LUSAKA (Reuters) -Vedanta Resources and the Zambian government on Monday sealed an agreement that restores the Indian company's ownership of Konkola Copper Mines (KCM), ending a protracted ownership battle that stifled investment.
Zambia's Mines Minister Paul Kabuswe witnessed the signing of the agreement between state firm ZCCM-IH with Chris Griffith, Vedanta's head of base metals, in Lusaka, officially handing the copper assets, which the state seized in 2019, back to Vedanta.
The agreement will lead to the re-appointment of the KCM board and withdrawal of all legal challenges that are in court, including removing a provisional liquidator who was in charge of the assets, Kabuswe said.
The government, which owns a 20% stake in KCM through ZCCM-IH, said in September it had reached an agreement to allow Vedanta to resume control of the mines and smelter after the company pledged to invest about $1.2 billion at the operations.
Billionaire Anil Agarwal's Vedanta mounted numerous legal challenges, including suing Zambia at the arbitration court in London, to regain control of KCM after former president Edgar Lungu's government orchestrated the seizure of the copper assets by forcing the operations into liquidation in May 2019.
While the Zambian administration accused the company of failing to invest to boost copper output, the forced takeover and the legal challenges stifled investments and nearly crippled operations.
The government wants KCM assets to "come back to life," Kabuswe said, adding that Vedanta must repair strained relationships with the communities by honouring its investment pledges.
"You have to live by what you have told us (that) this is the investment that will be coming," the minister said.