By Chimwemwe Mwanza
You ‘ve got to hand it to President Lungu for his resolute stand on government’s decision to grab KCM. He has been decisive and unwavering; at least he wasn’t going to loosen his grip on this asset without securing a deal that puts Zambia’s interests above any other.
As this saga continues to unravel, Vendata’s relentless strategy to blackmail government by conjuring a storm of legal bravado, is floundering. Looking back, its victory in the Court of International Arbitration in Johannesburg was of little significance as the Zambian High Court reciprocated by turning down its bid for stay against a KCM winding up order.
What is remarkable about the government’s approach is that it stood its ground amid threats and intimidation disguised in lawfare. No illusions here, it is precisely why Argawal took it upon himself to travel to Zambia. His mission was clear. He didn’t come to State House for coffee, he came to plead for this asset. Its thus not surprising that whispers of an imminent cessation of hostilities began to do the rounds soon after Argawal left our shores.
Then bang, our President is suddenly off to India ostensibly to honour an outstanding one – year old invitation from his Indian counterpart. The timing of the trip to India might well have raised suspicions but this is inconsequential in the bigger scheme of things. The country is owed a swift resolution to this matter as the prolonged closure of this asset isn’t in the best interest of the economy. So, no amount of speculation should distract from achieving a lasting solution.
Truth is that Vedanta needs KCM and the desperation to hold on to this asset, stems from the reason that KCM is the princely jewel in its stable. Isn’t it ironic that Vendata’s successful global expansion strategy – coincided with its acquisition of KCM in 2002?
It can’t be further from the truth that Agarwal used some of the proceeds of profits from KCM to bulk up mining assets in the holding company thus enabling him to buy a controlling stake in mining behemoth, Anglo American. And today, he is one of the single largest shareholders in Anglo American – a factor perhaps made possible with a bit of money from Chingola. More than anybody, he knows that losing this asset will severely impact his fortunes.
Where to from here?
Now that Vendata is on the verge of capitulation, President Lungu must surely be smelling blood. Not only is he emboldened but he will certainly have a huge say on how this sequel finally concludes. Understandably so, he like many citizens have had enough of dodgy investors taking advantage of the generosity of Zambians. Does he go for a kill? One might advise, this is a period for cool heads and sober minds. After this long disruption in production, nursing KCM back to a stable entity will be a daunting task.
In addition to earning a few Memoranda of Understanding (MOUs) which the President signed with his Indian counterpart whilst there, all that government needs to do now is beef up its negotiating team and extract as much concessions as possible before it hands back the licence to Vendata.
This is not to suggest that any of the Russian, Turkish, or possibly Chinese firms that bid to buy KCM in the wake of this saga, should be discounted from the race. It might just well be that discussions with these prospective buyers may have reached an advanced stage.
What are the lessons from the KCM debacle? It’s acceptable that naysayers were possibly salivating that the repossession of KCM would prove to be a reckless gambit; this is because our political terrain is so fractured and polarised along party lines that opposing camps stand ready to capitalise on any misfortune to advance nefarious agendas. And the biggest challenge here is that, the single dimensional focus on the PF government, has blinded us from confronting other deep-rooted challenges facing the country. What happened to the mantra, ‘United we stand, and Divided we fall’?
Need we forget that it’s not PF that sold KCM but the late President Levy Mwanawasa’s MMD, guided off course by Mr Hakainde Hichilema – who now heads the opposition UPND. The deal that handed Argawal this mine and many others pursued in the privatisation of Zambia’s mining assets were rotten to the core. They are littered with greed and this is the reason for the despondency we are now witnessing.
Did we really need to privatise some of our best performing assets such as Zamox, Kafironda Explosives, Mpelembe Drilling and other mining beneficiation and associated entities? Lest we forget, a privatisation exercise that creates a few rich people is not only immoral but is a danger to sustainability of a democracy.
Revisiting the Binani/Ramcoz debacle, the then ruling MMD government chose to look the other way when Luanshya residents took to the streets to complain about the poor working conditions that the new owners of the mines had introduced. Only later did government realise that it had been duped into selling Luanshya Mine to a group of scrap metal dealers masquerading as mine operators. By then, the mine had been stripped off, with all its key equipment sold as scrap metal.
Drawing on lessons from Russia – from where we seem to have modelled our privatisation project – the fire-sale of state assets in the wake of the collapse of the Soviet Union was dubious and only served to create a new breed of oligarchs such as steel baron, Uli Usmanov, oil tycoon Mikhail Khordovosky, oil and gas merchant Roman Abramovich, among others. Dare we ask? Are Russians better off today than they were prior to the collapse of the Soviet Union? Be the judge.
On the flipside, the British could well argue that their privatisation of state assets including British Telecoms – which was cautiously managed – was the best decision ever. Today, assets sold by the British government are not only fledging but do contribute taxes to the British fiscus. It’s really about the ‘how’.
Off significance though, some of the individuals that gave away our mines for a song are still alive and surely they must be called to account. It shouldn’t be for purposes of persecution but to help the country find closure. As the KCM impasse draws closer to ending, this should mark the beginning of a process that allows government to renegotiate all its contracts with mining investors, just a thought?
The author is an avid reader of political history and Philosophy. He loves Nshima with game meat.
A Mwanza musakila nchito?
Let’s keep working Mr. President! Keep changing Zambia for the better. You and your government have done a great job. We will vote you back Hagain because the other small boy is UNELECTABLE.
Great overall picture … we are not selling KCM to foreign investors again. We have enough smart people among us in the Zambian Enterprise who can put together a Management Buy Out (MBO) package.
I would rather we create new Zambian billionaires with this asset than keep making foreigners billionaires. Argawal wasn’t even a billionaires until my copper made him one.
Imagine how many Zambian billionaires we would have produced by now if we followed my suggestions from the time we started this privatization saga.
The MMD didn’t want to listen and that’s why I hate them with a passion. The PF better listen on this and not make the same mistakes from the past.
Let’s roll … Epo mpelele,
BRM
If I were Govt, I wouldn’t touch Argawal and his Vendata with 20-foot pole again! He is a crook who’s word can NEVER be trusted again. He can go in peace and leave us alone.
The best we can do is leave those minerals underground until we figure out how to fully benefit from them as country. It will really be a sad testament to our collective ineptitude as a people if we wake one today only to find gapping holes in the ground, poisoned rivers and the environment, and nothing to show for it. Our future generations will never forgive us!
@ba BR this could only be possible if we can manage to drown our poverty motivated selfishness, unpatriotism and a seemingly inherent affinity among locally grown millionares for the so-called American dream and offshore accounting (Panama).Most tend to alienate once they make a few millions
BR MUMBA 1.2
YAMBAYAMBA 1.3
Guys I like your thinking. We can do it. Making money or running a big company is an ATTITUDE, so is every thing in life.
You make money from your mind and not from the outside. For a long time as a people we have self defeated ourselves that we are not good enough, by conceding that we cannot do it.
Lets remember that, at its peak as a powerful global company, ZCCM was “run” and “managed” by Zambian Professionals, from A to Z.
Brethrens ! Keep posting and educating others on this platform. We are all in this for the better of Zambia
@INDEPENDENT OBSERVER … Axiomatic!!! As far as I am concerned every worker at KCM must own a piece of that pie. From drillers underground to top management ~ all of them need to own a piece of the KCM pie.
Give them stock option plans, let them be shareholders in common stock and let them proxy rights and you will see how each person will be seriously running the company.
@Keeneye … owners don’t steal from themselves, they protect what is theirs. All privatization thieves such as HH externalized their earnings because they had no stake in what they sold.
Let’s roll … Epo mpelele,
BRM
Does the author like his nshima with poached bushmeat – men with money typically like to show machismo. Is he such one?
Don’t forget to ask poker face Francis Kaunda about how he went about selling the family jewels.
Forget HH.
The author’s analysis, to me, seems to be a flight of fantasy. The agreement signed by the Agarwal group and ZCCM-IH had a dispute resolving method clause. That the legal process in Zambia went contrary to the Joburg Arbitration decision can only be seen the effect of once the copper leaves the borders of Zambia.
The whole process of handing over mines to foreigners is a none start, which ever way you look at it. Money earned will leave the country. Compare the Russia privatisation this guy points to, who were the buyers? Russians. Full stop. Every country considers it’s own people. Not Zambians. Not black muntu. In the end ALL the copperbelt towns today are left looking like ruins, with old houses & dusty streets. Copper money goes to build other countries
This PF cadre should stop masquerading as an analyst and writer. He knows nothing. His whole aim is to link HH to KCM. In fact, the initial sale of the KCM package assets under the Chiluba govt was done through George Sokota’s Deloittes. When Anglo gave up on KCM in 2002, the resale was done by Mwila Lumbwe’s team. HH was nowhere near the goings-on at KCM. But the PF thieves who have stolen USD10 billion in under 10 years want to pass the blame of a newly bankrupt Zambia onto somebody else. Lungu and your fellow PFieves, we want our money back. And you will never rule Zambia for more than 10 years, however much you rig elections.
There is dispute that KCM owes a lot of $$$$ to numerous suppliers, foreign and local. So what’s there to arbitrate and why did Vendata boss travel here despite ongoing court cases? He knows what is at stake, steak!
Where does LT get such nincompoops to write articles for them?
The article is well written without malice or bias just states facts as they are. And makes it clear where the author throws in his opinion. Bravo!
The Author is wishful thinking. That’s not how Mergers and Acquisitions are done. In business everything is for Sale. Vedanta doesn’t mind selling its Shares in KCM at a Premium. GRZ has No choice but to negotiate with Vedanta thru the International Arbitrator in JHB. GRZ cannot sell KCM Assets without Vedanta’s Consent and paying Compensation to it. There are major consequences in ignoring Arbitration Treaties. After being paid hefty Damages and Compensation Vedanta will happily walk away from KCM and Zambia. Just wait and see!
The issue of renegotiating contracts is a thorny one that exposes Zambia as an amateur at negotiations.When Anglo American left KCM, we were still beaten by Anil Argawal at negotiations.We must draw lessons from here.In Sierra Leone,the move by President Julius Maada Bio to review mining agreements and subsquent suspension of some mining agreements has caused international alarm and is being followed closely by the World Bank and IMF.Freetown has since reinstated some mining licences while some mining firms have gone to court.I see the same pattern here in Zambia if govt calls for renegotiation of mining contracts.Afterall,its not their fault that Zambia negotiated badly unlike the UK’s sucess story.
Just a thought, yes! Poor thought though! Poorly researched! The chaff has yet to hit the ceiling! The bill’s are piling up! Why did the AG appeal in SA if we are sitting comfortable with the high court process? Do not mislead people…
Good vibes coming out of this article, all good except for the part where the writer suggests , ” extract as much concessions as possible before it hands back the licence to Vendata.”
HAND BACK WHAT LICENCE? Licence to LEAVE! Thank you…
It’s right to give kudos to His Excellency, ….Great Son of our Soil. Under no circumstances would the kudos be upheld if there is a reverse to what has been an uplifting modus operandi. Forward to new beginnings.
Sobering article. The transition from UNIPs one party controllist state by MMD was a sham. PF are doing well by retaining some of the nation’s assets like Zamtel and now KCM. Beware the propaganda upnd is spreading as they will definitely finish off the job MMD started-ZESCO is their main target…
You and the guy who wrote the article are both clowns. Repossessing ZAMTEL was a dumb move, the company has good serious problems and it cost us a few hundred million dollars. If that is a good thing, then I guess we are all misguided. As for the author, get your facts correct, Agarwal no longer has shares in Anglo America… He made his money and cashed out!! I find it very hard to take you seriously if you can’t even get basic facts correct. The reason the PF is in power is because we have too many jokers like you making so much noise that the uninformed assume you are telling the truth.
KCM will go back to Vendanta.. You Zambians can’t match the skill of the Indians to get what they want..We are still minnows.
Indians have no skils: The Google of China is Baidu, Facebook is Tencent, WhatsApp is WeChat, Amazon is Alibaba, iPhone is Xiaomi and Huawei, Mark is ‘maku’ AND Hilux is ????
You must crazy to think Indianso have such of theirs from their heads ..????????????
Please do the right thing. Not what mmd did to our mines. RB even sold Zamtel. Why? Some say because HH gave them the idea. Why do we elect leaders who are easily misled? Arbitration clause is always there in international contracts and the applicable court of arbitration is in the contract. One wonders why people are referring to the Zambian courts who are not in the contract. Do you want to renegotiate the contract? Now that is a non starter if it is not in the contract. Exit clauses. What do they say? Even my house tenant has a contract with specific clauses. Why is the whole GRZ machinery throwing punches in the dark?
A really eye-opener to an analytic mind. Credit to all contributors. One of the clear outcomes is the cleverness of one HH. He wisely uses politics to cover-up his mishandling of the privatisation which made him become one of the few richest people in Zambia. And by making him a Republican President he will completely protect himself against any accountability requirements. Let’s keep watching this space.
You are the only dullard watching that space mune
In 2016 and 2021 HH clearly thought he was going to win the elections and forgot about the 50+1!
His arrest will definitely follow for privatisation thefts
Comment:The author has just exposed his ignorance with information gathered from his fellow nuckleheads.
Yes lets go for it we can do it,if our fellow human being can do it,who are we to fail?we are not failures we can do wonders as a country.Leave KCM to Zambians to run it, probably management buy out can do.Dont give up let us unite for our mother Zambia.VIVA ECL no turning back boss.
Wow, what a very simple mind, typical of PF aligned chaps. The Zambian high court does not have a foot to stand on, Zambians will still be the biggest losers in this debacle because the law always wins, case in point Lapgreen. Lungu is dull. Only a dull president would yap carelessly at the airport about something so sensitive without a shred of research. DUll analysis trying to please a very dull government.
Strange!
“Need we forget that it’s not PF that sold KCM but the late President Levy Mwanawasa’s MMD, guided off course by Mr Hakainde Hichilema – who now heads the opposition UPND”
HH advised FTJ to sell Nchanga mines to Anglo-Americans and u-turned against Anglo-Americans and misguided LPM to resell KCM to Vedanta!
So we have had charlatans in government to be manipulated by an individual?
Didn’t realise HH is that powerful! A failed ploy to make HH publicly detestable.
The writer has convoluted brains. No wonder Vedanta is now Vendata: Or is it just vendattas against HH?
Auto-predict also autocompleted
‘vendettas’ replacing it with ‘vendattas’.
Useless feature!
And in case this dull writer has not heard, the High court has stayed proceedings in favour of Vedanta while applications are studied.
Please give us the correct spelling…you keep changing from Vedanta to vendata…..it is NOT Vendata, it is VEDANTA.
The PF has got too many of these jerks writing articles discussing things they know nothing about and I guess Zambians are also too gullible. To me it seems every serious decision was made by HH, so why not put this extremely powerful man in power so that he can be held accountable for any bad decision he makes because according to the PF themselves it is still him who is calling the shots on key issues in this country thus rendering Edgar Lungu a middleman of sorts who is not necessary. Awe twanaka with all the retarded articles and clueless explanations for the problems the country is having. Reminds me of my 7 year old son trying to explain why he is doing something I’ve told him not to do. We need to make a plan as a nation… FAST!! lord hear our cry… We are on our knees.
The “decision to grab KCM” is not the President’s personal idea. It is a common collective shared policy of government officials acting in their respective official capacity as executive. Any form of ‘grabbing’ is wrong, whether perpetrated by an individual or by a group of individuals. Why grab? Grabbing implies that force and the use of force is wrong in a business transaction. In this dispute, there is everything except blackmail. Government is saying, a new business partner must be found. Bendeta is saying, focus on the problematic issues and not investors is needed. Whether or not KCM profits contributed to acquisition of shares in Anglo-American by Bendeta is irrelevant. Profits are spent according to wishes of the rightful owner. Take time to resolve an impasse. Take time to…
Whether or not KCM profits contributed to acquisition of shares in Anglo-American by Bendeta is irrelevant. Profits are spent according to wishes of the rightful owner. Take time to resolve an impasse. Take time to attract FDI. Take time to create and safeguard employment.