The Zambian government has been challenged to provide a comprehensive update regarding the Konkola Copper Mines (KCM) status and when the mine will get into full production after it was last year handed over to Vedanta Resources Limited.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, Economist Yusuf Dodia said noted that the lack of information from both the government and the investor has led to speculation among the public, which can be detrimental to the nation’s investment prospects.
In September 2023, the government handed over the ownership of Konkola Copper Mines -KCM- to Vedanta Resources with expectations that Vedanta would commence operations before the end of 2023. KCM runs Nampundwe Mine in Shibuyunji District, Konkola Mine in Chililabombwe, Nchanga Mine in Chingola and Nkana Smelter in Kitwe.
Dodia said, “We have seen reports that Vedanta has been in financial crisis for 2 – 3 years in terms of the money they owe abroad and the question is where are they going to get the money to invest in KCM if they are having financial challenges abroad.”
Dodia emphasized that it’s crucial for the government to provide regular updates on the situation, to ensure that the public is informed based on facts, not speculation. He has also predicted that it may take one or two years, or possibly even until 2026 before any investment in the mining sector shows significant results.
“So we would like to see what is happening with KCM in that respect as there are reports showing that Vedanta is transferring its ownership in KCM but what we’re interested to see is do they have any capacity to invest in KCM so that the mine can be back on the productive and do they have enough money to pay off workers and creditors. So it is something that we need to get feedback from the government on.”
Dodia added that “I don’t think we are going to see a boost in copper production this year because I think it will take a much longer for any investment to show so I think one or two years or maybe not 2024 maybe don’t 2025 or 2026 but not on this year.”
He noted that investors that are coming to Zambia are pledging to put more money in but on the ground what they are putting in is much smaller than their pledges like is the case with Mopani’s new investor who pledged to invest $1.1 billion but on the ground they are putting in small amounts.
“I think including Mopani Copper mines we need to get updates from the government we’re not getting anything back from the mines themselves nor from the government so unfortunately when there is an information blackout it leaves the public to speculate so those people that are working on the copper belt who are seeing what is happening and are making their assessments for example they would say no nothing is happening that’s becomes the feedback I think it’s not a good idea to allow these kinds of investments to be informed to the public through speculation I think it’s important for the minister of mine to make some statements so that the public is updated on what is going on.”
“we are not likely to see any value coming from the two mines for the next 12 months because of the amount of investment that needs to be able to carry out the revamping of these mines.”
“So far we have not seen them showing that they have the resources as their pledging are not investment so when we see evidence that Vedanta is going to invest then we can be hopeful of them becoming productive.”
“my comment is that it’s always good to make public some of these activities that are going on when they are put in the public domain the nations when they are in the dark the public speculation leads to dissatisfaction amongst Zambian people so I would urge the authorities to do as many press briefings as necessary to keep the public informed on progress and what is going on so that the dialogue can be meaningful because it will be based on facts and not speculations.”
