Konkola Copper Mines says the closure of its Nchanga Open Pit is costing it US$1.5 million daily.
This is according to a March 5 London High Court judgment obtained in Lusaka.
The mining giant claims that it has now lost over US$90 million as at March 1 following the mine closure.
The court document also notes that KCM accounts for a substantial percentage of Zambia’s gross domestic product.
KCM did not renew U&M Mining Zambia Limited’s mining contract at the Chingola F&D open pit, which expired on December 31.
The firm also ended another contract to mine waste at the operation on January 28, saying U&M had failed to meet production targets for five straight months.
In the court document, the contract miner, owned by Brazil’s U&M Mineracao e Construcao S/A, denied any breach of contract terms.
KCM obtained a court order in Zambia on January 31, compelling U&M to immediately vacate the mine, and hand over equipment worth about US$12 million to the Vedanta unit.
According to the London judgment, the court set the return date for January 31, and later postponed it to March 5.
Under their contract agreement, the two companies will take their dispute to the London Court of International Arbitration, but no starting date has been given for the mediation.
All U & M employees have been fired.
But KCM says it expects to resume production at its Nchanga Open Pit mine in the next two to three months.
KCM Spokesperson Joy Sata revealed that the mining giant is looking at resuming production in the next three months or so.
Ms. Sata said KCM is already mobilising equipment in readiness for the resumption of operations.
Nchanga Open pits never closed down when the Francis Tembas of this world were running the operations. Never! That was is indeed a guru in mining and yet the man was not even a degree holder but obtained a diploma from Canada in his old age. Nchanga never shut down. But alas! The degree holders; the Obino Kalelas and Cross Silwambas played a pivotal role in shuting the mine. Despite their education, they have no leadership qualities and cannot run any mine operation. Shame….!!! Bunda bwa ma degrees, no wisedom and leadership skills! You guys have gone down in the history of that mine that you successfully managed to shut the mine. Shamuneni bane..!!! Shame…!!!
So Chikake, in this age, you still don’t have a degree?
Its unfair of you to point out Obino and Cross as the reason the Open Pits have closed down…which is not even the case (Open Pit which is being run by Cross is still Open). The Vedanta and U&M have failed to work together, what has Cross,Obino and other degree holders have to do with that? Themba did his part….The few zambians in authority are doing well with the little authority they have unlike the unmatched authority Themba and the Sikamos of their time had
I miss the ZCCM days.
Look at the copperbelt today…its a sorry state
Why poverty in the midst of plenty?
MMD INVESTORS. VERY FAKE!
Its obvious now that you could not have obtained a degree even in old age! Your reasoning is too shallow!
Ya!ya!ya! You have reminded me of real men. Francia temba brave nchangavrangers chairman, shaba kwisa inshimbi ishi?
Ngani nika Cross Silwamba, katolaukauka fye with no direction. Ba Kalela bafisamina mu church ati ba elder but ulupato fulufulu na jealous yakufwa.
And shamelessly grabbing already allocated plots in Chingola in conjunction with the corrupt chingola council officials. Ati church elder, bishop or whatever you call yourself… Mr. Kalela one day you will pay for this, not all days are Sundays.
Aba baffikala balefwaya fye ukuleta mwenye banabo.sata man of action please
lets mationalise these mines.baletwangasha abana ba mbwa aba
the employees of u&m are not fired. They are still reporting to the site and some are on leave. They are getting their full monthly salaries. We should commend this company. Please get your facts right.
KCM is one company that does not honor its agreements and has an insatiable appetite for court disputes. The glencore case will look like childs play when a serious minded government decides to look into their shady operations. It will soon become clear why this mine was sold for a price less than that of didier drogba, how zccm relinquished to the ‘blue shirts’ at vedanta transactions of copper sales made prior to the purchase of the mines, allowing vedanta to recoup its investment within three months of purchase. It will one day become clear how in 2009 vedanta’s recoveries in their smelters more han tripled owing to transfer pricing schemes with kcm resulting in kcm losses. It will become clear one day how a certain comerce minister, a vice president and a former president benefited
right you are. Have you seen the video on you tube about the shady Glencore called Stealing Africa: Why Poverty?
Spot on!!
But who can help us act on all this rich imformation you have.
SATA promised to sort these Indians when he comes into power but looks like he is mute. Everybody is aware of the rot going on in KCM and these other mines on the Copperbelt and N/W province. No wonder the miners and youths on the C/B overwhelmingly gave SATA the ballot because they believed he could improve the situation on the C/B. Looks like all politicians are the same. They are just there to enrich themselves and care for Nobody. P.F is incapable of sorting out the mess in this country.
He understands nothing how does he even start.
KCM full of court cases,the company has the tendance of terminating the contracts unnecessary and never wins any case in the courts of law.Another case is pending at supreme court for termination of contracts with employees who were on fixed contracts for two years.The company has full of crooks,corruption to bribe judges for its favours.If the govt can nationalise it,people can be saved from hunger which is killing people in copperbelt.
The article in not 100% percent true, there is alot of lies in this article ba Lusakatimes.
I have not head of any U&M employee who has been fired so far.
Quick to announce losses but when it comes to declaring profits …..mmmmmm…these mining companies!
That’s typical of these guys they will even inflate the figures in dollars!
#1. Dont blame your Zambian engineers for something which is clearly beyond their control. Termination of contract for U&M is a huge issue made by very senior management probably in consultation with the board. Secondly Indians are a difficult lot to do business with. Apologies to those Indians who do not fit in this sterotype. But in all honesty the Indian business culture has a terrible psyche of squeezing blood out of a stone no matter what, winner takes all & let the the other party go with absolutely nothing or be really crushed. Probably emanating from their discrimatory caste system in which some people are born into servitude (16 million strong/and life goes on) A win-win situation is not good enough for likes of India’s Vendatta or Tata. Zambia’s needs to be CAUTIOUS in Deals
Continued: On this very LT there is an article about another Indian run company Airtel being the highest in complaints from customers. When it was Celtel and later Zain it was not that bad but enter Airtel and it was Thing Fall Apart not only for customers but employees aswell. Even their entry was marred by cries corruption and scheming to short change Zambian sharehholders of Celtel. Independent valuers pegged the share price at 1200ZMK, Airtel insisted on 700K and made trips to State House. RB reputation on such deals need no elucidation and Airtel won. But it shows a penchant for minimal input maximum returns regardless of who /how many get hurt. That the Indian psyche
Having read a vedanta policy paper I acquiered recently, its clear in black and white that they are only averse to inducing political leaderships support using cash in jurisdictions where it is clearly spelled out as a crime. They aggressively pursue growth at any cost as long as someone else bares it. Zambia will pay a heavy price one day. These chaps are currently routinely falsifying emissions data to ZEMA, underdeclaring profits through inflated contracts with indian companies mascarading as Zambian coys, with relaxed tax on secondary coPper, they will tamper with cu assays to lower grades of the metal and steal tones of material at no cost. Airtel has equaly gone the kcm rout outsourcing most operations at inflated rates with indian subsidiaris of otherwise credible multinationals
Watch the video about ruthless Glencore on you tube Stealing Africa: Why Poverty? Everyone wants a piece of Africa and they do not give a toss about the locals, about emissions nor paying taxes as all the money goes back to their countries.
China is in Zambia for the resources and these so called politicians do not give the monkeys about the citizens. They privatised the mines and every crook around the world with all their cohorts have every trick in their crokk books to have all our resources as we suffer. Late Mwanawasa tried to introduce mining taxes but unfortunately he died before they could be implemented, then came RB who had no clue about what it entailed did not implement the mining taxes and then the stroy goes on and on and on.
They are loosing that much money on a daily basis,I can only imagine how much they made on a daily basis before the closure.
These Indian Investors can do such things in Zambia as we allow them…UK has Indian investors in Steel and car manufacturing. Their workers are handsomely remunerated £30K + 28 day holiday and bonus (4 days on 4 days off) and that’s for a mere Grade 12 production assistant. You will never hear such stories of breach of contract or the dreadful ones submitted by bloggers on this thread.
The effects of privatization. Copperbelt in the ZCCM days was the place to be today they are just ghost towns. Thanks to Chiluba for his actions. With copper prices at close to $8000 per ton on the London Mercantile Exchange this is a clear case where good revenue that is returning back to zed shall be lost. The Boom days in Zed are coming to an end brace yourself and buy dollars to keep rebased kwacha is going to hit the roof again.
One day the copperbelt will sneez and all of Zambia will catch a cold. The hopes of many Zambians have been difered. For far too long. Each time the citizenry have sought to cash In on their heritage, cash in on the their investment in human capital but instead they are met with an insufficiently funded account. Sad that While the entire world, even the World Bank who have long been known to support neo liberal economic policies have for the past five years been singing about our need to get more from the mines we have mining firms like KCM with artificial, self inflicted losses patronising our Country telling us they have been making losses due to a closed open pit mine which they in their crooked wisdom decided to close. Simply because they did’nt want to honor their contractual…
PF must just re-nationalise KCM and some other mines or bring back ZCCM. Copper will finish one day so we might as welll just re-nationalise so that we can finish it ourselves as Zambians.
It is reported that KCM has lost $90 million since 1st March 2013 due to the closure of the mine. Assuming everything equal and constant through out the year this would translate into a turnover of about $5.4 billion, however, this is never declared to ZRA and come year end only a small turnover is declared to the Government. KCM by their own admission here should be paying over to the Zambian Government hundreds of millions in USD export duty alone. Zambia is being cheated out of billions of Rebased Kwachas through transfer pricing. Do a Chavez and nationalise these cheating mines
so you all are fighting over a piece of land that used to be so but now shut down shame on you all foolish people.