Zambia asks Vedanta not to increase copper mine stake

By Xinhua

Lusaka : The Zambian government has asked London Stock Market-listed Vedanta Resources Plc, owned by Indian-born entrepreneur Anil Agarwal, not to purchase the 28 percent shares held by Zambia Copper Investment (ZCI), Zambia Daily Mail reported Wednesday.

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Zambian Minister of Mines and Mineral Development Kalombo Mwansa and his deputy Maxwell Mwale confirmed that the government would be comfortable if Vedanta maintained its current 51 percent stake.

Last week it appeared as if Vedanta would go ahead and buy ZCI’s 28.4 percent interest in Konkola Copper Mines (KCM), the largest copper mine in Zambia, as per an earlier agreement.

Now the Zambian government is suggesting the firm waive this option. It has suggested that the shares be offered through the Lusaka Stock Exchange.

Mwansa said that Vedanta had not yet responded to the government letter.

“We have written to them over the matter of taking over the ZCI shares. As government, we are of the view that they stick to what they have in KCM and we are urging them not to exercise the call option.

Our understanding is that the ZCI shares should be listed on the Lusaka Stock Exchange or any other alternative measure that will benefit and empower Zambians,” Mwansa said.

Mwale said if Vedanta acquired the 28.4 shares in ZCI, it would own about 80 percent in KCM, which would create a monopoly.

He said that legally Vedanta was entitled the first refusal to buy ZCI shares according to the agreement signed, pointing out that the company must be alive to what is happening in Zambia currently.

Last Tuesday, Tom Kamwendo, chairman of ZCI, said the valuation date had been fixed subject to Vedanta accepting an independent valuation of the shares.

“ZCI’s shares in KCM are being offered to Vedanta rather than being sold via the Lusaka Stock Exchange or sold in any other way because that is the provision of the legal agreement that was reached at the time Vedanta was acquiring its current 51 percent shareholding in KCM.”

Kamwendo’s comments followed an announcement a fortnight ago from Agarwal that the two parties had resolved their differences over the valuation of ZCI’s shares in KCM and that an independent valuation was in progress.