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Zambia has agreed to end legal action against billionaire Anil Agarwal’s Vedanta Resources Ltd. as President Hakainde Hichilema seeks to revive mining output in the southern African country.
Vedanta’s Konkola Copper Mines was placed under provisional liquidation in 2019 after the previous Zambian government alleged that the company had lied about expansion plans and paid too little tax. KCM denied any wrongdoing. Now Hichilema is seeking to attract investment to one of the world’s biggest copper producers by repairing damaged relationships with mining companies.
Any solution at KCM has to include Vedanta, which remains a co-shareholder in the operation with the government, Hichilema told reporters at the Investing in African Mining Indaba conference in Cape Town on Monday.
“Vedanta and ourselves agreed that we suspend litigation, by-and-large as a partial way of resolving the matter,” he said. “The outcome I wouldn’t predict, but there will be a resolution of Konkola Copper Mines.”
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Rebooting production at KCM is central to Hichilema’s ambitions to raise annual copper output to about 3 million tons in a decade, from about 800,000 currently.
Vedanta reiterated in December that it was ready to invest about $1.5 billion in reviving KCM and making it a world-class asset, while warning that the mothballed operations are on the verge of collapse.
Hichilema said his government will seek to end “excessive litigation” in mining after former President Edgar Lungu’s administration took an increasingly aggressive stance with the industry.
The president’s investment drive received a boost this week after First Quantum Minerals Ltd. approved a $1.25 billion project to expand its Kansanshi copper mine in Zambia.
The government’s overtures toward Vedanta may make it easier for Zambia to find a buyer for Mopani Copper Mines Plc, which it recently bought from Glencore Plc. Selling those assets is less complicated than resolving the challenges at KCM, and potential buyers are being sought, said Hichilema.
(By Felix Njini and Mike Cohen)
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