By NATION REPORTER
GOVERNMENT is likely to suffer a rigmarole of lawsuits from 10 local mining companies whose surface mining rights are to be severed following the signing of the Implementation Agreement between Vedanta Resources Holdings Limited (VRHL) and ZCCM Investment Holdings.
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Government has agreed to the condition that surface mining rights of the mining companies operating within KCM area under the new ownership are encroachers and would have to vacate their premises in preparation for Vedanta to commence operations.
The lawsuits could cost government millions in dollars should the displaced companies claim compensation for losing their mining rights as well as their mining licences.
According to a signed Implementation Agreement, the 10 mining companies that would be forced to cease their operations include Rephidim, Zuka Mining, Anistrida Shangula, Kalymnos, China Copper Mine, Kupros Multipurpose Coop Society and Moxico Resources.
Others that have lost their surface mining rights are Kumbele Mining Company, Davis Simwinga, Makonde Ngosa Sampa and Chillerton Group Ltd.
The affected companies are said to have encroached into KCM mining area and Vedanta has demanded for their removal under the clause of: Removal of encroachments and the reinstatement of the disposal surface rights.
Vedanta has also demanded the disposal, via sale of lot 694, Chingola to Moxico Resources Zambia Ltd, Sub1 of Sub E farm 928 to Sensele Enterprises and sale of farm 1452 to Sensele Enterprises.
And now, sources are saying the Vedanta/KCM transaction is a disaster that shall destroy the economic activities of Copperbelt and leave the region in a worse situation than it has been the past few years, sources have disclosed.
So far, signed documents are to the effect that Zambia stands to lose billions of dollars should government proceed to execute both the Implementation Agreement and the Shareholders Agreement which contain clauses that have been rejected by all technocrats because the items are largely favouring Vedanta rather than the government and ZCCM-IH.
According to documents, the execution of the deal is being dictated by Vedanta which technocrats have complained has inserted items not discussed in the Committee of Ministers meeting or agreed between the parties.
So far, the Minister of Finance has agreed to provide a written undertaking confirming that none of the KCM Group shall be liable to pay any duty or similar taxes on or in relation to any imports of concentrate for at least five (5) years.
Government of the Republic of Zambia has also accepted that Vedanta would have to pay 50 percent of the aggregate amount payable to the deferred creditors instead of 100 percent as it had been announced, which is deferred in terms of the proposed credit scheme of agreement.
“The Vedanta Parties shall and shall procure that as soon as reasonably practicable, waive or write off an amount equal to 50 percent of the aggregate amount payable to the deferred creditors in terms of the proposed creditors scheme arrangement.
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