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Govt liquidated KCM without regard to consequences – ZCCM-IH shareholdersBy Stuart Lisulo on 11 Jun 2019
Euronext, minority shareholders of ZCCM-IH, says government’s move to arbitrarily liquidate Vedanta Resources’ Konkola Copper Mines (KCM) Plc was hastily done without preparation.
But the minority shareholders insist that government did well to proceed with liquidating the troubled mining giant because Zambians had continuously been robbed for far too long.
Meanwhile, Euronext also criticised First Quantum Minerals’ (FQM) role in helping Zambia achieve its social and economic developmental agenda.
In a statement, Charles Thierry, who spoke on behalf of Euronext, stated that government’s decision to liquidate KCM had been hastily done without due regard to the consequences of its actions.
He argued that local mine asset takeovers had not worked well in the recent past, citing the Ndola Lime debacle.
Last month, government took repossession of KCM following the Lusaka High Court’s decision to appoint a provisional liquidator tasked to wind up the company.
“Nevertheless, as shareholders of ZCCM-IH, we are also concerned about the KCM liquidation. While the difficult situation had been ongoing for years, the decision to revoke Vedanta’s licence seems to have been taken in haste without preparation and anticipation. Due to our meagre resources, our company does not have the financial means to maintain the KCM mines in operation or maintenance over the long-term as evidenced by the liquidation of former lime jewel Ndola Lime Co.,” Thierry stated in a press release issued, Monday.
“We have helplessly witnessed its unfortunate management and inadequate industrial investments. In the end, more than US $100 million went up in smoke…These financial difficulties were followed by a risky investment in the oversized CAC cement plant. Therefore, this additional charge related to KCM will compromise the viability of our holding company, ZCCM-IH.”
But Thierry, however, insisted that government did well to proceed with liquidating the troubled mining giant because Zambians had continuously been robbed for far too long.
“The minority shareholders of ZCCM-IH support the decision of the Zambian government, the company’s majority shareholder, to proceed with the liquidation of KCM, thereby, revoking Vedanta’s mining license. For many years, we have wanted to strong measures to be taken against mining companies that do not play the fair game with the people of Zambia and ZCCM-IH. For too long, these companies have abused the caring of different Zambian governments, anxious not to hurt international investors and to preserve employment in the Copperbelt,” he noted.
Thierry also condemned Vedanta Resources’ founder and chairman Anil Agarwal’s infamous 2014 pronouncement where he bragged about the mine returning at least US $500 million in profits annually after only buying KCM for a paltry US $25 million.
“For several days, Vedanta has been trying to justify the inevitable dramatic situation of KCM, but insists on keeping and running the mine. Odd situation…have we ever seen a leech want to continue sucking at all costs a dead man…? In line with their logic, after such a financial and environmental disaster, they should rather leave Zambia by the back door and by lowering their head,” he urged.
“Not only does Vedanta despoil Zambia and pollute the land of surrounding villagers, not only does Anil Agarwal not keep his promises, but he also has the imprudence to mock the Zambian people and their leaders! While he is a spoils-man, humiliating them in this way is disgusting…”
Meanwhile, Thierry equally criticised FQM’s role in helping Zambia achieve its social and economic developmental agenda.
“FQM is another clear case in point. How can we really believe that FQM is letting US$3.5 billion sleep in the Kansanshi Mine’s coffers? To keep that huge amount of retained earnings is abnormal. Would they be distributed, the ZCCM-IH’s share would be as much as US $700 million, while Zambia is in dire need of money and development,” stated Thierry.
“Would the purpose of FQM be to stifle the people of Zambia? It may be Mr Pascall and his staff’s strange way of rewarding Zambians for allowing FQM to build a world mining empire through the Kansanshi Mine…Recently, rumours have circulated that FQM has proposed to buy back our 20 per cent Kansanshi shares for US $700 million. In other words, FQM would offer to buy it back with our own money!”
About Stuart Lisulo
Stuart Lisulo is an experienced Zambian journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
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