupid indian who was Boasting about how much monies they are making from Zambia out of nothing?
This is Chikwanda at play…Is this why Mwanakatwe said that we defer payment for these mines until such a time when they start making profits?
This is very bad for Zambia…The other burger by the name of Anil was mocking Zambia that they were given a red carpet and that they lied that the other entourage has remained in RSA when ifact not.
This CEO is very stupid. I Zambia should nationalize this mine.
This is Chikwanda at play…Is this why Mwanakatwe said that we defer payment for these mines until such a time when they start making profits?
This is very bad for Zambia…The other burger by the name of Anil was mocking Zambia that they were given a red carpet and that they lied that the other entourage has remained in RSA when infact not.
This CEO is very stupid. I Zambia should nationalize this mine.
That is funny. You invest $3bn, that is good, but then I can assure you that you have sold over $10bn of copper so whatever happens between your sales and your profit or loss is non of Zambia’s business.
Mahtani has taught these guys how to sell the copper at minimum prices to their own subsidiary in Switzerland so that they pay no tax in Zambia.
Then they sell it at world market price to China and keep the difference in Swiss banks where they pay negligible tax.
We must challenge this Tom Albanese to allow an independent AUDIT of sales of copper and then we will see where the money has gone.
When I formed British south Africa (BSA) and built the rail line from Cape Town in the 1800s , you think I was joking….. ?
Definition of profit depends on what is allowable as costs. If capital costs in machinery, technology and developments are treated as operting expenses and recoverable in the year of investment then indeed no profits may have been made. But if KCM cannot make profits at an average price of US$6 per kg, then the operator is incompetent or extremely inefficient or both. I would advise both the host, Zambia, and the investor, Vedanta Resources, to part company expeditiously for the good health of both!
In ZCCM we used to make modest profits at prices of less than $ 2 per kg. for over 20 years. Yes, we were more competent, efficient and nationalistic!
And the blame game continues. We, the people of Zambia, have ourselves to blame. You see how corruption works? These people are able to corrupt top 3 people in the country and can get away with murder. Where is patriotism from Chamber of mines?
Seems all the foolish white men are in Zambia. How does he think we can all be hoodwinked by him? Indians are known to be so mean with their money so why would they be injecting money without reaping the profits?
Neocolonialism at work
1) It will never be in their financial interest to declare profits.
Therefore, their fiduciary obligation to their shareholders alone determines that they will never declare profits voluntarily.
2) As long as the mines are in foreign hands, they will corrupt national and local politicians, and of course the Chamber of the Mines is just that – they represent the interests of the current mine owners.
3) The only alternative is nationalization
It may be imperfect, but it is the only way to stop Zambia fromlosing billions, if not tens of billions of dollars per year in copper, cobalt, and other precious metals.
Paraphrasing JFK: “He who makes the Windfall Tax impossible, makes Nationalization inevitable”.
Nationalization is the only stick we have to beat them with.
@ MrK. One of the best contributions. My question is are the exit barriers so high that they continue pumping in resources with no positive returns?
These chaps are talking porkies!
#letstakebackourmines
Fugget about the fact that his name is Tom Albanese, or that he is from New Jersey, like The Sopranos.
Tom Albanese is a Rio Tinto guy. Rio Tinto, at one time the world’s biggest copper mine, was bought from the Spanish government in 1873, by the Rothschild Bank under Baron Lionel de Rothschild. (See the history section at rothschild dot info, the official family website.)
In 1887, Rothschild Bank created De Beers, the world’s biggest diamond miner. (Google: de beers history rothschild) That was under Nathaniel Mayer, the 1st Baron Rothschild in the British peerage, and tellingly, sponsor of Cecil Rhodes. In fact Cecil Rhodes became the Founding Chairman of De Beers in 1888. (See the history section at debeersgroup dot com)
Therefore these are colonisers and pillagers of AZfrican wealthy. Never listn to the non-profit declaration at all!
He must take us for fools! No business can continue operations if they are consistently making losses. This man insults our intelligence…
Took the words right out of my mouth!
Another stupid-Muzungu wopusa-Tom! Just imagine making loses since 2004 & the Mine is still operational-what a failed state Zambia has become! We are alive to the fact that these mines are so corrupt together with the top ZRA & Ministry of Finance & National Planing!In any case,its normal to tell lies under stinking PF & you will be hero worshipped!
It is very sad to note the low levels of understanding coming from most bloggers:
a). Some are calling for nationalization of KCM? Have you forgotten that the former ZCCM was run down with no capital re-investment? Why were all the ZCCM mine privatized if they were making profits? Where is Zambia Airways? Where is UBZ? Were all former employees of ZA and UBZ paid their pension or they are still languishing without any redress.
b). The investment made by Vedanta in KCM is not short term but long term. They are looking at more than 5 years from now when Konkola Deep will start producing copper profitably. These economics cannot be understood by a cheap blogger who only lives for today and lets tomorrow fend for itself.
c). Which government run organization in Zambia has run profitably?…
And there is never a shortage of individuals who will defend the theft of their people’s resources by the foreign mining companies.
” b). The investment made by Vedanta in KCM is not short term but long term. ”
That is not true. Even Anil Agarwal stated that he only ‘invested’ $25 million. ALL the money that has been put into Vedanta is OURS.
Also, they didn’t declare profits 10 years ago, they don’t declare profits today, and they will not be declaring profits 10 years from now.
And don’t you think it is odd that this guy literally has a mob connected name (Albanese, like the Albanese from the Gambino crime family), and that he’s from New Jersey?
Why are you still defending a company after the CEO Agarwal admitted that he is a crook?
It is Zambian to be fooled. All the time. In everything.
C-General, I would not be that categorical in my support of KCM and Vedanta, these guys are more than businessmen…I end there. Yes KCM may be investing for the long term but I can tell you that in making that massive investment KCM is building value for themselves while deliberately making a loss in order to avoid paying corporate tax. That is one of the things which the new mineral royalty tax could address if it had been done properly.
With mineral royalty, KCM are forced to pay something to Government even when they deliberately make losses.
Chief Economist – I agree with you! I was only against the bloggers who are blindly calling for nationalization. FTJ was not foolish when he privatized the mines – he knew (as a former union leader) that Govt doesn’t have the capacity to run businesses.
“…the key target now to reduce the operating costs for KCM…”
That’s the key sentence in this whole story. The CEO could technically be telling the truth; the question is, what do those “operating costs” consist of? What is the breakdown of those costs? Vendanta could be paying it’s own subsidiaries, CEOs, Board Members abroad. Whatever the case, the Government needs to contract out an indendent auditor to do a forensic financial analysis of the so called operating costs.
That’s the language all mines speak. Why do they hang on if they keep on making losses? During most of the period he mentioned, copper had been selling over $8000 per tonne. Let’s just diversify the economy and close these mines.
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There is no loss-making firm that would be going on from 2004. I know very little about economics, but I know very well why a foreign firm will stay put in any location where they are. What disappoints is that these guys think we are still in the 40s and 50s where it was a miracle to see an educated “native”.
Which company from “there” ever invested $3 billion knowing that they will never make profit? Boza.
Victor – When Barrick Gold was buying Lumwana Mine they invested $8Billion as purchase price. But due to no profits they downrated the value of Lumwana mine to only $4Billion. So you see? Barrick lost $4Billion by investing in Lumwana mine. This is the reason why Lumwana was in the forefront planning to close the mine had the mineral royalty tax gone ahead as earlier planned by Govt. In modern business you take chances when investing!!!
Private companies need to present finacial statements to the Boards of Directors of their respective companies. After the presentations, the Board members are duty bound to seek clear explanations on the causes of massive losses of revenue for the companies and for the ZRA. It is quite possible that the CEO is incompetent. In that case, a new CEO would be desirable. The new CEO would be hired to turn the business from loss making to profit making business. If you are still blaming the new tax regime for the loss, then the only conclusion is that your thinking is wrong.
He nauseates me with all his lies!! It is even better if he does not open his mouth than him spewing lies and thinking all Zambians are gullible. Shame on us Zambians that we cannot run our own affairs and “gringos” are busy carting away our God given resources
The state ran the mines when copper prices were $2000 per tonne, which the private companies now claim is an impossible price to make a profit at. Well the state did run it, even at a small loss. And now that copper has been at $10,000 per tonne, the private companies are still claiming they can’t make a profit.
So who is the superior manager of Zambian resources – the Zambian State.
What tribe is this Albanese?
I add my voice: and re-state that KCM CEO must be warned not to inflame the already volatile situation in the mining sector by telling us lies. He maybe overwhelmed with the JOB – trying please his ”mw’enye’ Boss Argawal.
KCM has never paid TAX since takeover in 2002 – but made huge profit the first month they got the MINE fraudulent with the help of WORLD BANK staff in WASHINGTON DC who put pressure on Levy Mwanawasa’s government to sale at paltry US$25million. And Vedanta did not even pay Cash- This is an issue within the CHAMBER OF MINES members. If The CHAMBER OF MINES had a way: KCM would have been expelled for CHEATING government and giving CHAMBER OF MINES a Bad name.
Government should get rid of this liar from Zambia before we beat him!!!
The problem about taxes lies with Zambians. They are divided. Levy came up with windfall taxes and no mine paid a dime. MMD reviewed and something not much was trickling but PF, UPND and Nawakwi criticized MMD. PF took over. All their tax measures have been rejected. Same Nawakwi and UPND are now saying negotiate. Negotiate what when mines do not simply want to pay. They prefer the previous structure where no corporate taxes has been paid by a single mine by 2014. We have members of so called Mines Chambers of Commerce who are actually on the pay roll of the mines. Solution is to close mines and grow cocoa, Coffee, Tobacco, Sugar and wheat. These crops will give us more than from the environment damaging mines.
@C-General, Lumwana made a huge profit and sold the company (I think). All companies in mining hide profits! The show two minerals as chief exports but export several other minerals unconventionally. A personal friend with a senior post involved with running the company’s finances (Zambian) and highly qualified at one of the Copperbelt mines was being paid $4,000 a month and all outsiders were getting $16,000 a month. Ama kuluku were also hiding info from him sometimes alebasanganisha! For Zambia, that is why they would want to export concentrates and declare about Switzerland as the destiny for goods. Wake up Zambia.