A Zambian High Court on February 01, threw out an earlier stay of execution blocking the reorganization of Konkola Copper Mines into a smelter and mineral resource business respectively. The high court had on January 18, granted an ex – parte order in favor of Vedanta Resources, Vedanta Resources and Vedanta Limited protecting KCM assets from any form of restructure. This outcome however is coming at a time when aggrieved parties ZCCM-IH Plc and Vedanta Resources are in arbitration in London.
Zambian authorities are determined to correct shareholding in key mines aimed at correcting a 25 year old privatization mistake where the Southern African nation was at the receiving end of a hard bargain.
Eighty percent (80%) majority shareholder of Konkola Copper Mine has been in the labyrinth of quagmires following purported license breaches and exploitation of employees which the sovereign steeped in to correct. Between March 2019 to date, litigation has been the order of the day characterizing a tug of war between Vedanta and the Zambia authorities through a series of court cases.
SECOND COUPON DEFAULT AND IN TALKS WITH IMF
The copper producer is in the middle of talks with Washington based lender for a bailout package following deterioration in fiscal posture in part amplified by disease pandemic. Zambia skipped its second coupon payment on a 2027 dollar bond of $56.1million on January 29, amidst a debt restructure process for which it hired French investment banking firm Lazard Frere’s in June last year. Zambia will seek to leverage of mining to drive its ‘V’ shaped recovery at a time when metal prices flirt with 8 year highs on the London Metal Exchange (LME).
The Kwacha Arbitrageur