Vedanta Resources Head office

University of Zambia academic Dr Sishuwa Sishuwa has warned that Zambia risks paying billions to Vedanta Resources just like the Democratic Republic of Congo and Pakistan were ordered to compensate foreign mining investors whose operations were taken over without following the law.

Antofagasta in Pakistan has won $6 billion in damages, seven years after the Pakistani government took over its mining operations without following laid down procedure, while the Democratic Republic of Congo (DRC) has been made to pay First Quantum Minerals $1.2 billion compensation for equally flouting the law when seizing the mine.

Dr Sishuwa has said what happened to the DRC and Pakistan could happen to Zambia arising out of the legal battles the government has with Vedanta Resources that owned majority stake in Konkola Copper Mine.

He said the seizure of KCM should adhere to the arbitration clause contained in the sale agreement.

“Let the government follow the correct legal procedure. The fact that Vedanta may have breached parts of the original contract does not give the government the license to ignore legal procedure in resolving disputes with the errant party or to appropriate property without compensation. If anything, the government’s action may be taken as constructive nationalisation under international law. One lesson we can draw from what has happened to Pakistan and Congo is that Zambia will almost certainly lose international arbitration over KCM should Vedanta succeed in bringing the matter to a discussion table. I have seen the original agreement of sale on KCM and read Clause 26.1, which speaks to arbitration, and Clause 24.2, which requires a notice to be served through the Zambia Association of Arbitrators. My careful reading of these sections is that the arbitration clause is very particular about how to resolve disputes like the one that has arisen”, said the UNZA researcher.

He stressed the need for the government to pursue its “good case against Vedanta” by following the guidelines on arbitration provided in the original sale agreement.

“The problem is that we are never fully conversant with the agreements or contracts we, as a country, sign. And so we mess up and are made to pay even more. This time the blunders are so obvious that Vedanta does not even need top-notch lawyers. If anything, President Edgar Lungu and Minister of Mines Richard Musukwa are making the kind of cheap mistakes Vedanta had hoped they would make. Now that Lungu and Musukwa have fallen into this clear trap, Vedanta will easily get its money through international arbitration, cut its costs and run”, Dr Sishuwa said.

“We should note that Vedanta has already enriched itself from KCM while not maintaining the mine properly. In fact, my reading of the state of actual mining at KCM is that it became more profitable to play with “transfer pricing” by importing material for processing at KCM than actually mining copper. So we are talking about a foreign company with a nasty record here, a company that is arguably complicit in ripping off Zambia and in the massive flight of capital from the economy of this land of my umbilical cord. Why is the government so determined to give Vedanta more money through litigation-acquired damages?” he asked?

The UNZA lecturer advised President Lungu, the Minister of Mines and the Attorney General to avoid “this expensive mistake for Zambia”.

“What professional advise is Attorney General Likando Kalaluka giving to President Lungu and Musukwa because the mistakes that the two are making, including their off-the-cuff remarks, reflect poorly on the government’s chief legal advisor. It is really difficult to understand the intransigence and arrogance that is coming from our public leaders. Why is Lungu and his friends in Cabinet insisting on pursuing a route that will most likely cost the country heavily in damages? They have a very good case against a horrible and sickening investor in Vedanta, but are going about the issue the wrong way. There was an excellent write-up the other day from Elias Chipimo Jnr, the leader of the opposition NAREP, emphasising the need to follow procedure. I entirely agree with Chipimo and urge Lungu and the government to step back and seek an out of court settlement with Vedanta. It is not too late. The approach they are hell-bent-on will cost the country heavily and it won’t be Lungu and Musukwa to pay. It will be the poor and ordinary Zambians, including myself, who would be condemned to paying for this expensive mistake that can easily be avoided. Why is it so hard for Lungu and Musukwa to do the correct thing? What really motivates the decision-making of our public leaders?” he asked.

Dr Sishuwa urged President Lungu not to repeat the costly mistakes made by the government in the 1970s when mines owned by foreign companies were seized.

“If Lungu and Musukwa cannot learn from what has happened elsewhere, let them at least learn from our own historical experiences. What we are witnessing at KCM is merely the repeat of history. Zambia lost international arbitration against the foreign mining companies in the 1970s after cancellation of their mining rights and had to pay them off hefty damages in dollars. It is only that we are a people that neither values nor learns from history; otherwise we should not be repeating some of these basic mistakes. I hold President Lungu responsible for this outcome because he treats public service so casually that he thinks little about the quality of the people he appoints to key offices and works with. It is his responsibility, for instance, to choose competent, experienced and independent-minded presidential aides, and to put in place a Cabinet of individuals with admirable qualities, who should advise him. You cannot look at Lungu’s cabinet today without being struck by the calamity of the absence of such individuals”, he said.

“The likes of Freedom Sikazwe, Kaiser Zulu and many other people at State House should be nowhere near the presidency or the leadership of a country seeking to take itself anywhere serious. Yet oddly, these are the elements Mr Lungu is most drawn to. They, in many ways, reflect his outlook, I suppose, and demonstrate why he is eminently unsuitable for the highest office in the land. At this rate, there is no telling how far back we could slide. Ba Lungu, muletutwala kwisa?” he wondered.

Dr Sishuwa said few serious investors would be willing to buy KCM if the legal questions surrounding the liquidation of the mine are not resolved in a satisfactory manner.

He noted that instead of rushing to sale KCM and leaving a trail of mistakes that will cost the country in future, the government should strictly adhere to the contract of sale.

“The other lesson for Zambia from what has happened to Pakistan and Congo is that any credible new investor will worry that they will be sued successfully by Vedanta, and be liable for a similar huge pay out. The Zambian government should resist the urge to focus on short-term political benefits and instead consider the long-term implications of their actions. It took seven years, for instance, before Antofagasta won a $6bn in damages from a legal fight with the government of Pakistan. Coincidentally, Pakistan has just secured a $6bn bailout from the International Monetary Fund. Zambia is also fighting for a $1.3bn IMF bailout. There is a possibility that the package may go straight to Vedanta from the IMF! Is this what the government wants? Having delayed for years the pressing need to get a better deal from the mines, the government is making a totally incompetent decision,” Dr Sishuwa stated.

“Even if they find an incredibly dubious company to buy KCM – genuine and credible investor will be worried about becoming embroiled in years of legal battles with Vedanta – this issue is likely to drag on for years and eventually cost the country dearly. Let Lungu and his friends in Cabinet summon Zambia’s best minds to help them find a better solution to the mess they have created. What Vedanta wants primarily, in my view, is to protect its image internationally; it is not to take back KCM, so an amicable solution can be found,” stated Dr Sishuwa.

“The team that the government has constituted to help resolve the issue, which includes Francis Kaunda, Milingo Lungu and politicians like Anthony Mumba, should be nowhere near any serious discussions. I know the poor role that Francis Kaunda played in Zambia’s disastrous privatisation of the mines in the 1990s; many Zambians have little regard for Milingo insofar as his credibility and competence for the role he has been assigned is concerned; and politicians like Mumba should simply stick to making bad laws.”

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47 COMMENTS

  1. Your wife is caught prostituting with Vendata, you file a divorce, and put Milingo Lungu to monitor your wife movements.
    Now Shishuwa comes and say “… Richard you will end up paying more than you have in divorce fees. Look what happened to Ntwenokane”.
    Meanwhile Milingo also seems have moved into your bedroom.
    And still you trust Shishuwa’s lamentations.
    Chibe chibe umwenso ni mfwa.

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    • I agree wth Sishuwa that the chances are Vedanta will win @ arbitration. After winning Vedanta isn’t coming back to Zambia but will walk away with a big cheque to taunt us again. It looks like Lungu has tied a millstone around his neck. If Zambia loses tomorrow in South Africa as looks likely, it could just bring more woes to the foreign exchange market at a time whn we badly need stability.

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    • I got -4 votes for the first time above and more coming. People didn’t get my point.
      Shishuwa whatever you and Chipimo writes, the people around Ba Edgar can’t comprehend, thus kind of wasting our time. But keep writing.
      Shishuwa if you are serious, then go get a yellow overalls and step on podium to address Ba Edgar’s people. Show them yellow card!!

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    • Such a bad analogy by Nostradamas that if correctly put he may have been right.

      Perhaps it should be seen that Sishuwa is advising you the one divorcing (Govt) that you should follow proper court procedure to divorce your cheating wife (Vedanta) because using physical abuse to chase (Vedanta) her may land you in more problems when actually you are the aggrieved. Your choice of family representatives also (Anthony Mumba, Milingo etc) are also poor – uku ya sendemo ba lya bene Ba yama aba pa last who are just interested in money rather than your best interests.

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    • You ‘may’ have a point. But the case in the Congo was different. It was very militant act partly because it was organized by the Powerful Rebel Groups who blackmailed the government to grab back the mines who have been fighting a jungle war for decades.

      The Zambian case is very unique. Vedanta dispelled and broke the rules of engagement and law so many times. Just take these cases out of the 17 failures.

      1.Polluting the rivers and toxic chemicals
      2.Tax Dodging & cooking Financial Books

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    • I would ask this dude from UNZA ( Dr Sisguwa ) to look at both cases before firing his rifles. He needs to look at all the failures by Vedanta before before he blows the trumpets.

      (Dr) Dont just dispel who surrounds Lungu. As a president he listens to various (i) Advisers and (ii) Experts whom you may not know including external international consultants on specific subject matters. In the same way Chiluba & Mwanawasa did, by hiring external people such as the Rothchilds of London before selling the mines

      We have this habit in Zambia of always coming to presumptions.

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    • @Czar, that’s a good one, imwe mwamoneka abakwata amano. If it was pa weekend I could have bought you Rhino lager.

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    • A good case poorly managed ends up as a bad case.Independent observer,the government appears to be panicking. We should have followed the procedure. There was no need to panick,we have a good case,but having not followed the long and narrow route will certainly cost us.And which people does the president consult?Freedom Sikazwe?We are due to pay a high price for this…

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    • Without commenting on Sichuwa, what really amazes me is lack of understanding of the international arbitration process by the government and the elites on this forum. In most of the western world, a mention of an international arbitration case is taken seriously. I don’t see that seriousness in case of the Zambian government in dealing with this Vedanta sh.i.t that ECL and his gang has cooked for us.
      Each day I am asking where is the Attorney General, and is he doing his job? Where is LAZ? This where I expect LAZ to shine by providing advice to the embattled government, which was focussed an opportunity to fill their pockets without considering the consequences to come. Zambians must be ignorant if they are underestimating this arbitration case.

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  2. Seems like Edgar Lungu is driving Zambia into debt trap,insolvency and seizure of state assets.We need a revolution .

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    • Nonsense! What revolution? Te minister of mines and minerals was on the Sunday interview last night and he handled the matter of KCM very ably. Sishuwa is a theorist with no practical industry experience. Let him no mislead people. If any court decides to fines Zambia for liquidating a none performing investment, Zmbia should take the path of Idi Dada Amin, the last conqueror of the British empire to get rid of all Indians even if they have Zambian citizenship

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  3. Elisa my white Swiss wife woke me up this morning asking me what I thought of the fat black women pictured at some event in Lusaka called Lusaka July. I was so repulsed and shocked to see the state of some of them. I appreciate my beautiful Elisa more now after seeing such a state

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    • NEW EDUCATED ZAMBIA. [ N.E.E.Z ] @ 3

      I HAVE TOLD YOU TO GET OUT OF HERE AS LONG AS YOU CONTINUE POSTING TRASH. GO F*CK THE DOG YOU MARRIED, THEN GIVE YOUR MOTHER A BL0W-J0B. YOU ARE SICK PERSON THAT NEEDS TO GO ON MEDICATION.

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    • alot of angry bigots here. when you are called savages and monkeys by those in the western world you cry foul and yet here you are proving them right. why are you threatened by the race of the woman i love and who loves me back. the only dog here is the one that gave birth to an imbecile like you. elisa is not surprised by this behaviour. she experienced it from mostly zambian women and men wtih tiny penises when she lived in zambia

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  4. Dr Sishuwa, did you have a night hangover? It’s more serious than a morning one and is common among academicians when they are frustrated with failure to complete a research topic successfully.

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    • He probably did because a sober person can’t write such trash. I the South African justice system rules against Zambia, the we should close our borders with Zimbabwe, Botsana and Namibia to all South African traffic coming to Zambia and some proceeding to DRC. WE SHOULD NOT ALLOW WHITE MONOPOLY CAPITAL TO DICTATE TO US. SISHUWA IS A TRAITOR

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  5. DRC paid First Quantum the 1.2b$ easily and first quantum came in Zambian to misuse us without benefiting from them.

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  6. This “miner” Vendetta is delinquent, what image does he have to protect? The bottom line here is that by failing to pay his creditors Vendetta drove KCM to receivership, the government action was just in the nick of time before bailiffs were to move in. What arbitration is applicable here iwe mufana Sishuwa please?

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  7. The DRC case with First quantum is totally different and from day one all parties knew the outcome.

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  8. As usual Sishuwa is misleading the gullible bantustans. Failing to pay debts when they fall due is not a DISPUTE that can go to arbitration. The only way out is compulsory winding up (liquidation) because the company is deemed insolvent. If you love Vedanta so much, follow them to New Delhi. I can assure you that there is no tribunal or court of arbitration anywhere in the world which can protect an insolvent company like Vedanta’s KCM. Did Antofagasta in Pakistan and FQM in DRC fail to pay debts when they fell due?

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    • indeed Sishuwa is not sure,’The fact that Vedanta ”may have” breached parts of the original contract’ is not a true statement just say ‘The fact that Vedanta breached parts of the original contract’ and just end there , otherwise you will just be wasting our time trying to prove that uli chilandelande

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  9. Zambians should have taken over
    The Running of mines and let Vedanta get the
    Backsit and observe how government was running. The other way round.

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  10. “Let Lungu and his friends in Cabinet summon Zambia’s best minds to help them find a better solution to the mess they have created” The problem with Sishuwa he thinks he is the cream of Zambia and only he Sishuwa has the solutions to Zambia’s problems.

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  11. The chap is lying, DRC has never paid anything to anyone because of a dispute in mining.

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  12. Stupi—-d doc of UPND.For them it’s changing goal post every hours.Who is happy with KCM?Nowonder your party Sichuwa can’t win elections coz u’re too bitter.Can u support KCM?Please find time to think and help mother Zambia instead of yo bantustan party.I’m not happy with PF but on this one i support Lungu 100%.Bakuwe imwe ba fake Doc.Let these foreignners not take advantage of Zambians.We’ll start negotiating now.

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    • Moscow(op), this is powerful. This Dr. is misleading UNZA students because he has been promised a ministerial job by HH. Sishuwa, HH is a snake that has made similar promises to hundreds of slow minded doctors. Yu will be dumped like used tissue paper the moment HH catches a whiff of state house.

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  13. You have hard it all for yourself. Let those that have ears, listen and comprehend. Let those that have eyes, see and comprehend. The excitement of bashing the rich and powerful will die down. Then the moment of reckoning will begin. This is the tragedy of poor developing countries. You wake one day and blow the gains of decades of saving and hard work. Stop it! Listen to the voice of wisdom. The arbitration clause exited for the very reason that has arisen.

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  14. Sishuwa is just another Kandile using tribe glasses to look at things. Does this kandile know that KCM never bought a single new vehicle except few Japanese used cars for its operations? They stopped mining and were importing concentrates from DRC and laid off many miners.

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    • Beene: By 18:00 hrs tomorrow 23rd July, all the speculation will be over. I hope for the best but I can’t say I’m ready for the worst. Why tribe comes into your argument , I don’t know. THe Catholic Bishops, HH and many others warned against increasing govt’s borrowing limit way back in 2014. Where are we now?

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  15. This is what I was talking about, PF cadres were busy saying no Lungu is a Lawyer he knows whats talking about. Blankness i written all over his face ati naishiba ifyo alelandapo.

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  16. If the country is made to pay billions,the same amount should be levied on the those who made the decisions.

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  17. This government does not care whether they win or lose the case. It is not them to pay the price. It’s the ordinary citizens who will feel the pinch.

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  18. reasons why Vedanta can’t win a case
    1. enslaving Zambians
    2. non payments of taxes
    3. no utility vehicles for the company only three vans left by Anglo are in operation and in bad state.
    4. no salary increments for KCM 5 for the past 8 years while Indians without proper qualifications and a few useless Zambians get heft salaries in $( they get automatic increments due to decline of kwacha against $).
    5. non payment of salaries for contractors for over 7 months
    6. non payment for suppliers.
    7. no capital to inject in the mining areas i.e. open pit and underground
    8. use of divide and rule method. ( jayesh Patel)

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    • Has this been put in GRZ defence? Non of them are part of reasons ZCCMIH’s liquidation petition.

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  19. Only UPND sycophants and zealots and enemies of progress can support the educated danderheads like the fake Dr Shishuwa who unfortunately is into group think mentality and hence cannot analyse issues objectively but subjectively…

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  20. DRC never paid FQM a penny! They were not paying their dues as they kept the Kingamyambo & Musonoi Tailings Leach faciliy a project over the period 1999 t0 2010 when the brothers said enough is enough.
    Enter Israeli billionaire, Dan Gertler, through connections to Joseph Kabila, he acquired the asset together with the Frontier Mine near Sakania and later sold it to the Kazakh billionaires – Eurasian Natural Resources Corporation (also the owners of Chambishi Metals in Zambia). The matter has since been resolved out of court. FQM was paid $1.25bn, roughly equivalent to what they had spent on the project. If Lungu should find an investor willing to offset the burden of compensation, all of the diatribe wishes of gloom and doom will be academic.

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  21. Dr Sishuwa is right on most accounts. A lot of Zambian readers first reaction (if at all they even get the gist of the article), is denial. They also feel intimidated by real intellectuals. They would rather wallow around with people they think are at their level or below. It gives them a sense of false satisfaction.

    This is the tragedy. We are complicit to this mess by tolerating mediocrity at the expense of people who state the truth. Some even think Dr Sishuwa should not express himself thus, unless he is in politics. Any citizen has a right to analyse issues and proffer their opinion or facts.

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  22. That’s your opinion, but never mislead the people to think you are right.where were you when vedanta Enslaved us?where were are you when supplies were not paid for months? Where were are you when contractors where not paid? Where were are you when these people killed the whole KCM industry by stopped mining instead of concentrating on processing? The problem you don’t know all these issues within KCM but busy writing disturbing articles?

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    • Ba Steve, mwati mwabelenga the news story imwe or you just came straight to comment? Dr Sishuwa also wants KCM out and is saying exactly what you are repeating. He’s however warning that in kicking out KCM, let’s follow the legal procedure provided in the sale agreement. He is warning that procedural impropriety may waterdown the strong case GRZ has against Vedanta, and risks exposing taxpayer to hefty and unnecessary penalties. What is “disturbing” about the guy’s warning? Mukazibelenga! You are too young to be this ignorant.

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