Vedanta Resources open to dialogue with Zambian government

28 May 2019 (Last Updated May 29th, 2019 18:40)

Vedanta Resources has announced its plans to open a dialogue with the Government of Zambia, as it aims to defend its legal rights and oppose the appointment of a provisional liquidator to complete the "winding up" of its Konkola Copper Mines (KCM) business.

Vedanta Resources has announced its plans to open a dialogue with the Government of Zambia, as it aims to defend its legal rights and oppose the appointment of a provisional liquidator to complete the “winding up” of its Konkola Copper Mines (KCM) business.

The court has adjourned the hearing of the legal battle between Vedanta and the Zambian government over the control of KCM until 4 June.

The government has alleged that KCM has breached its operating licence and has stressed for the liquidation of KCM.

This legal case  has raised concerns among international miners about a rise in resource nationalism.

Vedanta Resources CEO Srinivasan Venkatakrishnan  was quoted by Reuters as saying: “While Vedanta intends to fully defend its legal rights, we remain open to dialogue.”

“We hope to meet with the Zambian Government in the near future to discuss a mutually agreeable solution to the current situation as well as the broader challenges faced by KCM.”

Vedanta Resources is the majority stakeholder of KCM. It partly owns Vedanta group of companies.

According to Vedanta Resources, Zambia is “misusing” corporate law by urging the closure of KCM on the “basis of fairness and equity” rather than on grounds of insolvency, reported Reuters.

Currently, the provisional liquidator is responsible for day-to-day operations of KCM.

Milingo Lungu of Lungu Simwanza & Company was appointed as provisional liquidator of KCM.

“While Vedanta intends to fully defend its legal rights, we remain open to dialogue.”

KCM currently has 13,000 employees. Since 2004, Vedanta Resources has invested $3bn in the country.

Among these investments included on constructing one of the largest shafts in Africa to enable underground mining at Konkola mine, development of a new smelter at Nchanga, and two new concentrators.