THE contentious issues surrounding Konkola Copper Mines (KCM) have triggered varying concerns, as rallying calls for Vedanta Resources Limited to return to the giant mining firm intensify amid plummeting business opportunities on the Copperbelt and other areas.
Many interest groups, including trade unions, civil society, suppliers and contractors have cried blue murder over receding business opportunities in Chililabombwe, Chingola, Kitwe and other areas occasioned by under-performing mining firms.
In June 2019, the government placed KCM under liquidation and forced Vedanta out of the investment while in January 2021 the government, through ZCCM-IH, acquired 90 per cent shares in Mopani Copper Mine as Glencore International exited the deal.
However, Vedanta challenged the action through a protracted legal process until after the United Party for National Development government opted for out-of-court negotiations which are currently on-going.
In an interview with this writer, mine expert Edward Simukonda called on the government to act expeditiously on Mopani and KCM so that the two major mine assets could quickly stir back to full life as Zambia targets to hit an annual three million tonnes of copper output in the next 10 years.
“The two mines, Mopani and KCM, are not producing what is expected of them. They have not produced enough tonnage the past few years because of problems that everybody knows the companies are going through.
“Until these issues are looked into and production starts shooting, I see a very bleak future for us to attain three million tonnes of copper in the next ten years,” he said.
Mr Simukonda said there were a lot of issues that needed to be addressed for Zambia to really rely on KCM and Mopani as the major producers of copper.
“Are the workers paid well? Are they performing according to standard? Do we have enough operating equipment? Do we have capacity to buy new equipment? Are we looking at manpower development?” he noted.
The mine expert believes that even as the government resolves issues at KCM and Mopani, there will also be need to support small-scale producers as has been the case in the Democratic Republic of Congo and other jurisdictions.
The Church is also concerned as Bishop Joseph Kazhila, the general overseer of Life Fellowship Ministries International clearly states that KCM should immediately return to the rightful owners, Vedanta, to bring life back to the mine and surrounding community.
“KCM is in dire need. It is sick. It is in a grave position and it is wrong for people to lie that things are okay. Every business is established to make profit so that it can prosper and expand. How do you engage new employees if the company is not making profit, if the future is bleak?” he questioned.
Bishop Kazhila added: “You cannot continue to pretend that things are well in KCM. In life, it is good to swallow pride. Prevention is better that cure and I think the time to do that is now. There is no way out. We are looking at national interest. People may have had differences with Vedanta in the past but the time to act is now.”
The labour movement has had a change of heart and is now calling for the quick return of Vedanta Resources to KCM, observing that the situation at KCM is desperate.
The Mineworkers Union of Zambia (MUZ), National Union of Miners and Allied Workers (NUMAW) and United Mineworkers Union of Zambia (UMUZ) have urged the government to quicken negotiations with Vedanta so that the global conglomerate can quickly return to Chingola.
MUZ president Joseph Chewe said: “We are aware that the situation at KCM is desperate, starting from Chililabombwe, Chingola, Nkana and Nampundwe. Operations are in dire need of new life,” he stressed.
His counterpart at UMUZ Wisdom Ngwira said the happenings at KCM had negative effects on workers and mining towns while the NUMAW leader Saul Simunjika echoed the sentiments.
The calls for Vedanta to return to KCM management have also been reverberating in the civil society where Advocates for National Development and Democracy executive director Samuel Banda insists that Zambia has no option but to hand back KCM to Vedanta.
Mr Banda said, legally, KCM belongs to Vedanta and whichever way one looks at the issue, the Indian investor has the right of claim, hence there should never be any further delay.
Clearly, the calls to hand KCM back to Vedanta have grown exponentially with ordinary citizens in Chingola and Chililabombwe chipping in.
Mulabizi Mkandawire, a resident of Chingola, said it was time the government moved faster because the situation in the mining town had deteriorated while suppliers and contractors had already been pushed out of business.
Moses Sakuwaha, however, feels that the government must attach strict conditions for Vedanta to follow on return in order to protect suppliers, contractors and workers.
He says stringent conditions are inevitable so that the global firm does not renege on any of the terms and conditions of the agreement.
It is thus dependent upon the government to religiously follow the law and also ensure that KCM is managed in a manner that will benefit both the investor and citizens while upholding national interest and promoting value addition.
It is encouraging that most stakeholders have had a change of heart regarding Vedanta Resources which, during its stay in Zambia, during the reign of the Patriotic Front (PF), was viewed as a bad corporate citizen.
Perhaps the most critical question to ask here is: Why did Vedanta Resources behave in the manner they did during the time of the PF?
Was the behaviour of Vedanta Resources reminiscent of that of the PF?
How did Vedanta behave before the reign of the PF?
Vedanta operates mines in other jurisdictions which include Namibia and South Africa.
How has Vedanta behaved in these countries?
As answers are sought to the foregoing questions, what needs to be borne in mind is that Vedanta Resources are the legal owners of KCM.
Therefore, there is no way Vedanta Resources can be wished away without the Zambian government incurring huge costs, both legal and in form of compensation.
Taxpayers’ money cannot be used to pay costs when an alternative could have been found.
While the government has not publicly given details proffered in the negotiations thus far, Vedanta had announced before the talks began that workers will be offered a 20 per cent salary rise and a one-off K2,500 payment to each employee.
Vedanta Resources Limited also pledged to clear the $220million owed to suppliers and contractors, which has been outstanding since 2019.
At the time of the pledge, Vedanta Resources chairman Anil Agarwal said: “Vedanta is committed to paying to the suppliers, specifically small suppliers, up to two hundred and twenty million United States dollars which was due as on 21 May 2019 when the provisional liquidator was appointed.”
In addition, Mr Agarwal has guaranteed that Zambian-owned small and medium enterprises will be prioritised in the supply chain while payments will be effected within contractual agreements.
Back in India, Vedanta has entered into a joint venture with Faxconn on a 60-40 per cent equity arrangement in the state of Gujarat to set up a mammoth semi-conductor manufacturing plant and a testing unit.
The global operator is intent on setting up a unique investment in vehicle battery manufacturing and opening the Zambian economic outlay to giant firms in India which will, in turn, transfer technology among other economic spin-offs.
Already, Vedanta Zambia country director Moses Banda says his team will engage the government on plans to invest in the electric vehicle battery manufacturing industry in the country.
It is now up to the government to make a decision in the best interest of the country while giving space to Vedanta to grow the investment and generate sufficient profits.