Investors told to honor their investment promises

 Investors told to honor their investment promises

By Abigail Chaponda in London, United Kingdom
Mines and Minerals Development Minister Richard Musukwa has told the Europe’s largest Mining and Investment forum that the Zambian Government takes a strong exception to safeguard the prudent management and development of the country’s finite mineral resources.

Speaking on a panel of discussion at the Mines and Money Conference in London, the Minister told the conference that “Government has no intention to nationalise the mining sector and the economy in general. But for a long time, we have let investors take advantage of us, and it is time for us to stand up and ensure that we protect our people and our country.”

Mr. Musukwa further stated that the KCM issue has nothing to do with politics as being reported by some people, “but that the multinational company failed to inject the capital outlay that was projected in the investment portfolio”.

And Vedanta Zinc International Chief Executive Officer Deshnee Naidoo who is also attending the Mines and Money Conference in London said Vedanta and the Zambian Government were in a difficult situation as regards to KCM.

Ms. Naidoo said Vedanta will continue to work towards engaging with the government as the first recourse in finding a solution to the current avenues at play which is largely court cases within the country, as well as an International arbitration case that is currently going on.

Former KCM CEO Deshnee Naidoo said communities and government who are affected stakeholders have to come together and engage.

“When I came to Zambia, I came into a country that was financially stressed and as such I found more of aggressive budgetary stance were taken. What I have found out is that the Zambian government was willing to engage,” she said.

However, Mr Musukwa stated “Government has followed due process in effecting the winding up. The procedures employed are in accordance with our Corporate Insolvency Act, which is similar in most respects to the Act in the UK. If it was Government’s intention to nationalise the company, it would have proceeded by way of compulsory acquisition and keep the company for itself.”

“We would like to see a smooth transition of exit modalities with Vedanta because they were our long-standing partners whom we have embraced in our country for a long time. Zambia welcomes all investors, we will continue to run and operate the mining based on private led sector initiative” he added.

And responding to Former KCM CEO Deshnee Naidoo who said that during her tenure the Zambian government was owing mining companies a significant amount of backlog VAT, and accusing mining companies of not being transparent enough in terms of Taxes and royalties, Hon. Musukwa responded that the failure to pay the vat refund was necessitated by mining houses failing to provide data where they sold the product.

“Can you tell me a situation where you can have a mining entity, they sell Copper, they do not have the documentation of where they sold the Copper and we should refund that kind of operation? Not at all, we would like mining houses to come out clean, be open and transparent and ensure that they are our partners, Government remains committed to ensuring that we provide a fascial regime that is simple, predictable, stable and also anchored on the rule of law”, he added.

Mr. Musukwa said the last time KCM developed or produced their own material was in 2014 and they have been relying on scavenging around for materials from dump sites, something which the Minister said government could not support coming from a multinational company like Vedanta.

“You will be interested to know that in fact when we sent several default notices to them, they committed to a business improvement plan, which they lamentably failed to implement. The turnovers for the CEOs for KCM was actually between 3-4 months in fact, Deshnee was the best CEO that we had and we thought she would stay longer to transform KCM,” he said.

The Minister further added that Government hoped to see more responsive investment in terms of changing people’s lives, as the poverty and squalor associated with host communities where mining operations take place cannot continue to be business as usual.

He said responsible mining is a matter that provides benefits to the local people and the Zambian Government will not shy away to demand the best for its people from mining corporations.



Abigail Chaponda

Abigail Chaponda is a Zambian Journalist currently working as the First Secretary for Press and Public Relations at the Zambian Embassy in United Kingdom

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