Court Rules For KCM Liquidator To Stay In Post

The presiding judge at the Lusaka Court of Appeal has ruled that the state-appointed liquidator of the Konkola Copper Mines (KCM) will not be discharged, despite a November ruling ordering proceedings to halt and to allow owners Vedanta to pursue arbitration.

Vedanta - which owns 20% of KCM through state mining investment firm ZCCM-IH - has been locked in a legal battle with the Zambian government since May, when the Lungu administration handed control of the mine to a liquidator. The government has accused Vedanta of failing to honour licence conditions, including promised investment, and the liquidator has threatened to split the company in two and potentially sell its assets. 

The India-based mining company has denied that KCM broke the terms of its licence and maintains that it will fight any attempt by the government to sell KCM assets to third parties.

On Tuesday, the court ordered for the liquidator to remain in place after representatives for Vedanta and the government failed to agree on the outcome of November’s ruling. 

“I direct that the order relating to the discharge of the provisional liquidator be removed from the settled order,” wrote Judge President Fulgency Chisanga. 

After the ruling, KCM liquidator Milingo Lungu said the judge’s powers were valid and that he intended to split KCM into two companies from Jan31, with asset disposal likely to follow.

However, with discussions between Vedanta and Zambia still ongoing in London, it is unclear whether KCM would be able to find willing buyers.

Peter Leon, Africa co-chair at the law firm Herbert Smith Freehils and a previous advisor to Vedanta, said “Whatever the judgment means, there’s no way the provisional liquidator can start disposing of KCM’s assets, because anybody who buys those assets would therefore effectively be acquiring tainted property and they would be party to an unlawful act”.