Tuesday, June 25, 2024

The Envisaged Come Back of Vedanta Mineral Resources

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By Thierry CHARLES

For some time we have seen organisations as such miners’ trade unions, Advocates for National Development and Democracy (ANDD), the Zambia for Unity, Peace and Development (ZUPED), Life Giving Word Ministries Bishop ELLISON BWALYA campaigning for the speedy return of Vedanta. It is necessary to look at the past in order to prepare for the future. Vedanta’s liabilities are very heavy, safeguards and minimum conditions will have to be put in place to prevent history repeating itself so that the interests of the country, the miners and ZCCM-IH are permanently secured.

1 The liabilities of Vedanta are very heavy

1.1 Vedanta is the first and foremost responsible for the decay of KCM

Long before Milingo Lungu’s mismanagement of KCM during liquidation, the mine was already in dire straits. In February 2014, former Vice President Guy Scott was already expressing concern about KCM’s dire situation and a real risk of bankruptcy.

KCM may have externalised huge amounts of money- Guy Scott

1.2 Vedanta manage KCM any old how

Already in 2013, isolated miners had warned in the press about Vedanta’s catastrophic operation of KCM. They warned of the coming bankruptcy : « This is only the beginning of worse things to come because the Indians have failed to run this very viable mine properly. » « We don’t know why the government has failed to see that KCM is a disaster in waiting. », « It is a time bomb and if the government doesn’t want to do something about it, they will be caught unaware », « The entire company will close as the so called investors don’t even have an idea of how to run a mining company. » « The indians are just buying time. This will be another BINANI disaster that the Indians brought to Luanshya. »

KCM – a disaster waiting to happen?

Subsequently, we learned from the press that rockfalls were taking place at KCM, proving that the usual and customary mining was not respected at KCM. Thousands of kilometers away, we understood that things were not going well at KCM.

It is therefore surprising that the miners’ unions, so close, which are now in favour of Vedanta’s return, did not immediately relay and support much more forcefully the serious warnings and alerts since 2013 to prevent the bankruptcy already anticipated and announced by some of their members…

1.3 Vedanta boss Anil Agarwal mocked and ridiculed Zambia

Speaking to shareholders at the Jain International Trade Organisation in Bangalore, India, 2014 March 22–23, Vedanta Chairman Anil AGARWAL stated about KCM : “It’s been 9 years [since we’ve owned the company], and since then every year it is giving us a minimum of 500 million dollars, plus one billion dollars, every year it has been continuously giving back.”

Anil Agarwal also explained in detail how he came to buy ‘the largest copper mine in Africa’ at Konkola, mocking and ridiculing Zambia and late President Levy Mwanawasa for selling Konkola Copper Mines for a song i.e. only $25 million rather than the $400 million asking price.

Video of Vedanta Boss Saying KCM makes $500 million profit per year

Just one year after the acquisition of 51% of KCM, the prestigious Morgan Stanley Bank valued this share at $1,321 million !! (Financial Records in 2015)

1.4 Water pollution and poisoning of surrounding villagers by KCM

ZAMBIA: Vedanta compensates more than 2,500 victims of mining pollution

In an English court ruling, 2,500 residents , including 643 children, of the villages of Shimulala, Kakosa, Hippo Pool and Hellen, near the Nchanga copper mine, were found to be victims of pollution and poisoning generated by the Vedanta-run KCM operation. The six-year court case was initiated in 2015.

1.5 Former mines Minister Richard Musukwa labels Vedanta ‘criminal’

 

KCM dispute shows no signs of easing after Musukwa labels Vedanta ‘criminal’

Despite our requests as shareholders of ZCCM-IH, we have never had access to KCM’s audits. But the former mining minister’s particularly strong words about Vedanta prove that the company’s actions have been particularly bad for KCM and the country.

2. Three minimum conditions for a peaceful come back

2.1 Transparency of agreements with Vedanta

Obviously, the agreements with Vedanta should not be hidden, but should be made transparent to the Zambian people. Opacity would create doubt and suspicion as the PF accused the UPND of being funded by Vedanta during the last presidential campaign.

2.2 Establishment of draconian oversight and protective safeguards

2.2.1 Regular, thorough and publicised audits

Following 2014 revelations (cf I.3), many voices were being raised to nationalize the mine. In a Ministerial statement to Parliament on June 27th 2014, former PF Mines Minister Christopher Yaluma said “Government should not take over KCM as doing so would mean nationalisation which would be against Government policy of having a private sector driven economy. (…)

“Government shall penalise any fraudulent mining company to prevent loss of the much-needed revenue and save jobs. Government will be undertaking regular audits at all the mines to ensure compliance and avoid the recurrence of the situation at KCM”.

In the face of this scandal, Mr Yaluma had to initiate a forensic audit of KCM under the pressure of public opinion and former Veep Guy Scott but he categorically refused to make it public.

He had simply outlined the main points without any possibility for the minority shareholders of ZCCM-IH and the Zambian people to read the audit. So it was buried and KCM’s situation got worse…

This must never happen again. The GRZ should formalise regular multi-year audits through ZCCM-IH or a specialised company to thoroughly check KCM’s accounts and the actual commitment of the promised investments. This will enable the GRZ to take immediate action in the event of noncompliance.
These audits must be made public.

2.2.2 Real control of production by the GRZ

Since the privatisation of the mines, successive GRZs have never really controlled the production of the mines nor the copper or cobalt content, although this is their duty and responsibility. For copper production, it relies on the figures of the Chamber of Mines. There needs to be real and thorough control in each mine.

2.3 Vedanta has to write off KCM debts

KCM has debts to Vedanta. If these debts remain on the books, the financial problems will continue and it will take years for KCM to get back on its feet. Anil Agarwal bragged to his shareholders that Vedanta had made billions of dollars on the backs of KCM and Zambians (cf I.3). At the same time, KCM was officially in dire financial straits (cf I.1).

This is why the cancellation of KCM’s debt is a sine qua non for a peaceful and above all rebalanced agreement for Zambia.

We suggest that our recommendations be taken into account for the benefit of Zambians and all stakeholders.

The Author is the Spokesperson of Minority Shareholders of ZCCM-IH

22 COMMENTS

  1. Has he reformed? What new things is he going to bring? Why is this government so intent to bring him back. Looking at some of the points in the article, one can see that this is poison and only a person on the suicide path can even think of touching it.
    Claims that the seizure of KCM was mishandled are one sided with a view to woo more sympathizers for the move by the current government to return the mine to this man.

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    • You PF rats don’t understand………

      KCM can not be sold, or run by any other entity in peace ……….

      Vendetta have strong legal claims on that mine.

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    • #Spaka. Surely can I expect anything else from you other than shallow biased reasoning.? You forget that when your man in state House went to RSA for some book told us that they and Vedanta had resolved the issue out of court? If they had done that, why all these maneuvers and misinformation? Why can’t Vedanta come back without all the lies from groups that have been bribed to convince interested parties. My hope is that if the deal goes sour you won’t blame the PF Rats.
      Like I said, has he changed. I am and have been on site.

    • 1. Zambia is obliged in providing a strong, clear and predictable guarantee of legal protection for investors – is fundamental to reinforce investors’ confidence and to mitigate perceived reputational risks as an investment host state. Zambia is also a sovereign that can change the laws if sees that investors are disadvantaging the nation. In the Western nations, direct investment & business laws or legislation are constantly being revised and updated to tighten and flash-out scrupulous investors such as KCM Bandits.

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    • 2.The frequent change of laws in the western nations is done to keep a balance as the business world keeps changing at the speed of light. But mostly to protect host nations from being abused by investors. We are trapped with old laws due to incompetent MPs who have no iota how to propose a Bill or Amend Laws. The majority of our legislators in parley are just praise singers. Some of the shenanigans going on just requires to change the laws, meaning the people have spoken.

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    • Independent Observer. Our MPs don’t know that they are there to make laws and not to scramble for CDF. That’s all they know.

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    • 3. Meanwhile, this is a rabbit hole. The president is trapped in this endless riddle. What HH says in front of the unemployed youth in the Copperbelt is completely different from what he says behind the doors with the KCM owner. Put simply, UPND benefited from financial support for campaigns before getting to power. This Indian man has squeezed his hands on HH’s throat. KCM has committed endless crimes

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    • # INDEPENDENT OBSERVER
      That is a bullseye analysis and the whole truth about our MPs. As usual you don’t disappoint……..

      # Deja Vu
      kikiki..kikiki Ati scramble for CDF. Very true that is all they know….. UPND is really disappointing the nation……..

      # Tarino Orange is now schooling UPND almost everyday in his comments……

  2. Our plan, had we remained in power, was the indigenization of our mines. Giving ownership to indigenous Zambians. Unfortunately some f00Iish Zambians were too gullible to fall for lies by that imperialists chola boy hh

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  3. It’s not being intent on bringing back Vedanta to run KCM. The bitter truth is that Vedanta never left because it holds controlling shareholding. But it’s possible to renegotiate the agreement that allows Vedanta to mine in Zambia. The reported illegal externalisation of money must be investigated because there are time-honoured conditions under which a limited liability company can send money abroad. In other words, what was it paying for? The usual suspects are management fees and shareholder loans with crazy rates of interest. ZCCM-IH has the right to know all these things.

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  4. I agree with Spaka here, apart from Vedanta, who will want to take up the many possible liabilities waiting for any would be investor including a pending court case? Let us be real here Vedanta are on the ground and are ready with a huge lump sum in excess of a Billion USD to reinvest and already have experience curves with Zambia. Let common sense prevail and give this mine to Vedanta, but they better be paying the mineral royalties as per agreement.

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    • #2020 Vision. Liabilities? Why would Vedanta come back to liabilities? Ramcoz owners never came back and liabilities like NPF, Mukuba Pension, Suppliers have disappeared with time. Logically I don’t see why Vedanta would be so desperate to come back instead of continuing with the court process where they could have been awarded large sums of money. My friend there are more questions than answers.

    • Common sense will tell you vendetta are not desperate to come back and have been waiting to see who blinks first…….GRZ of them……

      KCM is still a viable mine , that is why vendetta are still intrested, so are other parties , but……….

      Vendetta has legal claims and no other party would want to get caught up in………..

      Vendetta are also pragmatic business people and know pursuing a court case could take decades with 50/50 chance of getting what they want………..

      Making a comeback would be better business sense………

  5. It’s only corruption that will bring back Vedanta. How can a sober government even sit to negotiate with such a criminal institution? They’re supposed to be prosecuted for all those breeches and many more not mentioned here. The UPND must also be investigated to verify the allegations that Vedanta funded their campaigns. It might the reason they seem not to have a strong stance against the Indians. They’re testing the depth of the water with both legs!

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  6. This is the backwardness of some people in Zambia. It is like we have no patience to learn how one can produce twenty bags or more from a lima just like mining Where we were failing to make K500M and somebody does, we feel jealous instead of learning how. Even at Nkana Mine, Zambian said that we had no shovels. Those who came with shovels, made millions.
    Democracy is about change of altitudes for the better as we change politically.

  7. #Spaka Common sense will tell you vendetta are not desperate to come back and have been waiting to see who blinks first…….GRZ of them……
    Slowly you are admitting that you are a dimwit. Vedanta has got some unfinished work somewhere between Chililabombwe and Chingola. I can assure you as soon as he gets that he will bolt. KCM mines are old fashioned and not easy to operate…as compared to modern mines in NWP. Otherwise investors would have been falling over each other to buy it. Of course you can’t understand what I am talking about.

    • “..Vedanta has got some unfinished work somewhere between Chililabombwe and Chingola. I can assure you as soon as he gets that he will bolt…..”

      And you , a supposed read person, thinks vendetta would be allowed toine elsewhere after the KCM
      saga ??

      The only reason vendetta is still mentioned in zambia is they have a legal claim over KCM and they are business men , they know they still can make money from KCM……

      HH and the UPND had their funding sorted long before vendetta………

      UPNDs revenue streams are intact and safe from external interference……….

  8. # Spaka UPNDs revenue streams are intact and safe from external interference……….

    Time will tell.

  9. Where are billions of kwacha realised from the sale of all mines (zccm) and all other parastatal companies? Vedanta again?

  10. You don’t need a genius to realise the damage Vedanta has caused to KCM.
    The problem here is that of patronage.Vedanta need to be placed exactly where it rightly belongs-the dust bin.

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