The Zambian government expects to conclude talks with potential buyers of Vedanta Resources Ltd.’s local copper unit within a month, President Edgar Lungu said.
His comments preempt a hearing by Zambia’s High Court on Thursday on the state’s bid to liquidate the asset after a dispute between the government and the Indian company.
The stand-off has rattled investors, with yields on Zambian Eurobonds surging to new records last month.
The government received expressions of interest for the unit, Konkola Copper Mines, from companies based in Turkey, Russia, India, Canada and China, President Lungu said in an interview Wednesday.
He didn’t identify the firms.
“The team which we have put up is interrogating all these companies to see whether they can fit, meet our expectations,” President Lungu said on the sidelines of a conference in Maputo, Mozambique’s capital.
“I think it’s going on very well. By the end of this month, towards the midway next month, we should wrap up in terms of talking to the would-be investors.”
Zambia’s government moved to liquidate Konkola after President Lungu accused the company of cheating on its taxes and lying about its expansion plans.
Vedanta, majority owned by Indian billionaire Anil Agarwal, says it’s a loyal investor that has spent $3 billion on the operations.
The liquidation doesn’t amount to nationalization, and the government stepped in because the company had failed, said President Lungu.
Vedanta reported a $165 million operating loss at Konkola in the year through March. Still, the company valued the assets at about $1.6 billion in its most recent annual report. The government is eager for a private investor to take over because running the loss-making operations would be a drain on an already strained state budget.
“We can’t afford keeping that thing because it’s very expensive and obviously we don’t want government to get strapped in there and get stuck,” said President Lungu. “We want to do this expeditiously and within the law.”
President Lungu also said the government would consider revisiting mining taxes opposed by producers if they proved the levels are too onerous. Konkola, along with units of Glencore Plc and First Quantum Minerals Ltd., is among copper miners that have been affected by higher mining royalties introduced this year, in addition to other tax increases.
The country’s mining-lobby group has warned the government the tax hikes could result in Zambia’s copper output, the second-biggest in Africa, falling by as much as 100,000 metric tons this year from a record 861,946 tons in 2018.
“They always grumble, but I think if they make their case we will hear them,” President Lungu said. “But for now, they’ve not made any case to warrant us reversing our position on the tax regime. We are not convinced.”
The government is a minority shareholder in most of the country’s mines and wouldn’t want to smother them with taxes, Lungu said. Some companies have threatened to shutter shafts and fire hundreds of workers because of the tax increases. At least one — First Quantum — backed down. Still, only two of the country’s five copper smelters are currently operating, though not all the owners have cited the new taxes as the reason for shutdowns.
“Every time we’ve tried to raise our share of tax they’ve always come up with their prophesy of doom, all the time,” said Lungu. “They will put up a fight but we want to get our fair share of tax without killing the industry.”
Bloomberg
Go for it Grz
We will be witnessing another grand showing of corruption with the KCM saga.
For those of you that aspire to be corrupt like Lungu, this is a perfect case study. Take notes.
Zambians are more interested in firing thug Bowman Lusambo than Argwal.
If you parade Bowman and Vedatta Argawal before PF hyenas, hyenas will pounce on Bowman.
To state that the sale will be concluded in July is being over-ambitious. End of July is only days away. The court process is still at preliminaries. Aggrieved parties have the right of appeal up to Supreme Court and Concourt. So this is going to be a long haul flight. I shudder to see a court process which is a sham. Otherwise, Zambia should brace for hostile international reactions
There is yet an arbitration case to go, how can the GRZ start thinking of selling KCM off now? REALLY??
This thing will blow up and cost us a lot.
I supported the GRZ decision, up until I saw who was on the list of liquidators and current steps being taken, makes me re-think my thumb up and soon I will withdraw completely.
Make sure you don’t just chose a good buyer but also make a good deal this time. Once bitten, twice shy. We can’t afford to sell our resources don the river again.
@Nine Chale. It will probably be case since the current political crop can afford it.
Why does this lazy moron Edgar make off the cuff statements abroad and on the tarmac ….why doesn’t he host a press conference at State House? Who is going to choose is there a team of technocrats assessing the interests? Why has he not said anything…is he waiting to offered bribes.
Wondering this same too.
‘the’
Yet they are the first ones to cry abuse of social media yet he is there revealing important information abroad…when ZWD states that State House has chosen the Chinks through corruption whose not going to believe them?
It’s clear to LT reporters that he only makes such statements while on the tarmac, automatically they pick whichever picture from the Tarmac and publish it as if it captured while he was abroad.
Message from LT is clear:
Ladies and gentlemen….here is the tarmac news !!!
Am certain pockets have been stuffed to the toes by now, just wait for the name.
Jona & his P.F Bandits are NOT going to look for the best deal that will benefit Zambia, but investors who will line their Corrupt pockets, & subsidise P.F’s Ubomba Mwibala stinking campaigns, chapwa!
That’s all Chagwa (The Fallen) thinks of before he goes to bed, & as soon as he wakens.
You wonder where ZCCM is on all this as there is no CEO appointed yet…everything i going through State House ..these foooools never learn!!
DON’T CHEAT THE ZAMBIAN PEOPLE THAT THERE ARE BUYERS FROM ALL THOSE COUNTRIES LISTED.
I’M 110% CERTAIN THAT THE BUYER IS A CHINESE COMPANY.
THE SAME THING HAPPENED TO SRI LANKA AND THE SEAPORT OF HAMBANTOTA.A CHINESE COMPANY AND EXIM BANK TOOK OVER THE PORT.
EXCHANGING CHINESE DEBT FOR OWNERSHIP IN THE KONKOLA MINE.
THEY CALL IT DEBT DIPLOMACY.
@ Independent
You are very s1lly chap. Your comments resonate of someone who is lacking something in life and wants to offload their frustration on innocent people. You cant always be negative about your own country. I wonder why even bother smearing date here if indeed you know you can make it elsewhere. Go and tell your HH the reasons why Zambians dont trust and endorse him maybe you will start seeing things differently.
Malinso – instead of barking in the distance like a puppy why dont you put your point across why you disagree with the bloggers post…no one wants to hear about your silly HH here!!
Malinso,
I actually think @Independent is right in her analysis.
I guess I must be s1lly as well.
It is good to see you folks have confidence in Lungu and his methods.
Good luck.
Good development there mr president, hope it won’t be sold to the Chinese
Do yo know what development is? You seriously think an investor would buy that inefficient mine where they are still using picks to and handheld machinery to dig to keep employment…plus there is a case there no investor would buy that mine till all is sorted.
This assumes that Vedanta will not contest the Liquidation in an International Arbitration Court. If the Case is heard in an International Arbitration Court it will ta?e a while to settle the matter. Meanwhile no new Foreign Investor will buy KCM Assets until this Liquidation is resolved. Time will tell.
The Chinese will want KCM .Because of the debt ,they may get it for free.
@ Mwape
Go to India and try start a business there and if you will given that opportunity, come and claim 1 million dollars from me.
Mwape is telling you the facts ..the same facts you were told when you were repossessing ZAMTEL from LAPGREEN only to be slapped with hefty fines!!
Imagine zoona the dullness of this man. Who told him court processes will end by July when they have hardly started??
Is Argwal your uncle. We as Africans need to not deal with India period. You are better of starting a business in the UK, Italy and China than India. They are just that bad as a people.
Mwape – You know that the Government can nationalize this mine and cut off all the arbitration nonsense? There would be some economic fallout but if they were then to offload it to the private sector quickly, this would fizzle out.
@abilima, take easy with that cr.ap you are spewing here !!
The nonsense is that you guys think the arbitration case decision can be made your local court or simply by GRZ nationalizing, but you are forgetting long gone are the days when most GRZ were acting at communist countries where you could confiscate or nationalize at will. Not even Pu.tin can do that anymore except locking up those shareholders on the pretext that the individuals were escaping payment of taxes.
Painfully, people like you are placing your hopes in him even going to an extent that you adore him as being a qualified lawyer, therefore, he knows what he is doing. Come on and GIVE US A BREAK !! I will leave the rest for your imagination.
@7.7 Dr. Mashamba in his article in one of the online publications has stated, among other things, that people like you who use titles like “general” when you have no idea even about a parade formation are i.diots – I rest my case. For your information, Zambia has nationalized mines before – I know reading and reading history may be hard for you.
@abilima,
Please, do not misquote Dr. Mashamba in your quest to prove your idi.ocy right. From nonsensical to idi.ocy !!!
Thank you Mr President. Personally, I have great confidence I you. I am pleased with the way you are handling this matter. Be assured of my support. Twasebana pafula.
Some of you would thank your sexy wives bosses for giving them overtime and out of town allowances for spending work weekends in Siavonga.
Thank you Mr President. Personally, I have great confidence in you. I am pleased with the way you are handling this matter. Be assured of my support. Twasebana pafula.
#yellowcard
For him this is all he is in it for, kulimonesha ta! Walking out of helicopters, staepping off Meredez Cars, campaigning at endless bye elections and most important of all to him dancing the nights away “na amahule” in Chawama and Mbabane.
SELL IT IN UNITS,KONKOLA=RUSIA,NCHANGA=CANADA,NKANA=TURKEY,NAMPUNDWE=CHINA/INDIA.BUT HAS THE JUDICIAL PROCESS BEEN EXHAUSTED??
The President knows what he is talking about. He is himself a very competent lawyer. He has taken all legal aspects into account. Personally I strongly support the president for this noble cause. Mr. President you really have my vote for this regard.
“Qualified competent Lawyer”???
My foot!! KAYA?
You Sichula like majority of Zambians duped by P.F have a short memory span of a Chicken.
Is this not the same Chagwa -(The Fallen), who advised his Ministers, & Officials to continue Illegally draw salaries after Parliament had been dissolved?
MPAKA LELO, THE ILLEGALITY CONTINUES, AS DESPITE BEING TOLD TO PAY BACK ILLEGALLY DRAWN TAXPAYERS CASH, NOT A SINGLE UBOMBA MWIBALA P.F GOON HAS RETURNED A SINGLE RED NGWEE!!
Please give it a rest Sichula, & enjoy your ill gotten corrupt kickbacks you get as a P.F. Cadre, for shouting the loudest, about Chakolwa being the Alpha & Omega of Corrupt Zambia!
Open Letter to Zambian Government
To the Political Parties /President Sir /Mining Minister/ Common Man of Zambia
As a common man who has earlier worked in great Country Zambia and in Mining sector , I am absolutely aghast by the current events around Mining Industry and specially how unfairly KCM is being treated . Below text of few words is hence my effort to explain the educated lot of what is Mining Industry and how it works so that multiple wrong perception can be cleared – Zambia is a great country and it has to achieve more heights – with wonderful people and sensible bureaucrats its important hence to take care of this Industry and assist them grow further. Any harm now would have far reaching consequences specially to Copper Belt Town and civilization around it . It’s a…
Let him go to drc .
It would be ideal if we can have as GRZ 51% and sell the 49%. This will ensure social responsibility is taken care off.
“….President Lungu also said the government would consider revisiting mining taxes opposed by producers if they proved the levels are too onerous…”
I can see lungu getting his swivel chair ready for another grand 360° u turn.
Trial and error governance.
All because corruption was the prime decider in spending All the borrowed money on construction.
No manufacturing. Now the need to squeeze the few large employers.
Fake News ? Not on ZNBC, not news!
Might then just give Pius Kasolo, his job back, he has been vindicated.
I’d say he better sue! Too much flip flop.
This Bloomberg also said China and Khazakh billionaires offered to buy……hope it was not Sacha Baron Cohen,’s Borat!!!
“Every time we’ve tried to raise our share of tax they’ve always come up with their prophesy of doom, all the time,” said Lungu. “They will put up a fight but we want to get our fair share of tax without killing the industry.”
I Hope when he is saying “…our fair share of tax…”, he means the “Zambian people” and not those PF thugs and friends
We need to introduce Company Law as a course starting from Grade 1 so that Zambians understand how Company Law works! There are better ways of maximizing revenue from mining! Shares, not just Taxes! We own no shares in most of these mines and in some we only own 20% or less shareholding! Do you think we can derive maximum benefit with a less than 50% Shareholding? We miss out as a country on Dividend Payouts. We don’t even participate in the day-to-day decision making on the operations of these mines. First we need to renegotiate the shareholding in all companies benefiting from our minerals. Tax alone will never be enough!
@Carlos,
Exactly, others are making decisions for you you either take it or you leave. Up until now, because GRZ was holding minority shares, those Mwenyes were making decisions, do you blame them? No!! You are absolutely right, let’s not be surprised if we own 20% of shares. If the PF thugs are not getting the blame why should we blame entrepreneurs? Let’s clean up the mess first. That is the reason I gave the GRZ my thumbs up, thinking they will learn from the past and follow normal procedures and bring the wealth to Zambians. Up until now, I am not convinced we are doing the right things
Of course Lungu will pick and choose on the basis of kickbacks for PF political campaigns.Kwarupchun business is big for this govt.
Go Green!! We have Some of the best land in the region, most of the fresh water in the region and fantastic climate. We are only dull not to reap from such resources. Can’t be talking about mining all our lives.
When did Plot One become Contracts and Procurement Specialists?
This KCM issue will come back to bite Chagwa and company!
The alleged unexpected resignation of AC tells us there is something we need to know!
We may find the new buyer but we can only hope that the price includes a potential compensation package because whether we like it or not, Investors who pumped their money into KCM using Vedanta need their money back! Don’t forget that!
Speed kills, the way Lungu is handling this issue leaves a lot of questions than answers. Moving too fast for your own good. You still have a pending issue of high mining taxes and court cases the new owner of the mine will have to consider. It’s hard to believe Lungu is a lawyer, that’s why he has no track record of success in the field except for stealing. If he sells this thing to the Chinese it’s going to cost him big time, because of those Chinese are not going to accept losing money and then pay higher taxes in the end. They will replace him in a heart bit
Not only that @China,
What these people don’t understand is that with the court cases pending and an INTERNATIONAL (Not Zambian) Arbitration case open, no fo.o.lish investor will offer a higher bid. They will need to factor in such risks. I am curious about how much they can sell it with this rush.
Zambians are getting the donchukubeba in their blood, and now we are witnessing it at the international level, thinking they can blindfold the investor and dispose of off KCM as soon as possible before the cases are heard. WRONG!!
Am suprised that all what these leaders think is selling and buying luxurious items,meanwhile they forget that the future still holds a generation to come and I pity that…
Vedanta will Never get a fair Hearing in Lungu controlled Courts. Vandeta should not waste time appealing in Zambian Compromised Courts. They should just defend their Rights in the International Arbitration Court and seek damages and compensation from the Corrupt Lungu Govt. Obviously the Chinese Investors want to takeover KCM and pay kickbacks from the Chinese. All Investors operating in Zambia are at risk of being Nationalised KCM. The Writing is on the Wall.
Well Carlos talking about owning shares and actually putting money in copper mining shares are two different things.I have faith in copper.It is an essential element in certain batteries.And with cars going electric copper is a sure bet.Peter Carlos Hinds.
These homosexuals in Barbados.Strongly believe that copper and gold mining is madness.But there is nothing mad about a big bank account.Plus as a veteran chemist.I would bet on metals any day.Peter Carlos Hinds.
It is said that king Midas.Every thing he touched turned to gold.And this Lungu.If every thing he touches turns to copper.Economically this is the next best thing.Peter Carlos Hinds.
He is not thinking straight, and not telling the truth. They won’t be able to sell KCM to anyone. As it stands right now it’s a hot potato no-one would like to put in his mouth. It would suicidal to put your money in a mine under commercial dispute. Does anyone remember chilanga cement dispute. In Ndola?! Lungu is not a judge and not also a good lawyer for that matter. He probably didn’t even read the conditions of the sale of the mine and dispute resolution. He has done it before! Remember government ministers remaining in office?
Let ZCCM-IH buy it
President Edgar Lungu deserves our support over KCM Liquidation and a quick replacement of the investor is the way to go. president Lungu has a duty and responsibility to the nation first and then to any body else, most importantly he has a responsibility to protect the interest of our people and should not wait for KCM to waste the peoples time to address crimes which they well know they committed at the expense of our great nation. It is stupid for some section of the society to presume that the move is wrong and will not benefit the people of Zambia; Maybe it is because you have not worked there and you don’t know how much the country has been loosing.
I agree the PF has made a lot of mistakes but if this is a right decision, then well, let us support it and ensure it works for the…