Mines Minister Richard Musukwa says Zambia will carry out regular audits at all mines to avoid any repeat of the situation at Vedanta unit Konkola Copper Mines (KCM), which has breached the terms of its license.
President Edgar Lungu said on Monday the government planned to strip KCM of its mining license and bring a new investor into the operation.
His spokesman said the move followed a number of breaches of the terms of the license, without giving details.
A court hearing has been scheduled for Friday, following a high court order this week that named a Zambian law firm as the liquidator to oversee KCM.
Mr. Musukwa said the action at KCM “should not be misconstrued as nationalization” and followed KCM’s failure to “comply with license conditions”.
“The government will be undertaking regular audits at all the mines to ensure compliance and avoid the recurrence of the situation at KCM,” he said.
Mr Musukwa has reiterated that the role of Government is to create an enabling environment for investment that creates mutual benefits for the country and the investor.
The Minister has stated that what Government is doing at KCM should not be misconstrued as nationalization.
“The action has been triggered by failure by the investor to comply with license conditions and will therefore be dealt with in accordance with the provisions of the Mines and Minerals Development Act of 2015 and other relevant laws.”
Mr Musukwa stated that care will be taken to ensure that no undue socio-economic distress is caused and that the investor is not in any way unfairly treated.
“The Government of the Republic of Zambia values the investment by the private sector in the Zambian mining industry and the economy at large. Investors are important in the development process of the country as such we will endeavour to dialogue to resolve any issues affecting businesses. However, Government shall penalise any fraudulent mining company to prevent loss of the much needed revenue and save jobs.”
Me. Musukwa has since called upon the people of Zambia particularly those directly affected by the developments at KCM to be patient and allow Government to resolve the matter as outlined in the law in the best interest of all involved.
On May 21st 2019, Government named a provisional liquidator to manage the affairs of KCM, Mr Milingo Lungu.