Zambia’s largest copper mine has successfully avoided liquidation as its parent company injects $1 billion in cash, thereby concluding a lengthy legal dispute, the government announced on Tuesday.
Vedanta, a company listed on the London Stock Exchange, holds the majority ownership of Konkola Copper Mines (KCM), Zambia’s largest copper mining entity. KCM has been embroiled in a prolonged standoff with the government.
The state-owned ZCCM-IH is a minority shareholder in KCM.
In 2019, the Zambian government initiated liquidation proceedings against KCM, alleging violations of its operational license and tax arrears. This action triggered a protracted four-year legal dispute between the government and Vedanta.
The liquidation process of KCM has been brought to a halt, and Vedanta, as the majority shareholder with a 79.4 percent stake, will continue to operate the mines, as confirmed by the government.
“The KCM board will be reinstated and Vedanta Resources Limited will return to its previous role as the majority shareholders,” the country’s mining minister told a press conference in Lusaka.
The firm will enjoy “a renewed financing commitment towards investment in mine development and to increase production,” mining minister Paul Kabuswe said.
Zambia ranks as Africa’s second-largest copper producer, trailing only behind the Democratic Republic of Congo. The copper industry plays a significant role in employment within the country.
Vedanta, a London-based mining company, has announced its commitment to invest in the development of KCM over the coming five years.
Vedanta has further committed to an annual investment of $20 million in the local mining community.
In 2015, approximately 2,500 villagers initiated legal action in London, lodging a claim against KCM. They alleged that toxic pollution resulted from water discharged from KCM’s Nchanga Copper Mine, which is located in Zambia’s central Copperbelt region.