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Zambie : Report dismisses claims that KCM is loss-making

D 22 juin 2014     H 05:01     A Kabanda Chulu     C 0 messages

THE Zambian government must not believe the perception created by Vedanta Resources that KCM is a loss-making company that needs to be rescued by the state, says a UK-based civil society group.
But Vedanta Resources’ subsidiary Konkola Copper Mines public relations manager Joy Sata says the mining company does not want to discuss any aspect of the report as it is inaccurate and misleading.
In its report titled ’Copper colonialism - Vedanta KCM and the copper loot of Zambia’ Foil Vedanta, whose representatives visited Chingola recently, stated that Vedanta Resources made approximately K2 billion (US$362 million) or 12.9 per cent of their total group revenue from KCM in 2013.

"This is according to the company itself and analyst reports. Vedanta has created the perception that they are an Indian company, and is making such a loss at KCM that they may need to be rescued by the state. In fact, KCM is one of the highest profit-making subsidiaries of the parent company," it stated.

The report compiled by Miriam Rose and Samarendra Das stated that Vedanta bought KCM for a fraction of its true value that resulted in Zambia losing up to US$1.4 billion in total.

"But this is the company which has recorded some of the environmental and social abuses in Zambia including pollution of the river Kafue in 2006 and 2010..." it stated. "Vedanta’s tax contributions in Zambia are close to zero, and they even brag that 50 per cent of tax paid is through employees’ Pay As You Earn (PAYE). Vedanta hide these truths in Zambia by paying former journalists as PR agents to keep their image clean."

The authors demonstrate that this style of operation is a pattern for Vedanta across India and elsewhere, where they are consistently opposed by people’s movements and were under investigation by authorities for corruption and legal violations.

"In Chhattisgarh, India, they bought BALCO’s bauxite refinery, smelter and mines for US$89 million in 2001 when it was worth around US$800 million," it stated. "Vedanta Chairman Anil Agarwal is currently under investigation by the Central Bureau of Investigations in India over the original disinvestment of 51 per cent of Hindustan Zinc Ltd (HZL) to Vedanta for only US$72 million, claiming the deal was considerably undervalued, and may have lost the government hundreds of millions of dollars in revenue."

The report suggests that Vedanta might also be exporting considerably more copper than they claim in Zambia as well as cobalt and other minerals.

"Citizens must enhance the monitoring of trucks leaving their facilities to estimate the true amounts," it stated.

The report also looks at the real interests behind mining companies in Zambia.
"There is also need to question foreign governments such as Norway and the UK, who play a duplicitous game of funding transparency and accountability projects on mining through NGOs and the Zambian government, while also profiting from the abuses of the very same mining companies."

Commenting on the report, Das stated that it was shocking to discover how little information Zambian authorities and communities had about their own resource and the companies exploiting it.
"Despite its role in the economy, copper is the elephant in the room in Zambia. This report aims to expose the real interests controlling Zambia’s copper industry, from banks and investment firms to foreign governments and NGOs," Das stated.

And Rose stated that mining companies were commonly called ’investors’ in Zambia but what they were doing was far from investment.

"It is short-lived extraction and loot of resources, leaving behind only environmental and social damage which will be paid for by future generations. There is limited time left for Zambians to change the course of history, make links with peoples’ movements opposing these policies elsewhere and truly profit from this resource before it is all gone," she stated.

When asked to respond to the allegations raised in the report, Sata said Vedanta, through KCM, had invested more than US$2.8 billion in its mines in 10 years while paying out US$68 million in dividends to shareholders and had extended the mine life substantially.
"We have read the report published in January 2014 and do not wish to discuss any aspect of it ; their report is inaccurate and misleading. KCM has increased jobs from 13,000 to 18,000, doubling wages in real terms, and has provided technical training to many thousands of Zambians," Sata stated in an email response. "KCM has paid US$120 million into social investment programmes across the country ; investing in schools, hospitals, agricultural and educational schemes, as well as sports and recreation.

She stated that Vedanta was committed to Zambia and was contributing to the country’s wealth and the continued development of natural and human resources.

"The company aims to produce over 400,000 tonnes of copper per annum, upon completion of its flagship, Konkola Deep Mining Project (KDMP), and aspires to play a leading role in making Zambia one of the leading copper producers in the world," stated Sata.

Kabanda Chulu

Source from http://www.postzambia.com