Vedanta to exclude base metals business from sweeping demerger
The group said it will consider the base metals business demerger at a later stage.
Times of Zambia reports that the Zambian government is planning to increase its share of mining firms from 20% to 35% but is not planning a wholesale nationalization.
The website reported Mines Minister Wlybur Simuusa saying that the move is designed to encourage Zambians to participate in the running of mines owned by Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH).
“We want the ratios to be 65 per cent to 35 per cent. When that ratio was reported in the international media, I was told the market shares danced but I was surprised at the nervousness in the industry and the international community,” Mr Simuusa said.
State-owned ZCCM-IH represents the state in mining ventures via equity stakes. It currently holds investments in nine companies listed on its website, including a minority interest in Kansanshi Mining Limited, which is owned by Canada’s First Quantum Minerals (TSE:FM)(LON:FQM).
First Quantum announced earlier this week it signed a US$1 billion, five-year credit facility allowing for capital works at the Kanshanshi copper-gold project.
Reuters reported in January that Zambia wants to double the mining sector’s contribution to GDP to 20% from the current 9-10%, as a means of plowing more revenues from natural resources into government coffers. Copper is the economic lifeblood of Zambia and a key employer in the country of 13 million people.
Moves to heighten government participation in Zambia’s mining sector were accelerated with the election last September of Michael Sata, who campaigned on a promise to create jobs and to extract more money from the mining industry in Zambia, Africa’s largest copper producer.
Among the foreign companies with copper interests in Zambia are Vancouver-based First Quantum Minerals; Glencore International Plc; London-based Vedanta Resources Plc; and Barrick Gold, which owns Lumwana Mine, Africa’s largest copper mine, through its acquisition in 2011 of Equinox Minerals Ltd.
