The Republic of Zambia has agreed to return the ownership and management of the Konkola Copper Mines (KCM) to India-based natural resources company Vedanta Resources.
The government of Zambia owns a 20% stake in KCM, through its indirectly owned mining company Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH).
The current announcement ends a series of disputes over the ownership of the KCM assets, which erupted when the government authorities seized the mines in 2019.
Vedanta is now allowed to resume operations at KCM mines and smelter, as the majority shareholder with a 79.4% stake in KCM.
Zambia’s mines minister Paul Kabuswe told journalists: “It is not a secret that the asset has deteriorated a great deal and the production output has substantially reduced.
This is a very sad development for a national strategic asset of the country. Vedanta will return to run and resuscitate the operations of KCM as the majority shareholders.”
KCM is the largest integrated copper producer in Zambia, comprising open pit and underground mines, concentrators, a smelter, a tailings leach plant, and a refinery.
The project holds reserves and resources of 16 million tonnes of contained copper, with a copper grade of 2.3%, which is very favourable compared with the global average of 0.4%.
Vedanta said that the KCM operation will serve as the backbone of its strategy to vertically integrate in copper which plays an essential role in the energy transition.
In May 2019, Zambia and Vedanta parted ways after former President Edgar Lungu’s government ordered the seizure of the KCM assets.
The government alleged that the Indian mining company failed to meet the plans to invest in increasing mining output.
Vedanta launched legal battles against the forced takeover, including approaching an arbitration court in London to recover the copper assets.
Earlier this year, the Indian mining company reached an advanced stage of executing agreements with the Zambian government over KCM assets.
Vedanta Resources chairman Anil Agarwal said: “I welcome the decision of the Government of the Republic of Zambia to reinstate Vedanta at KCM. We have been committed to KCM since 2004 and believe that it is a prized asset in our portfolio.
“Copper is a critical mineral for the technologies of the future. Vedanta will become a fully integrated producer of copper and cater to India’s fast-growing demand while also making Zambia the leading producer of copper in the world.
“I wish to express my sincere gratitude to His Excellency President Hakainde Hichilema for his proactive and progressive leadership and putting Zambia’s interests first.”
