Economist Chibamba Kanyama says Zambia is riding on razor’s edge with regards the liquidation of Konkola Copper Mines.

In an interview, Kanyama, who is also a communications specialist, Kanyama it would not be in Zambia’s interest if the final outcome of the legal battle between government and Vedanta was in favor of the latter.

“The real fear regarding the KCM issue is that the market does not know how it will all end and what the long term implications will be. It will not be in the interest of the country if the whole issues ends up in an award to Vedanta; no one in Zambia will want that money paid out under the circumstances. I consider the whole situation as riding on a razor’s edge as it has potential to painfully protract for a long time unless a firm decision is made,” Kanyama noted.

“As I see things, government is determined to stand its ground and seek change of ownership over the mine. But because of the recent ruling by a court in South Africa, potential and most promising investors may seek to stand away until the acquisition is free of legal issues. I am sure government will put together a team of legal minds to advise it on best way forward in the interest of the country.”

Kanyama advised government to strengthen its communication strategy around KCM issues.

“The case is followed up closely by international investors, both portfolio and real economy investors. Because of this, government should enhance its communications strategy, providing deeper explanations as to why ZCCM IH chose the path of liquidation, what it means to the mining industry; what liquidation itself entails, the roadmap on finding a buyer in the event that the issue is settled amicably with Vedanta; who takes over the liabilities of and when a buyer is found; whether or not this KCM liquidation and aftermath will affect the capacity of government to service external debts and what the likely impact of a new investor will be on total copper production, the development of Konkola Deep and overall economic health of the country. This communication should be done sooner than later in a transparent and concise manner,” advised Kanyama.

“For now, investors can only hope for the best outcomes and also not consider the action of government as a move towards policy reversal. The issue of KCM should be considered within a wider context so that those thinking what happened there will spillover to other mines should take comfort in that this is a one off incidence I believe.”