Vedanta Resources keen to remain in Zambia

Amid the fray over the alleged underpayment of tax to the Zambian Government coupled with the recent ‘mocking’ of the laxity in mining policies that has seen the company pocket over US$500 million in profits annually, Konkola Copper Mines wants to remain in the copper rich nation for over 50 years.

The diversified miner, a unit of London  listed Vedanta Resources Plc, with 79% equity in KCM, the  mining and energy group with major focus in India,wants to put the differences aside and remain in Zambia longer than was feared despite the company not making ‘as much profit’ as envisaged.

The diversified miner’s unit-KCM which has gobbled over US$3 billion is despite the reported loss and some challenges it faces in Zambia wants to remain in  the country’s copper industry for as long as 50 years from now, according to Bloomberg news citing its Chief Executive Officer Tom Albanese.

Albenese says, Vedanta Resources Plc has invested $2.9 billion since it bought a 78.4% stake in Konkola Copper Mines in Zambia for $261 million, he told the just ended mining conference in London, he said on the website. The company has further paid more than $850 million in tax and “local rates,” he said.

Accordingly and for technical reasons which have delayed the ramp-up of copper production after these massive investments, KCM has been loss-making of late and some challenges remain.

However, Albanese adds that inspite of all the shortcomings Vedanta Resources is committed to KCM and to Zambia.

“We have a 50 year vision for KCM and opportunities in the Copperbelt as our copper and cobalt anchor for our future African growth.”

Recently, Vedanta Resources irked the Zambian Government following reports by its company head that despite buying off KCM for a paltry US$25 million in 2004, the parent company was earning a whooping US$500 million in profits annually.

Recently, Zambia’s vice president Guy Scott and his mines minisrer Christopher Yaluma expressed displeasure at the company’s mockery that it was earning more than what was invested in Zambia-a giveaway ‘award’ for being in Zambia, according to a video footage citing the company.

However, the Government has since directed the Zambia Revenue Authority in collaboration with the ministry of mines to compile a report about the claims-deemed as tax evasion to establish the truth.

Vedanta’s majority shareholder and Chairman Anil Agarwal was last month reported to have ‘quipped’ about the low value of the mine which was apparently profitable-far less than the asking price.

President Micheal Sata last month said the government will consider nationalizing mines that aren’t honest. 

Vedanta, based in London, on May 16 said an activist posted a video containing part of Agarwal’s speech on to the Internet and it was used “negatively out of context.” Vedanta has taken “very little out,” Agarwal said in that statement.

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