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