The Zambian government is moving ahead with the dissolution of jointly-owned Konkola Copper Mines (KCM) even as a court case with Mumbai-listed Vedanta Resources over its ownership drags on.
A bidding process for the mining giant is set to take place and could be completed “in the coming few weeks” and so far, nine companies have shown interest in taking over the firm. The companies interested in KCM are from Australia, Canada, China, Russia, and Turkey.
“The bidding process will start once all the companies have conducted due diligence and we are hoping this can happen within a couple of weeks,” Zambia’s Mines Minister, Richard Musukwa, said on Wednesday.
The legal dispute between the government and London-based majority owner, Vedanta, started in May when Zambia appointed a liquidator to run KCM (around 20 percent owned by Zambia’s state mining company and majority-owned by Vedanta). Zambia then accused its partner of breaching its license. In response, President Edgar Lungu vowed to dissolve the firm.
However, Vedanta has denied that accusation and has said it will defend its assets in Africa’s second-biggest copper producer. It sought an urgent order in South Africa and Zambia to prevent KCM from being dissolved, and Vedanta argued its case in a Johannesburg court on Wednesday.
Judgment on KCM is expected on July 23 in the High Court of Johannesburg. But Musukwa told reporters the bidding process would start before the verdict.
“As the court process is going on we have a lot of interested companies wanting to take over … In fact, there are nine,” Musukwa told a media briefing, adding that he was confident the government could win the case with Vedanta in any country in the world.
“We are very aware that the court processes are taking place but we have a government to run and our people to protect … We have a strong case and even if they took us anywhere on earth we will still win because KCM has abrogated on the license,” Musukwa added.
Zambia is Africa’s second copper producer after the Democratic Republic of Congo (DRC), accounting for 12 percent of GDP in 2016, according to the World Bank.
As the country grapples with growing debt, Lungu has imposed new taxes on mining for increased revenue. The leader has directed international mining companies opposing his fiscal policies to leave the country. Moreover, the Zambia-Vedanta case has reportedly intensified concerns among international miners about resource nationalism in Africa.