Resolute Mining says it will pay Mali $160 million in tax dispute
The company’s shares in Sydney were suspended on Thursday, after tumbling 40% since news of the detention of CEO Terry Holohan.
Eurasian Resources Group and China Non-Ferrous Metals Co. expressed interest in buying Konkola Copper Mines, should the Zambian government succeed in seizing it from Vedanta Resources Ltd., people familiar with the situation said.
Eurasian Resources, owned by three Kazakh billionaires, approached the government about two months ago, according to the people, who declined to be identified by name because the information is private. CNMC also wanted to buy the assets, they said. The Chinese company offered to spend $2.5 billion on development, one person said.
At stake are copper mines and resources in one of the world’s richest deposits, which stretches from Zambia’s Copperbelt region into southern Democratic Republic of Congo. Zambia, cash-strapped and struggling to contain debt, says Vedanta hasn’t met its investment promises and paid too little tax, while the company says it is a “loyal investor” that’s spent more than $3 billion in the country since 2004.
The company valued the assets at $1.6 billion in its last annual report
“Many companies” are interested in taking over KCM, Zambian Information Minister Dora Siliya told reporters Wednesday. “People have flown into the country because they see the opportunity,” she said, without identifying them. “We just want the best partner for the people of Zambia.”
Eurasian Resources and CNMC, which already have copper assets in Zambia and Congo, declined to comment.
“KCM isn’t for sale from our perspective,” a spokesperson for Vedanta said by email. “While we remain open to dialog with the Zambian government, we will consider all options to preserve our legal rights.”
State-owned ZCCM Investments Holdings, which owns 20.6% of KCM, asked the Lusaka High Court on May 20 to liquidate the company because it hasn’t met the conditions of its license. The case, which is being challenged by Vedanta, was postponed to June 4.
Vedanta, majority owned by Indian billionaire Anil Agarwal, says the deposits could be mined for another 50 years. The company valued the assets at $1.6 billion in its last annual report. Agarwal, in a “personal message” published in the Zambia Daily Mail newspaper Wednesday, said the attempted liquidation of KCM “can only hurt the country’s hard-earned democracy and investor-friendly status.”
KCM’s flagship operation is Konkola Deep, which extends almost a mile underground and is one of the world’s wettest mines, with the equivalent of 140 Olympic-sized swimming pools’ water pumped to the surface daily. The ore bodies also contain cobalt, a prized metal used in rechargeable batteries that power mobile phones and electric cars.
(By Matthew Hill and Taonga Clifford Mitimingi)
