Zambia’s Minister of Finance, Dr. Situmbeko Musokotwane, has come under fire for failing to provide a pathway for Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH) to recover $2.3 billion owed by First Quantum Minerals (FQM). The debt was incurred after an audit revealed that FQM had illegally externalized revenue from Kansanshi Copper and Gold Mine without board approval.
In 2016, ZCCM-IH filed a legal suit against FQM to recover $2.3 billion, and also filed a notice of arbitration in London. ZCCM-IH, which holds a 20% shareholding in Kansanshi Copper and Gold Mine, was seeking a payout of $1.4 billion from this money, which included its principal share of $570 million, a tax liability of $260 million, and interest of $228 million, among other claims.
However, in December 2022, Dr. Musokotwane announced that ZCCM-IH had been directed to drop these recovery court cases, and the State had engaged the Director of Public Prosecutions to discontinue criminal charges pending against FQM directors. Instead, a deal was struck to convert ZCCM-IH’s 20% shares to an annual 3.1% royalty payment.
This decision has drawn criticism from former Zambian ambassador to Ethiopia, Amb. Emmanuel Mwamba, who has called on the Minister of Finance to explain when FQM will pay ZCCM-IH the $2.3 billion owed. According to Mwamba, the funds are urgently needed to run both KCM and Mopani Copper Mines, and the government should be focused on helping ZCCM-IH recover the debt rather than seeking foreign investment or returning the discredited Vedanta.
The failure to provide a pathway for ZCCM-IH to recover the debt owed by FQM has raised serious concerns about the government’s commitment to holding corporations accountable for their actions. The lack of transparency and accountability in this matter could have far-reaching consequences for Zambia’s mining industry and its economy as a whole.