In the labyrinth of litigation clouding the mining sector following commenced liquidation proceedings against Vedanta Resources Ltd in Africa’s second largest copper producer Zambia, the Court of Appeal November 20, delivered a judgment ordering that these proceedings be stayed to allow the parties to proceed to arbitration.
Last year the Zambian authorities and other shareholders took on majority shareholder in Konkola Copper Mines for a number of purported violations culminating into mining license breaches exacerbated by pollution to taxation inconsistencies triggering a decision to wind the miner down.
However this matter has been one of the biggest dent on Zambia’s mining outlook as it has impacted exploration investment pulse and general productivity at the mine. This adds onto the disease pandemic related effects on the macroeconomy and threatens the copper producers attainment of macroeconomic growth at a time red metal prices have rebounded to above $7,100 a metric ton on the London Metal Exchange.
In view of this latest Judgment, Mr. Lungu (the Provisional Liquidator) updated employees, business partners, the nation and all KCM stakeholders that the Court of Appeal has not discharged the Provisional Liquidator and he remains with full powers as granted by the High Court of Zambia on 21st May 2019. Further, that operations of KCM remain on course with production ramp-up being the key focus as the company continues to engage with its business partners in a normal way.
As provided for under Corporate Insolvency Act and powers granted to the Provisional Liquidator, the Provisional Liquidator continues to exercise the executive responsibility of running the Company and the KCM Executive Management Committee remains accountable to the Provisional Liquidator.
“I therefore, urge all employees to continue working normally, safely and remain steadfast in the pursuit to make KCM a great organization. Our stakeholders should also remain calm as we continue to work towards a common goal safely and increased production,” Milingo said.
The decision by the Court of Appeal to topple an earlier High Court judgement does however reveal the independent nature of the judiciary which remains key in managing conflict in Zambia’s key sector which has implications on the sectors investment climate.
The Kwacha Arbitrageur