In a letter delivered to State House, Sunday, Kambwili said he was not opposed to getting rid of Vedanta but that the method being used by government was confusing.
“Your Excellency, I refer to the recent decision by Government, through Zambia Consolidated Copper Mines Investment Holdings Limited ZCCM-IH) to apply to the Lusaka High Court to place Konkola Copper Mines (KCM) under liquidation. Your Excellency, this decision has raised a lot of concern and anxiety among the general citizenry of this country and the people of the Copperbelt in particular. Sir, as you well aware, I have been the strongest critic of Vedanta Resources who are the majority shareholders in KCM. I have on numerous occasions complained about how they have mismanaged the mine and their continued failure to pay employees, contractors and suppliers on time. This conduct by Vedanta I have found unacceptable and intolerable and you will recall even during my time when I served as Labour Minister I spoke very strongly about the shortcomings of Vedanta Resources. It is without a doubt that Vedanta Resource’s continued presence has led to a general collapse of the business community as well as degeneration of the welfare of the people in the towns KCM operates,” Kambwili wrote.
“Vedanta Resources has allowed a situation where KCM has continued to abrogate on its contractual obligation as well as neglecting its statutory obligations, and the Government is to a large extent responsible for allowing this to happen. However, I have noted with grave concern and dismay how the government is flip-flopping on the take-over of KCM. There seems to be a clear lack of certainty and assurance on how the government intends to deal with the take-over of KCM.”
Kambwili observed that KCM provisional liquidator Milingo Lungu’s decision to appoint some experts to manage the mine was not in line with the processor liquidation.
“Your Excellency, you initially announced that the government had taken-over the mine and that you were going to follow the due process of the law in disengaging with Vedanta Resources. Immediately, thereafter, Government through ZCCM-IH applied for a liquidation of KCM. The next step that followed is that the Minister of Mines with the Provisional Liquidator announced the appointment of mining experts to help manage the mine. Further in a press release of the 30th of May 2019, the Minister of Information made a shocking announcement that there was no liquidation of KCM but instead it was “a liquidation of the relationship between Government and Vedanta Resources”. You cannot in one breath place a company under liquidation and in another appoint people to manage it as a going concern. It’s either one or the other, not both. It also demonstrates the inexperience of the appointed Provisional Liquidator in so far as what his role is in liquidation. He is so far already treading on illegalities by allowing himself into management or co-management of a company in liquidation,” he stated.
“It is clear to the general citizenry that the government is out of its depths on how best to handle the take-over and am gravely concerned for the communities in which KCM operates. This is further eroding investor confidence in our mining sector at a time when we most need it.
Your Excellency, It is my plea that you kindly heed my strong advice that the avenue you have taken of liquidating KCM is catastrophic, because it is ill-timed and based on ill advice. This is premised on the fact that KCM is not insolvent and is capable of paying its debts. This process will bring untold suffering on the people and the business community. We saw this with the liquidation of Zambia Airways, Maamba Collieries, Luanshya mines.”
He stated that it was not too late to reverse the liquidation process and go for a better option.
“Sir, it is, therefore, not too late for you to consider the options I have proposed and it’s evident to me that the purported appointment of managers of KCM is government’s veiled attempt to adopt my suggestions. But this has to be done properly by reversing the liquidation route and appoint a competent management team until a suitable investor is identified. I don’t see how a company in liquidation can be managed and how its operations can be financed as no financier or Government can fund a company in liquidation. There is no business or legal justification for that,” stated Kambwili.
“Lastly your Excellency, I wish to urge you not to entertain any Chinese investor in KCM because of their proven poor investment record in the mining sector. This record is evident in Chambeshi and Luanshya where there are Chinese operated mines. The people of Chingola, Chililabombwe, Mumbwa and Kitwe have suffered enough at the hands of Vedanta Resources and should not be subject to poorer working conditions by a Chinese investor. Kindly accept my sincere best wishes, and I hope you will consider my concerns and advice. I remain in public service.”