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Vedanta appeals to South African court to protect Zambian business

The case has intensified concerns among international miners about resource nationalism in Africa.
Vedanta holds a majority stake in KCM, with ZCCM holding a minority stake. Picture: Supplied

Mining company Vedanta said on Thursday that it is seeking an urgent court order in South Africa to prevent Zambia’s mining investment arm ZCCM from winding up its disputed Konkola Copper Mines (KCM) business.

Vedanta is locked in a dispute with the Zambian government, which accuses KCM of breaching the terms of its licence.

Vedanta denies that KCM has broken the terms of its licence and says it will defend its assets in Zambia, Africa’s second-biggest copper producer.

The case has intensified concerns among international miners about resource nationalism in Africa.

A ZCCM spokeswoman was not immediately available for comment.

Vedanta said in a statement that it had obtained a temporary order in South Africa’s High Court allowing it to make an urgent request on July 16 for an injunction against ZCCM and a provisional liquidator at KCM.

Vedanta holds a majority stake in KCM, with ZCCM holding a minority stake.

“Vedanta will seek an interim court order declaring that ZCCM has breached the KCM shareholders’ agreement by pursuing winding-up proceedings against KCM in Zambia, and directing ZCCM to withdraw those proceedings,” the statement added.

Vedanta applied to the South African court because the KCM shareholders’ agreement makes provision for arbitration in South Africa.

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“Investing” in Africa has a great risk reward ratio. In this case it seems to be Risk = 1 Reward = 0

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