COUNTRY IN FOCUS
ZAMBIA:
ROADBLOCK TO
GOOD BUSINESS
Zambia’s volatile relationship with foreign-owned mining companies
continues, and the long-term effects might prove to be devastating, writes
Nicolaas Steenkamp and Leon Louw.
T
he Zambian government continues to upset the
international mining cart. The recent outburst by
Richard Musukwa, Zambian Minister of Mines, at the
2020 Investing in African Mining Indaba, is enough to deter
even the most optimistic investor. In a scathing attack on
Indian company Vedanta Resources, owned by business
mogul Anil Agarwal, Musukwa said that the company had
been involved in criminal activities and that Zambia had
been the victim and not Vedanta, as popularly portrayed in
the mainstream media.
Musukwa’s pronouncement was greeted with loud applause
by several representatives from other African governments.
However, investors and mining companies were stunned into
silence. Musukwa continued his tirade, saying that Zambia does
not welcome any ‘bogus’ investors in the country, and that all
investors have to ‘follow the law’. “Vedanta had breached the
environmental law and conditions for their grant. They last
produced in 2014 and are thus locking up the resource, and
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we won’t allow that,” said Musukwa. He added that the country
needs African and international support to make sure Vedanta
pays the price for what they have done.
The bitter row between Zambia and Vedanta is symptomatic of
the constrained environment in Zambia as government once
again cracks down on mining companies to increase its share
of the pie in the resource sector. Mining companies in Zambia
have been subjected to periodic political interference, including
a stint of nationalisation. The Zambian government and Vedanta
remain embroiled in what is becoming an ugly scuffle about the
Konkola Copper Mines (KCM). In May 2019, the African nation’s
government mining vehicle ZCCM, sought the liquidation of
KCM, accusing the copper miner of breaching the terms of
license and owing money in unpaid taxes, which the company
denied and decided to fight through international arbitration.
Tension at boiling point
Over the last year there has been increasing tension between
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