CHINGOLA, Zambia (CU)_Since May 2019, metals and mining firm Vedanta Resources has been locked in a dispute with the government of Zambia after the latter handed control of the Konkola Copper Mines (KCM) to a liquidator. The company held a 79.4 per cent stake in KCM, while the remaining 20.6 per cent is held by the Zambian government through its state mining investment firm ZCCM-IH. Subsequently, in August, Zambia’s High Court suspended hearings by a state-appointed provisional liquidator for splitting up the KCM unit, with the aim of allowing the parties to proceed to arbitration.
Accordingly, the parties have been arbitrating in London over the dispute which was prompted by the Zambian government’s allegations that Vedanta had failed to honour licensing conditions, a claim which has been denied by the mining firm. Nevertheless, the arbitral tribunal issued partial final award issued on Monday (12 July), which ruled that government-owned ZCCM has in fact breached dispute resolution provisions provided in the company’s shareholder agreements with Vedanta.
“The arbitral tribunal has recently granted a partial final Award in which it has ruled that ZCCM has breached, and is in continuing breach of, the dispute resolution provisions in the shareholders’ agreement between amongst others ZCCM, Vedanta and the Government of Zambia,” Vedanta said in a filing to the Singapore Stock Exchange. The firm added that in order to remedy the breach ZCCM is expected to immediately withdraw the petition and amended petition, while the provisional liquidator should be also discharged.
The liquidator, Milingo Lungu, announced a restructuring of plan last December, which involved the splitting of KCM into two subsidiaries, KCM Smelter Co Limited and Konkola Mineral Resources Limited. Legal arguments over the case have been heard in both Zambia and South Africa.
