Copper mining in Zambia/Bloomberg

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Zambian President threatens Glencore, Vedanta with divorce

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Last week, Mines Minister Richard Musukwa said the government directed Glencore’s Mopani Copper Mines to hand over two shafts to local contractors rather than close them.

Sunday 19, May 2019

(Bloomberg) -- Zambian President Edgar Lungu threatened to divorce the domestic copper units of Vedanta Resources and Glencore after the companies said they’d curb operations in the Southern African nation.

The threat marks an escalation in tensions between the mining industry in Africa’s second-biggest copper producer and the state, after an increase in royalties and plans to introduce new taxes.

President Lungu visited Copperbelt province to meet officials from labour unions and the Chamber of Mines, after Mopani announced last week it plans to shut two shafts and fire hundreds of workers.

The disagreement could weaken the kwacha, which is already the world’s second-worst performing currency against the dollar this year, having fallen 14.7 per cent.

 “I want to make it very clear that I have come here to sanction, if it’s the will of the Zambian people, that we divorce these mines,” said President Lungu.

“My position is that enough is enough, the attorney general is here and the lawyers are here, they will guide us how to proceed with this divorce,” added Lungu.

Amos Chanda, a spokesman for the president, said that by using the word divorce, Lungu was referring to the fact that other unidentified investors are interested in Zambian mining assets.

“Everything that will be done will be done within the confines of the law, in line with the existing mining licences, it is not in the policy of the Zambian government under any circumstances to engage in nationalisation or seizure of private assets without due process,” Chanda said.

Vedanta’s Konkola Copper Mines noted Lungu’s concerns and said it’s committed to its operations in the country.

“We believe there is an opportunity to resolve these matters for the benefit of all stakeholders, certainly, we are committed to investing in the country for the long haul,” said Eugene Chungu, Konkola Copper Mines company spokesman.

Lungu accused mining companies of lying about their profit, and trying to arm-twist the government over its plans to replace value-added tax with a new sales tax system.

“We know they are liars, they are cheats and they take us for fools, let me conclude by saying that sales tax is here to stay,” says Lungu.

TAGS : Copper mining , Vedanta Resources, Glencore, President Edgar Lungu

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