Vedanta Resources Ltd., owned by Indian billionaire Anil Agarwal, has announced that it is in “advanced stage” talks to regain control of the Konkola Copper Mines Plc in Zambia, four years after the Zambian government took over the mining complex. Vedanta issued a statement on Sunday expressing its commitment to the negotiation process, even though the talks have taken longer than initially expected.
The dispute over Konkola Copper Mines Plc began in 2019 when the Zambian government placed the company, of which Vedanta held a 79.4% stake, into provisional liquidation. Legal disputes between the government and the firm ensued, resulting in a prolonged and complex situation. Former President Edgar Lungu accused Vedanta of misrepresenting its profitability and future growth plans before initiating the liquidation process. Since President Hakainde Hichilema’s administration took office in August 2021, finding a resolution to the issue has been challenging.
During this period of uncertainty, production at Konkola Copper Mines Plc has decreased. Vedanta, in an effort to revitalize the operations, has committed to investing $1 billion in the assets, aiming to increase annual integrated copper production from 60,000 tonnes to 100,000 tonnes, with further potential to reach 200,000 tonnes in the coming years.
The decline in Zambia’s overall copper output has been partly attributed to the issues surrounding Konkola’s production. The country’s finance ministry reported that copper output is expected to drop to 682,431 tonnes this year, down from 763,550 tonnes in 2022.
As part of the effort to settle outstanding issues, Konkola Copper Mines Plc reached a debt settlement agreement with Zambian electricity provider Copperbelt Energy Corp. According to the agreement, KCM will pay the company $20 million in instalments.
While significant progress has been made in the talks between Vedanta and the Zambian government, Mines Minister Paul Kabuswe mentioned that there is still one issue to resolve before finalizing the contract. He expressed optimism, stating that the conclusion of the agreement is now a matter of days, rather than months.
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