After years of protracted negotiations, Vedanta Resources Limited has been handed back the operations of Konkola Copper Mines (KCM) on the Copperbelt with the mining firm pledging to invest over US$1billion in the development of the mine.
Vedanta also pledged to pay off the US$250million owed to all the local creditors of KCM and make a further investment of US$20million into local community every year through a special purpose vehicle called a Community Trust.
Mines and Minerals Development Minister, Paul Kabuswe, announced the decision in Lusaka on Tuesday and said ZCCM-IH and KCM would bear own costs in the liquidation proceedings which had been under going for the last four years.
Kabuswe said on September 7, 2022, ZCCM-IH, Vedanta Resources Limited and KCM provisional Liquidator entered into a written agreement to suspend the hearing of the dispute between the two parties and pursue amicable settlement.
“The parties engaged in discussions to resolve the disputes and have reached a significant milestone. As part of the resolutions, all disputes between the parties have been resolved and all proceedings relating to the disputes will be withdrawn with each party bearing their own costs,” he said.
Kabuswe said consequently the KCM Board would be reinstated and Vedanta Resources Limited would return its previous role as the majority shareholder of KCM based on several set out conditions.
He said additionally government’s golden share had been reinstated as a safeguard to ensure the asset was protected.
“In this regard, the parties are working towards concluding revisions to the shareholders’ agreement and the implementation agreement on new terms as stated, which agreements will ne legally binding on the parties to ensure that the renewed commitments are fulfilled,” Kabuswe said.
Pushpender Singla, Executive Director and Chief Financial Officer of Vedanta Zinc International South Africa, reaffirmed the mining giant’s commitment to run KCM boldly and with an ambitious vision to recapitalize the asset.
Singla said the reinstatement of Vedanta Resources to run KCM is a substantial step in the right direction.
“The Company’s dynamic portfolio globally follows a history of consistent geological discovery, technological advancement, and sustainable development with a business model focused on growth, expansion, and value creation for the shareholders, and a positive impact on the community,” he said.
Singla said apart from making the announced investment, Vedanta Resources Limited will allow offer of a 20 percent increase in salaries for employees and make a one-off K2500 payment to all employees.
“The negotiations with all the stakeholders in the dispute may have taken a little longer than initially anticipated, this was necessary for the benefit of all parties and the entire country as we needed to take care of all salient points in this agreement,” he said.
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