Konkola Copper Mines is yet to pay June salaries to its senior workforce amidst reports that the liquidation team is soliciting financial help to settle the wage bill from ZCCM-IH, a government-owned mining investment portfolio.
And reliable sources tell News Diggers that a Turkish Conglomerate, Cengiz Holdings, is battling it out with China Non-Ferrous Metals (CNMC) as frontrunner to take over 79 per cent stake in Konkola Copper Mines (KCM), which the Zambian government forcibly grabbed from Vedanta Resources.
Meanwhile, the KCM smelter went down, Tuesday, due to a refractory problem, and is only expected to resume operations over the weekend.
“There are serious financial challenges now at the mine, and the salary situation is only getting worse. So far, only the employees on S1-4 salary scale have been paid. The rest of the senior managers have not been paid. There were reports that salaries would be paid on the June 28, but that has not happened yet. And the minister who was supposed to visit KCM has cancelled his visit, and the workers believe that he is avoiding questions over delayed salaries,” the source explained.
“You should also try to dig around and find where KCM is getting the money to pay workers, since production is near to zero. Those managing the finances are not able to speak officially, but we are told that it’s ZCCM-IH that is helping, the liquidation team is relying on government resources to pay KCM salaries. What that means is that taxpayers’ money is already being spent on this. Our fear is that it cannot be sustainable because everyone knows that government has no money. So we just hope the same new investor comes on board soon. If you look at the machinery, it is also being run down. Currently, the smelter is down, and it may not be operational for the rest of the week.”
Meanwhile, government is pushing ahead with negotiations with prospective KCM buyers, a process that has given the Chinese a head start following widespread public media articles placing CNMC as a preferred investor, ahead of Cengiz Holdings of Turkey.
According to Africa Mining Intelligence, CNMC has ramped up its media presence over the past few days to proclaim the legitimacy of its purchase of KCM.
While the Zambian government’s request for KCM to be liquidated has been put on hold by a court ruling, CNMC seems to be convinced that it will take over the sites.
In June, CNMC representatives took to the local newspapers to affirm that the company is the best suited, both in terms of technical and financial capacity, to buy the assets post-liquidation.
The mines have been running at half-capacity since the liquidation process began in May.
It will, however, be difficult to make any sale before the dispute between the government and Vedanta headed by Indian Anil Agarwal, has been settled.
The Lusaka High Court ruling on the matter called for the liquidation process to be suspended on June 27, while at the same time, the mining firm intends to file for arbitration in South Africa.