Billionaire Anil Agarwal’s Vedanta Resources Ltd. and state-owned ZCCM Investments Holdings Plc have put an end to their long-standing disputes regarding a Zambian copper mining complex, bringing a resolution to a four-year legal battle over its ownership.
The controversy began in 2019 when the administration of former President Edgar Lungu placed Konkola Copper Mines under provisional liquidation, alleging that Vedanta had deceived them about expansion plans and evaded taxes. This initiated a series of legal battles that continued into President Hakainde Hichilema’s term, as he sought an amicable resolution.
In a statement, ZCCM-IH announced, “All disputes between the parties have been resolved and all proceedings relating to the disputes will be withdrawn with each party bearing their own costs.” Consequently, the KCM board will be reinstated, and Vedanta Resources Ltd. will return to its previous role as the majority shareholder of KCM.
This development is significant for Anil Agarwal, who has been fighting to regain control of Konkola, and it also holds potential benefits for the Zambian government. Vedanta has pledged to invest $1 billion over five years to complete an expansion, aligning with the global rush to develop copper assets for electric vehicles and renewable energy needs.
As part of the agreement to regain ownership and control, Vedanta has committed to:
•Paying $250 million to Konkola’s local creditors.
•Allocating $20 million annually through a trust to support local communities.
•Implementing a 20% pay increase for workers.
•Providing a one-time payment of 2,500 kwacha ($121) to all employees.
This deal could play a pivotal role in revitalizing Zambia’s crucial copper industry, which the government expects to see production drop to a 14-year low in 2023. President Hichilema’s administration aims to boost national copper production to 3 million tons annually by 2031, nearly quadrupling last year’s output.
Before the liquidation process began, Vedanta held a 79.4% stake in Konkola, with the state-owned company owning the remaining shares. The transition period for Vedanta to assume operational control of Konkola is estimated to take around three months.
Reinstating Vedanta as Konkola’s majority shareholder is seen as a significant step forward, according to Pushpender Singla, director of the company’s zinc unit. The government will also reinstate its golden share in Konkola, granting it veto rights over the company’s decisions.
Minister of Mines Paul Kabuswe stressed the importance of maintaining high standards at Konkola and avoiding the issues of the past, particularly concerns related to promised investments. He stated, “History must not repeat itself. We want world-class standards”.