Zambian President Edgar Lungu has hit out at ‘mining investors who cry foul’ whenever Zambia sought to increase its share of its natural wealth.
He said the country would take a major stake in some mines as he unveiled an economic recovery plan for the debt-burdened country.
“We must assume a significant stake in some selected mine assets so that we create sufficient wealth for the nation,” Lungu said.
“This is not nationalisation of mines, on the contrary, it’s the state acquiring majority stake in selected mines while allowing private investors to also participate in the sector.”
Lungu hit out at “mining investors who cry foul” whenever Zambia sought to increase its share of its natural wealth.
“We shall no longer tolerate mining investors who seek to prowl from our God-given natural resources, leaving us with empty hands,” Lungu warned.
“We shall no longer tolerate mining investors who cry foul each time we try to earn something from our mines through new tax measures.”
The government is locked in a protracted dispute with Vedanta Resources, a Mumbai-based conglomerate, over a subsidiary, Konkola Copper Mines (KCM), which is jointly owned with Zambia’s state mining arm.
The government last year placed KCM into liquidation, a move that was contested by Vedanta, the majority shareholder, and led to legal proceedings.
Lungu said the 2020-2023 recovery programme is aimed at helping the economy after the impact of the coronavirus pandemic.
It also seeks to restore macroeconomic stability, attain fiscal and debt sustainability and safeguard social protection, he said.
The programme was unveiled as Zambia is in talks with the International Monetary Fund (IMF) over a request for funding to carry out reforms.
The IMF on Wednesday told Zambia that its policies “need to be calibrated to restore sustainability while protecting the vulnerable and creating more inclusive growth.”
It said it would assess options in the coming weeks.
Hugely dependent on copper, whose price has been hit by the coronavirus pandemic, Zambia has seen its external debt surge to nearly $12 billion this year.
In October, it missing a key payment due on interest due on a bond, prompting the rating agency S&P to declare the country in default.
A month later, a grace period ended for payment on a $750-million Eurobond due to expire in 2022.
Failure to honour its obligations could see it officially declared in default, becoming Africa’s first economy to default during the coronavirus pandemic.