President Edgar Lungu has directed that ZCCM-IH to drop its fraud case against First Quantum Minerals and some of its directors, his spokesman Amos Chanda has disclosed.
According to Bloomberg, Mr Chanda however said arbitration over the matter will continue in the London.
First Quantum Minerals had written to the Attorney-General expressing fears that its directors named in the case could be arrested if they enter Zambia and asked him to intervene.
ZCCM IH which has a 20 percent stake in First Quantum’s flagship Kansanshi mine, also started arbitration proceedings against the company in London last year.
In the Lusaka High Court case and the London arbitration, ZCCM-IH argues First Quantum took out a loan from Kansanshi at non-commercial interest rates and used it for company operations outside Zambia, disadvantaging ZCCM-IH as a 20 percent shareholder in the mine.
First Quantum is accused of fraud and ZCCM-IH is seeking as much as $1.4bn.
First Quantum CEO Matt Pascall described the allegation as “vexatious and untrue”.
“The instruction is firstly to reach an amicable settlement,” Mr Chanda told Bloomberg by phone.
“The settlement presupposes that the arbitration case in London will continue but these other actions that have been started here in Lusaka, they have to stop.”
Mr Chanda said President Lungu asked Finance Minister Felix Mutati to oversee the dispute between First Quantum and ZCCM-IH a month ago.
“We foresee a swift settlement of this matter,” he said.
Mr Chanda said the letter First Quantum’s operations director Matt Pascall wrote to the attorney-general on April 21 was “totally unnecessary.
First Quantum declined to comment, and ZCCM-IH didn’t immediately respond to a request for comment.
Meanwhile, President Edgar Lungu has assured the donor community that his administration is committed to upholding the rule of law and the tenets of democracy.
In a message to members of the diplomatic corps conveyed by Minister of Finance Felix Mutati at the European Union national day last evening, President Lungu said his political governance model will be anchored on the rule of law, non interference and respect for human rights.
Mr Mutati said the Head of State will promote political dialogue to induce foreign investor confidence in the Zambian economy.
The Minister also said Zambia has chosen to anchor its economic development on home grown solutions to deal with the challenges that the country is facing.
He thanked the EU for its continued support to various development programmes in the country.
Earlier, European Union Head of delegation Allesandro Mariani described the ties between the EU and Zambia as solid and dynamic.
Mr Mariani pledged the EU’s support to Zambia’s development agenda and wished President Lungu and the people of Zambia prosperity.