Vedanta Resources Head office

Vedanta Resources Limited has accused Provisional Liquidator of Konkola Copper Mines (KCM) Milingo Lungu of lying about the state of affairs at KCM.

In a statement, Vedanta says the production volumes and targets that Mr Lungu has been communicating to the public is incorrect.

“Vedanta Resources Limited notes the media statement issued on 13 November 2019 by Mr Milingo Lungu, the court-appointed Provisional Liquidator of Konkola Copper Mines (KCM). Vedanta is concerned at the way in which some of the points were presented by Mr Lungu – and wishes to set the record straight,” it said.

“Mr Lungu states that “KCM has continued to ramp up production at all business units including Nchanga Business Unit, Konkola Business Unit and Nampundwe Mine near Lusaka” and that “the Konkola Underground Mine at Chililabombwe is targeting close to 2,000t of integrated copper in concentrates this month while Nchanga Underground and Nchanga Open Pit Mines have targeted 1,300t of copper in concentrates. The Tailings Leach Plant has set a target of at least 3,000t of cathodes for the month of November.”

It said, “While Vedanta respects that the Provisional Liquidator is attempting to operate the KCM assets to the best of his ability, the reality is that since Mr Lungu’s appointment on 21 May 2019, integrated production across the business units has dropped. Konkola underground mine did not produce ore from mid-July to early September 2019.”

It revealed that in the 2019 financial year – under Vedanta’s management – KCM delivered monthly average integrated mined production of 7,600 tonnes – comprising 2,500 tonnes of mined metal from Konkola underground mine, 1,050 tonnes of mined metal from Nchanga open pit and underground, and primary production of 4,050 tonnes from the Tailings Leach Plant.

Vedanta says this is higher than Mr Lungu’s production target.

It added, “Mr Lungu further states that “my focus continues to be ensuring that we nurture the value of KCM asset.”

Vedanta said it is extremely concerned about the manner in which KCM’s assets are being managed.

This concern has been reinforced by the following recent press reports:

• 13 June 2019 – Fatality at Nchanga Smelter

• 15 July 2019 – Disposal of assets – Two Dumps

• 10 September 2019 – Disposal of assets – Mimbula Resource

• 09 October 2019 – Nchanga Smelter CRF Slag run out

• 28 October 2019 – 28 Miners trapped underground at Konkola

• 14 November 2019 – 53 KCM workers, 232 KCM pupils hospitalized after sulphur emission

The recent serious incident on 14 November is particularly shocking.

It said the news that both KCM employees and schoolchildren were hospitalised as a consequence is deeply distressing.

“Vedanta is aware that concern is being expressed in Zambia over the way in which the Provisional Liquidator is awarding new contracts to inexperienced and unqualified contractors. Given the state of KCM’s operations, Vedanta does not see the need to increase the vendor base and is concerned that the industry-wide standard levels of diligence on vendors is not being followed.”

It added, “In his statement, the Provisional Liquidator refers to “KCM’s working capital which was completely eroded during the previous era”.

“Vedanta would like to re-iterate that KCM’s working capital was severely affected by the non-refund of US$160 million in VAT returns due to KCM by the Zambia Revenue Authority, as per our previous media statements on this matter. Vedanta acknowledges the efforts of the Provisional Liquidator to make payments to a selected group of local creditors.”

“However, we understand from engagements with KCM’s larger suppliers that some of these are not being paid and in some instances such suppliers are withdrawing essential services. Vedanta notes the Cautionary Statement issued on 27 September 2019 by the Copperbelt Energy Corporation (CEC) Company Secretary, advising that ZESCO has issued a notice of arbitration against CEC, pursuant to their Bulk Supply Agreement. The statement notes “ZESCO’s claim that CEC has failed to pay money due to them for electricity supplied under the BSA.”

‘The amounts outstanding relate to the supply of power by CEC to Konkola Copper Mines Plc (“KCM”), which supply KCM has not paid for”. Given KCM’s average monthly consumption, we expect the amounts currently owed to CEC to be approximately US$100 million.”

It said this will financially constrain CEC’s business and the entire electricity value chain, thus exacerbating the current electricity crisis in Zambia.

It stated that Vedanta remains fully committed to all of KCM’s suppliers and partners.

“During the five months since provisional liquidation on 21 May 2019, Vedanta has continued to honour significant KCM financial obligations and to date, bank loans and credit facilities amounting to US$203 million have been settled.

Vedanta remains committed to engaging with ZCCM-IH and the Government of Zambia in order to find an amicable solution that is in the best interest of KCM and Zambia.”

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20 COMMENTS

  1. “By 31 July, we will hv a new investor at KCM”. That was Edgar Lungu at Maputo airport in June this year. Chances are there won’t be a new investor at KCM even by July 2020. I doubt it Edgar Lungu knows anything about the bitch called international business.

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    • Please listening to VENDETTA or MOPANI is a waste of time. Let them go away, far away. The MUSEUM would be the best place for them.

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    • As Zambians we shall run it and run it well. We have run mines in the past, seat your inferiority complex self down.

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  2. ““During the five months since provisional liquidation on 21 May 2019, Vedanta has continued to honour significant KCM financial obligations and to date, bank loans and credit facilities amounting to US$203 million have been settled.” He is working so ba Vedanta what is your point?

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  3. India: At least 10 people dead during protests against Vedanta’s operations; co. responds
    Indian officials have ordered the closure of the nation’s second-largest copper smelting plant, owned by UK-based Vedanta, due to fears of pollution and in response to protests. Police killed 13 people in recent protests aimed at closing the plant. We invited Vedanta to respond regarding the killing of protesters, Vedanta responded.

    Source : business-humanrights ( dot )org

    These criminals Vedanta are no welcome in Zambia or Africa. Let these deviils go somewhere else.

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  4. Common Zambians , you can do it…..

    My only concern is political appointments by PF and channeling of crucial funds from KCM to PF campaign war chest…….

    Otherwise , sure Zambians can run those mines……

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    • There is a real threat that lungu and his PF will milk and destroy KCM like how they did ZESCO ……..with useless political appointments and diverting cash from the business to PF operations and GRZ funding holes

      If lungu and PF were not so desperate to cling to power , i am sure KCM in capable Zambians hands can be operated profitably

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  5. Why are the wheels of justice so slow? The Judiciary needs to prioritize some cases in national interest. This matter affects all Zambians.

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  6. PF lies never seem to amaze, we wouldn’t have know about those sick miners and their children if not for this report. Give the receivership to someone who knows what they are doing. Everyday cadres sing of how hh sold the mine here you are failing to manage a simple mine, putting us in more debt and jeopardizing miners and their families’s health. There is zero accountability on the part of this lungu, he is simply dishing out contracts to fellow cadres in the end only cadres and pf benefits which is not supposed to happen. Pf’s corruption is sickening and who ever supports them deserves to burn in he$$. We getting tired enough is enough

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  7. chalipwa bashi mwana no more turning back KCM is for Zambians you failed to run the company what are saying,you are the causer all of this mess. You used give workings 0% as increament for almost 3 years plus.
    Forget about KCM even the figures you are giving during your tenure is false.

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  8. You used to give 1% as salary increment were on Earth,Vedanta took advantage of Zambians. Please who ever is sympathsing with this Vedanta is not Zambian.This is not politics but issues dealing with the life of miners and one can lie to us miners we have suffered a lot in the hands of this crooks.

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  9. Isn’t it strange to keep a tax system that creates liabilities for the country? US$160 million owed to an investor who we thought came to help us lift the burden from off our shoulders. If the current Finance Minister did not play to please the so-called business community, come January next year Zambia’s treasury would have started looking good. You remove windfall tax, you don’t want sales tax, how will you get sensible cashflows from mines? India, the 6th largest economy in the world is tipped by the IMF to become the second-largest economy by 2024. Next year it will dislodge the UK from the 5th position. India uses sales tax, USA uses sales tax, Canada, Japan, Australia also uses sales tax. To be great imitate the great, simple logic.

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