MAPUTO – Eurasian Resources Group and China Non-Ferrous Metals expressed interest in buying Konkola Copper Mines, should the Zambian government succeed in seizing it from Vedanta Resources, people familiar with the situation said.
Eurasian Resources, owned by three Kazakh billionaires, approached the government about two months ago, according to the people, who declined to be identified by name. CNMC also wanted to buy the assets, they said. The Chinese company offered to spend $2.5-billion on development, one person said.
At stake are copper mines and resources in one of the world’s richest deposits, which stretches from Zambia’s Copperbelt region into southern Democratic Republic of Congo. Zambia, cash-strapped and struggling to contain debt, says that Vedanta hasn’t met its investment promises and paid too little tax, while the company says it is a “loyal investor” that’s spent more than $3 billion in the country since 2004.
Eurasian Resources and CNMC declined to comment. Richard Musukwa, Zambia’s mines minister, wouldn’t immediately comment.
“KCM isn’t for sale from our perspective,” a spokesperson for Vedanta said by email. “While we remain open to dialog with the Zambian government, we will consider all options to preserve our legal rights.”
State-owned ZCCM Investments Holdings, which owns 20.6% of KCM, asked the Lusaka High Court on May 20 to liquidate the company because it hasn’t met the conditions of its license. The case, which is being challenged by Vedanta, was postponed to June 4.
For more on the history of Zambia’s copper industry click here
Vedanta, majority owned by Indian billionaire Anil Agarwal, says the deposits could be mined for another 50 years. The company valued the assets at $1.6 billion in its last annual report. Agarwal, in a "personal message" published in the Zambia Daily Mail newspaper today, said the attempted liquidation of KCM “can only hurt the country’s hard-earned democracy and investor-friendly status.”
KCM’s flagship operation is Konkola Deep, which extends almost a mile underground and is one of the world’s wettest mines, with 140 Olympic-sized swimming pools worth of water having to be pumped to the surface daily. The ore bodies also contain cobalt, a prized metal that’s used in rechargeable batteries that power mobile phones and electric cars.
Both Eurasian Resources and CNMC already have copper assets in Zambia and Congo.