Konkola Copper Mines (KCM) can no longer meet its statutory obligations because the firm has no money, says the Association of Mine Suppliers and Contractors (AMSC).
And the Association has suggested that KCM must not be allowed to leave the country even if its business is not thriving, unless it settles all its debts to suppliers and contractors whom the mining firm has been owing for several years.
Association president Augustine Mubanga was reacting to Bahati PF member of parliament Harry Kalaba, who recently suggested that government had no capability to deal with KCM over its failure to pay suppliers and contractors because most mine suppliers were top government officials.
“That statement the former minister made is out of context because business is business. So, if KCM is not paying its suppliers and contractors, it doesn’t mean that the suppliers and contractors are government officials; I don’t think that is correct. What is correct is that KCM has not paid, and that KCM has no money. So, also, you need to find out from KCM why they are not paying because from my point of view, the position is that KCM has not paid and the reason why they have not paid is best known to themselves, but they need to clarify because to us, it’s KCM’s responsibility to pay for all the services that they are receiving from any supplier or contractor irrespective of their location, whether local or foreign, because ultimately, they have provided a service,” Mubanga told News Diggers! in an interview.
“However, three weeks ago, we met all the contractors and they submitted their submissions to the extent of them being inconvenienced, and what they’ve endured so far because of non-payment. After that, we had to meet with the Honourable Minister of Mines [Richard Musukwa] who came and we gave him submissions that came from the members. So, that’s the step we’ve taken, we’ve informed government because the agreement of investment is between government and KCM, so we come in as citizens of Zambia who want to do business with KCM in a way as a third party, meaning that we might not change what government has agreed with them. So, we have to go to government and say, ‘look, this is the investor that you brought, now look at they are doing.’ So, we have engaged government and the government engaged KCM. So, the engagement that took place between KCM and government, we were supposed to have been briefed on what they had agreed, but the Minister is not in the country, so we are waiting for him and once he comes back, we are going to sit down and hear the way forward.”
But when asked what according to him was the reason why KCM had continued with business when it was not allegedly making profit, he said KCM must not be allowed to stop operating until it paid all its outstanding arrears to suppliers and contractors.
“Well, anyone that goes into a business, they go into business for a profit and you can’t be in business for a long time when you are not making any profit. It defeats the purpose of you being in business. Now, if we told KCM to shut down their operations and go, who is going to liquidate their liability as it stands now? And is government ready to liquidate the liabilities that KCM has created as a private company? So, the way forward is to make sure that KCM liquidates all the debt that it has accumulated. Because they have accumulated those debts on the production, which they’ve done in the past, and they’ve also sold the copper under which those liabilities were incurred and they have enjoyed the benefits,” Mubanga explained.
“So, why should we tell them to leave the mine now, go and then someone else who didn’t enjoy the benefits of the liabilities that they created to come and foot that liability? It doesn’t make sense, so KCM cannot be made to go now. If they have to go, they must clear up the mess, which they have created and leave the company without any liabilities. Because right now, even if someone wanted to take over KCM under these circumstances where contractors, suppliers and any other stakeholders surrounding their operations feel agitated and that the investment is not adding value, they may not buy that investment. So, it’s not a good idea for us to advocate that KCM goes now; KCM should only go when everybody has received their payment, when everybody has been cleared of the debt, which they have with KCM.”