Reuters reports that Zambia will carry out regular audits at all mines to avoid any repeat of the situation at Vedanta unit Konkola Copper Mines (KCM), which has breached the terms of its licence, the mining ministry said on Thursday.
Zambian President Edgar Lungu said on Monday the government planned to strip KCM of its mining licence and bring in a new investor. His spokesman said the move followed a number of breaches of the terms of the licence, without giving details.
The government’s action on KCM has added to concerns among the mining community about rising resource nationalism in Africa.
Mining Minister Richard Musukwa said the action at KCM “should not be misconstrued as nationalisation” and followed KCM’s failure to “comply with licence conditions”.
“The government will be undertaking regular audits at all the mines to ensure compliance and avoid the recurrence of the situation at KCM,” he said.
Zambia has already riled miners with tax changes that mining companies say will deter the investment Zambia desperately needs after repeated warnings from the International Monetary Fund about its debts and shrinking foreign currency reserves.
A little too late now isn’t it ?
Those audits will likely be compromised to start with.
Thanks
BB2014,2016
It’s only under pf where a minister can continue in his role even after being charged with corruption. Meanwhile the mines minister has only just woken up from a long slumber due to inducements from the mining company. This is the effect of corruption and not lack of audits. Vote upnd
Audits have been taking place! It’s just that they were reduced to allowance-making exercises!
The less statements we make at this stage the better because our statements are causing further unease and uncertainty about the future of mining in Zambia! We have failed to run ZESCO, ZAMPOST and other state-owned companies. What gives us the Coachroach illusion and courage that we’ll manage mines? We can’t even manage the black mountain sure! Just sit down the technocrats, remove cadres and PF functionaries from the KCM issue!
It’s true these cadres come straight from Intercity, they just get them jackets and ties. That’s it, he is a Minister. Where has this guy been hiding All along. He talks like someone who has been waken up with a huge hangover. With this calibre of ministers it’s a pipe dream to expect any reasonable outcome. More like mike mouse!!
Very sad reading indeed. The “regular” audits will just begin. It explains why companies veil not be in a hurry to fulfill their obligations because they know that theses guys are not serious.
This sounds to me like closing the stables long after the horses have bolted. Bwana Minister, this is not about audits. This about the right audits carried out at the right time by qualified and experienced experts to hold the mines to account for set and agreed performance standards. Otherwise you are just going through the motions. And by the way, such expertise does not come cheap. You need the best of the best, remunerate them well if you want them to catch you mice. Cheap is expensive.
@Kanyata Mubita , they do have the best, the last ZCCM IH, head was a PhD, with a life long expertise.
The problem is the Mining investors trying every trick in the book to get away with it. The govt had been trying by various tax measures to bring them to book, but they keep trying to bring the country down by resistance. The ifinsncial nternational community is not helping with negative reports.
All “investors” invest to make money. So they will exploit any loophole and make more money. They will also use any means necessary to avoid paying tax. So it is upon the Govt of the day to put systems in place to collect the due tax. We have institutions such as ZRA responsible for tax collection, why should it take the whole head of state to announce a suspension of the license of a company? This is why the head of state attracts criticisms and insults from every Jim and jack. Our institutions should just do their work.
It’s the same head of state who has paralyzed all our institutions through appointment of cadres! Let’s just admit we have Kaponyas presiding over the affairs of the state! Political appointees in Africa lack the space to think independently! Even saying the truth is tantamount to insubordination and you can get the boot! So it’s safer to just watch the naked emperor than talking about his clothes … Kikikiki
Which of the following is true or may be taken as the reason why Govt moved into KCM:
a.KCM is insolvent
b.KCM bleached license conditions
Would an insolvent company continue to operate as a going concern?
@Chitapankwa Allepo Trump, you are being a bit pedantic.
They meant that whilst in liquidation, measures are being taken to soften workers rights, including expatriates in the INTERIM while liquidation is taking place, they are ensuring the mine is operational until new investors take over. Security measures are in place. That’s the first announcement that came when the appointed were announced.
Using accountants for audits has been our undoing. Let meturlugists and mining engineers do the audits would serve us better. Accountants should just look at financial matters
Is this a liquidation or take-over?? What did ZCCM-IH apply for in the High Court?? Liquidation=Winding up the company, Take-over placed in administration = continue with operations with thee aim of salvaging the company for another investor. Minister come clean. In court your saying liquidation, outside you’re actions are doing something totally different!!!. Business is not politics. Nowonder the Government is broke.
Government, through ZCCM, sits on the boards of these mines. Why would you need audits now when ZCCM should have all information on the operations and decisions made by the other shareholder & have always had information and full access to all accounts? Laughable statement from Government/Minister!
@,John Lungu, this ties in to a Reuters report. Most international readers would not know ZCCM IH acts on behalf of the citizens share. Read in-between the lines!
Resource Nationalism? It’s time the Mining Community in Zambia worked with the governments hosting them.
But, what rankles is that we are now putting in measures to audit …more effectively I suppose, because that ought to have been done as a matter of course. You can’t be in a partnership and not watch over your half diligently.
We support the action of our government to tighten revenue collection and urge them to be diligent over the Mining community.
Please note Patriot Abroad has added a title change.
Patriot Abroad – Championing Mental Health Democratic Rights Inclusion & Participation
Our Minister of Mines, the permanent secretary and other government ministries and ZCC-IH who sits on KCM Board was sleeping and do not know the operation of the mines. Can the government tell us what KCM has done. We do not want to hear from hearsay. No wonder 31 parastatals companies make losses.