FORMER commerce minister Bob Sichinga has questioned government’s interest in getting into a relationship with Vedanta, arguing that the firm is just taking advantage of Zambia’s indecisiveness.
And Mine Workers Union of Zambia president Joseph Chewe says if Vedanta is to come back, it will raise a lot of concern from stakeholders, urging government to consult widely before making a decision.
Meanwhile, Mines and Minerals Development Minister Paul Kabuswe says he can only comment on the development once he comes back from the African Mining Indaba in South Africa later this week.
According to Bloomberg, Zambia has agreed to end legal action against billionaire Anil Agarwal’s Vedanta Resources Ltd. as President Hakainde Hichilema seeks to revive mining output in the southern African country.
Bloomberg reported that President Hichilema told reporters at the Investing in African Mining Indaba conference in Cape Town on Monday that Vedanta and “ourselves” agreed to suspend litigation as a partial way of resolving the matter.
But in an interview, Tuesday, Sichinga said it was shocking that the government insisting on salvaging ties to Vedanta when now was the ideal time to terminate the relationship.
“I do not understand why the government is insisting on going on with the relationship with Vedanta. They have an ideal opportunity right now to terminate this. The mines can be run by Zambians and what they need is government support to make sure that the government itself is a leader as a shareholder in this. The government can borrow, we have done that before under ZCCM. So there is no need for this fracas in the first place. There is a termination fee here going on, just agree, there is reality. Why is it that Vedanta says now they can do better when they have failed to produce a single dividend for the Zambian government? Where were they, why are they insisting on ownership when they said they are making losses?” he asked.
“Why would a business person want to maintain an asset which is making losses? I find it very surprising and in fact, very shocking that we are insisting on Vedanta. The question I’m asking is why. If Vedanta is going to invest 5.2 billion or whatever the number might be, these same mines under the Zambian government so long as, and I have to insist on this, so long as you don’t end up with unnecessary government interference, confusion and try to exploit opportunities, so long as it is legitimately, properly, professionally run, I do not know why we are insisting on Vedanta. I cannot even comprehend why we are insisting.”
He said Vedanta was taking advantage of Zambia’s indecisiveness.
“Vedanta says they have been making losses, can they explain to us how they have been making losses? Why are they insisting on holding on to this asset if they are making losses? The problem you have is the moment the government takes over, there will be constant interference from the same government officials including ministers, directors and all sorts of interested parties. This is setting a prelude of simply what is going to happen next. We can privatise everything in this country and you get nothing for it as has happened in the past. No company comes here to come and help Zambians, to come and provide income for Zambians. They come here to make money for themselves. And the earlier Zambian governments realise that, the better,” he said.
“There is nothing stopping the government backing up through its own companies. ZCCM was a good example. ZCCM was borrowing, it was able to reschedule its debt, it was able to employ 65,000 employees, it was able to run hospitals. I worked for the mines as a group financial controller at a very high level. I understand the mines very well, each one of these mines. The only benefit you have with a private company is that you don’t interfere with it. Vendata is not here to make money for anybody, they are making money for themselves and they are taking advantage of our indecisiveness and uncertainties.”
Sichinga asked government to come out clean if it was liquidating KCM, following appointment of another liquidator at the mine.
“For me, the government’s position is unclear. Are you liquidating KCM? That’s the question I want the government to answer. I’m not clear about the government’s policy on the mines. Are you liquidating KCM because to have a liquidator means that you are liquidating. That’s what it means. The question I’m asking and really needs to be answered and I think that this you should raise in your opinions in your own paper, what is the government’s position vis-à-vis the mining sector? What is their position, what do they want to do with it? Until that question is answered, you cannot move forward to the next stage. The question I’m asking is where does the government want to go with the mining sector?” asked Sichinga.
“You appoint a liquidator, are you liquidating KCM? On the other hand you are saying no you want to compromise with them. So when you have compromised then you are going to liquidate it? One of the things that is not making sense to me; you have a liquidator, what are you trying to do?”
And in a separate interview, Chewe said if Vedanta was to come back, it would raise a lot of concern from stakeholders.
“If Vedanta has been baptised and confessed their sin, there must be a concern from many stakeholders and the government really must listen to every voice before they make that decision to bring Vedanta into KCM operations. But we also realise that the asset has been deteriorating and if we don’t have a resolution very soon, all of us as Zambians will continue to lose and fail to take advantage of the copper price and the new transition that is copper, cobalt that KCM can produce. If they are baptised, how do we know they have really confessed their sins? That is the question,” Chewe said.
Chewe said the current state of KCM was not helping the country in any way.
“Vedanta was not looking after the asset properly, there was no capitalisation and the mine was heading for a doom. I think as Mine Unions, we stood up and said can we not have this investor because of failure to follow the agreements that they breached. Now Vedanta has been pushing to come back and we were also in copy of the letter addressed to the Minister of Mines stating why we chased them and now wanting to do the needful and that they have confessed their sins. Mines Union of Zambia, we have been consistent when we have said KCM requires urgent resolution because the mine in its state is not helping the workers, community and the country in terms of the resources that must come from there,” said Chewe.
Meanwhile, in a separate interview, Tuesday, Kabuswe said he could only comment on the development once he was back from the African Mining Indaba in South Africa later this week.
“Right now, I’m in a thick of things, I’m just having my lunch and I have just come from an engagement. So call me on Thursday, the day after tomorrow and we can have a chat in Zambia,” said Kabuswe.