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Zambia High Court appoints administrator for Vedanta owned copper firm

Vedanta Resources is the major shareholder in Konkola Copper Mines with a 79.4 per cent stake, while ZCCM-IH holds 20.6 per cent

AFP | PTI  |  Lusaka 

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Zambia's on Tuesday appointed a for the country's largest firm, Copper Mines (KCM), with the government seeking to have another investor replace its current majority-owner, London-based

State-owned Consolidated Copper Mines Investment Holdings (ZCCM-IH), which is a minority shareholder in KCM, has sought the liquidation of KCM's assets according to court papers.

The court immediately appointed legal firm and Company "to act as provisional liquidator" pending the "conclusion of the hearing" of the petition by ZCCM-IH. The case is due to be heard on Friday.

Metals and company firm is the major shareholder in Copper Mines with a 79.4-per cent stake, while ZCCM-IH holds 20.6 per cent.

"It has become clear that Vedanta owes creditors money and to secure an orderly exit of Vedanta it is important that a liquidator is appointed," told AFP.

"Currently the government is in talks with three investors for a possible takeover of the mine," he added.

last week warned that international were free to leave the copper-rich country if they opposed the new tax regime.

initially opposed changes to Zambia's taxes, but later agreed. The government has targeted the mining sector to generate revenue as the country struggles under growing debt, but businesses have warned that the tax proposals could trigger a mass withdrawal of investment and thousands of redundancies.

KCM, which employs 13,000 people, said in a statement on Monday that it "has sought an urgent meeting with the president".

It said it has invested over $3 billion into its operations since 2004 and is "yet to receive a positive return on this investment while, on the other hand, taxes, duties, fuel and power costs have risen exponentially".

Analysts believe Vedanta could be replaced by a Chinese company.

"Private property rights look increasingly vulnerable as the government grapples with a sovereign debt crisis," said Nick Branson, with London-based

"Lungu's aggressive targeting of global commodity firms also hints at Zambia's increasing reliance on China, its largest bilateral creditor," he said. is Africa's second copper producing country after

First Published: Tue, May 21 2019. 23:26 IST
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