Zambia should halt the search for a new investor in Konkola Copper Mines (KCM) until litigation with Vedanta Resources is settled, the Indian mining company said on Tuesday.
Zambia’s previous government put KCM in the hands of a liquidator in May 2019, triggering the ongoing legal dispute with Vedanta Resources, KCM’s parent company.
The government accused Vedanta of failing to honour licence conditions, including promised investment. Vedanta has repeatedly denied it broke the terms of its licence.
KCM provisional liquidator Celine Nair said on June 7 that the company would appoint an adviser to help it to find an equity investor willing to fund the mine’s expansion.
But Vedanta Resources spokesperson Masuzyo Ndhlovu told Reuters on Tuesday that no investor could buy the mine and smelter complex without the consent of Vedanta.
“Significant efforts to sell KCM to other companies were made previously, but these efforts failed,” Ndhlovu said in a written response to Reuters questions.
Mines Minister Paul Kabuswe and the government’s mining investment firm ZCCM-IH declined to comment on the matter.
“Due to the ongoing court action, ZCCM-IH is constrained to comment on the matter,” ZCCM-IH spokeswoman Loisa Mbatha told Reuters.
Vedanta would not participate in KCM’s eventual open tender to select a new investor, Ndhlovu said, calling it “illegal”.
An arbitration hearing in London is due to take place in January 2023.
Vedanta had hoped discussions with the government and ZCCM-IH, could culminate in an amicable settlement, Ndhlovu said.
“Continuation of further legal proceedings will cost a lot to Zambia and also KCM assets continue to deteriorate with no funding available,” Ndhlovu said.
Vedanta has offered to step up investment in KCM if it resumes control of the business.
(By Chris Mfula; Editing by Helen Reid, David Goodman and Louise Heavens)