KCM now ponders international arbitration

MINING-conglomerate Vedanta Resources said it is seeking international arbitration over Zambia’s appointment of a provisional liquidator to run the company’s Konkola Copper Mines (KCM) business.

MINING conglomerate Vedanta Resources said it is seeking international arbitration over Zambia’s appointment of a provisional liquidator to run the company’s Konkola Copper Mines (KCM) business.

Vedanta said yesterday its executives were unable to visit its KCM operation and engage with local management, in a setback to efforts to ease tensions amid a legal battle with government.

The Zambian government has accused KCM of breaching its operating licence, Legal proceedings had been adjourned until June 4.

Shares of Vedanta’s India- listed arm Vedanta Ltd ended 2.1 percent lower yesterday.

The tussle was the latest legal challenge confronting Vedanta, which had been facing opposition from authorities and locals over alleged violations across continents - from Thoothukudi, located near India’s southern tip, to Chingola on Copperbelt.

Government was trying to secure greater benefits from natural resources being managed by foreign companies.

Vedanta Resources’ Chairman Anil Agarwal said on Thursday the company was working to comply with Zambia’s laws and tax requirements.

The mine, which noted that it had been reassured by the government that it had not entered into any sale agreements with other parties, said it had notified ZCCM-IH, the Zambian minority shareholder in KCM, of a dispute on Thursday.

The shareholders’ agreement provides for disputes to be submitted to international arbitration in Vedanta said.

Government said on Thursday its decision to punish Vedanta’s local operation for what it said were breaches of environmental and financial regulations was a signal to other firms to follow the country’s laws.

The country had riled mining companies with tax changes they said would force them to withhold the investment Zambia needs. Johannesburg,