Anil Agarwal’s Vedanta Resources Ltd. and Zambian government-owned ZCCM Investments Holdings Plc (ZCCM-IH) have resolved their disputes over a Zambian copper mining complex, according to a Bloomberg report.
The Zambian Konkola Copper Mines (KCM) were placed under provisional liquidation in 2019 by the Edgar Lungu administration.
Vedanta was accused by the establishment of dishonesty regarding expansion plans and tax payments, initiating a series of legal battles.
Lungu’s successor, President Hakainde Hichilema, ended the four-year legal battle between the parties, proceedings relating to the disputes will be withdrawn, with each party bearing their own costs.
An official statement further added, ‘KCM board will be reinstated, and Vedanta Resources Ltd. will return to its previous role as the majority shareholder of KCM.’
The resolution is a significant victory for Mr Agarwal, who has been battling to regain control of Konkola.
Before the liquidation process began, Vedanta held a 79.4% stake in Konkola, with ZCCM-IH owning the remainder. The transition period for Vedanta to assume operational control of Konkola is expected to take about three months, according to ZCCM-IH Chairman Kakenenwa Muyangwa.
If Vedanta follows through on its commitment to invest $1 billion over five years to complete an expansion, it will be beneficial to the Zambian government and could go a-ways to contribute to the revival of Zambia’s copper industry.
Zambian government projects that copper output will reach a 14-year low in 2023. Hichilema’s administration aims to achieve national production of 3 million tons annually by 2031, nearly quadrupling last year’s production.
Zambian government will also re-establish its golden share in Konkola, granting it veto rights over the company, announced Zambian Mines Minister Paul Kabuswe as part of the deal.
Mr Kabuswe said, ‘History must not repeat itself’ at Konkola, adding, ‘We want world-class standards.’
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