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Vedanta seeks urgent talks after Zambian court appoints KCM liquidator

Konkola Copper Mines PLC and its controlling shareholder Vedanta Resources PLC appealed to the Zambian President Edgar Lungu to meet for urgent talks on the fate of the copper mining company, following a court order appointing a provisional liquidator.

Law firm Lungu Simwanza & Co. will act as provisional liquidator until the conclusion of the hearing of a petition brought by Konokola Copper Mines, or KCM, minority shareholder, state-owned investment arm ZCCM Investments Holdings PLC or until further ordered, the court order said.

Vedanta said in a May 21 statement that exponential increases in taxes, duties, fuel and power costs had placed an enormous and unaffordable burden on KCM. "The most recent restrictions and duty on concentrates have negatively impacted the running of the smelter and the much needed acid to run its operations," Vedanta said.

Aiming to reduce debt, Zambia has introduced new mining duties, increased royalties and plans to replace the value-added tax with a sales tax by April. Miners have opposed the move, warning that it may lead to about 21,000 job losses and US$500 million in capital expenditure cuts over the next three years.

Vedanta and KCM said they had not received formal notification of the court application and appealed to the Zambian government for a meeting to discuss KCM's future. KCM operates the Konkola mine and other assets in Zambia.

Bloomberg reported the previous week that Lungu had threatened to "divorce" Vedanta and Glencore after the companies said they were curbing operations in Zambia. Mines minister Richard Musukwa said the government had directed Glencore PLC's Mopani Copper Mines PLC to hand over two shafts to local contractors rather than close them.