…says high indebtedness, insolvency and a burden of US$2.5 billion liabilities compelled the PF government to liquidate KCM to save it from total collapse
BY NATION REPORTER
KONKOLA Copper Mine (KCM) was threatened with insolvency as a result of its high indebtedness, with a burden of US$1.567 billion in liabilities, exceeding its total assets about US$123 million and could only be salvaged from total collapse through liquidation, Richard Musukwa has disclosed.
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And Mr Musukwa, the former Mines and Mineral Resources Minister in the Patriotic Front (PF) government says it will be criminal and reckless to bring Vedanta Resources back at KCM because the Anil Agarwal’s company had lamentably failed to run the mine.
But Green Party leader Peter Sinkamba says the previous government had committed an illegality by attempting to resolve the KCM problems via liquidation because according to him, such a process was not provided for in the Mines and Minerals Act.
I get surprised when I hear the theatre and drama that the PF left a mess. By 2013…I was not minister then, a technical audit report on the operations of KCM was conducted and we had to operatinalise the report. It was discovered that high indebtedness and a threat of insolvency had made operations by Vedanta at KCM difficult.”
“KCM was headed for total collapse and it failed in everything and the PF then as a responsible government had to take action of compulsory liquidation and a liquidator was appointed to protect the assets of KCM from being run down by Vedanta. At the time it was being liquidated, KCM had accumulated US$2.5 billion of its liabilities through suppliers, banks, contractors among others,” Mr Musukwa said.
Speaking when he featured on FM Radio Burning Issues Programme yesterday, Mr Musukwa said the mining conglomerate had serious challenges which had started in 2013 and started blackmailing Government by attempting to lay off thousands of miners.
He disclosed that Vedanta Resources had started defaulting on many of its obligations including stator and that when its financial challenges hit the roof, it threatened that it was going to lay off about 1, 529 workers.
He said the PF government would not allow the firm to arm twist government at the expense of not complying.
Mr Musukwa said a technical report by a group of technocrats revealed that the firm was highly indebted and that in 2013 it had liabilities of US$1.567 billion which was even exceeding its assets of an access of US$123 million. He said the firm also had defaulted on loan from Standard Bank which was at US$700m an indication that the operation of the firm had become questionable. “I get surprised when government officials want to behave like they are Vedanta’s spokespersons…hey, for heavens’ sake, stop that. Vedanta has highly paid people speaking on its behalf. If government did not liquidate KCM, there would be nothing to talk about.”
“…But what has changed for the UPND to bring back Vedanta. In opposition, the UPND said we had delayed to send Vedanta away.
They said they would have sent Vedanta packing much earlier. There is no doubt that KCM under Vedanta has no future,” Mr Musukwa said.
But Peter Sinkamba said while there was no doubt that KCM through Vedanta had been plunged into serious operational challenges, resolving the matter through insolvency was illegal, and therefore null and void.
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