Zambia-Vedanta row escalates, minister calls company “criminal”

Konkola Copper Mines (KCM) is Zambia’s largest copper producer. (Image courtesy of Wikimedia Commons)

Zambia has escalated its attacks on miner Vedanta, owned by Indian mining magnate Anil Agarwal, saying the company has been involved in criminal activities, including underpaying taxes and breaking investment promises.

“Zambia is a victim and it needs support,” mining minister Richard Musukwa told delegates at African Mining Indaba in Cape Town, the continent’s largest gathering of professionals from the resource extraction sector. “We deserve African and international support to make sure Vedanta pays the price.”

Zambia claims Vedanta owes unpaid taxes and had broken investment commitments

He was referring to a bitter row with the mining company that broke out in May 2019, when the African nation’s government mining vehicle, ZCCM, sought the liquidation of Vedanta’s Konkola Copper Mines (KCM).

At the time, Zambia accused KCM — the country’s largest copper operation — of breaching the terms of its licence and owing money in unpaid taxes, charges the company has denied and is fighting through international arbitration.

Soon after seizing control of the mine, which has a productive capacity of about 100,000 tonnes of copper, Zambia said it had interested buyers, including China Nonferrous Metals Co. and Eurasian Resources Group. But it seems like the ongoing dispute between Vedanta and the country has put off bidders.

Additionally, a landmark suit against Vedanta involving almost 1,900 Zambian villagers got underway this week. The group, who is suing the miner for environmental damage allegedly caused by KCM, will have to prove that the company can be held responsible for the actions of its Zambian subsidiary.

They will also have to bring KMC to the proceedings, which could be difficult as, at least provisionally, the company is not connected to Vedanta.

A ruling favouring the claimants would be a landmark decision that would set a precedent likely to have consequences beyond the UK.