Vedanta’s Zambia Unit Might Restart Output at Copper Pit by May

Konkola Copper Mines Plc, Vedanta Resources Plc’s Zambian unit, will probably resume production at a pit that halted output in December after a mining contract was not renewed.

“Most likely, we should be looking at the next three months or so,” for production to resume, Joy Sata, a spokeswoman for Konkola Copper Mines, said by mobile phone from Chingola, in Zambia’s northern Copperbelt province. “We are already mobilizing equipment.”

The closure of the four-kilometer-long (2.5-mile) pit is costing the company $1.5 million daily, according to a Feb. 15 London High Court judgment, which amounted to $90 million by March 1. The mine accounts for a “substantial percentage” of gross domestic product in Africa’s biggest copper producer, according to the document.

Konkola Copper Mines, or KCM, as it is known, didn’t renew U&M Mining Zambia Ltd.’s mining contract at the Chingola F&D open pit, which expired Dec. 31, the company said Jan. 10. It ended another contract to mine waste at the operation Jan. 28, saying U&M failed to meet production targets for five straight months. The contract miner, owned by Brazil’s U&M Mineracao e Construcao S/A denied any breach, according to the judgment.

KCM obtained a court order in Zambia on Jan. 31, compelling U&M to immediately vacate the mine, and hand over equipment to the Vedanta unit worth about $12 million. The court set the return date for Jan. 31, and later postponed it to March 5, according to the London judgment.

Block Order

U&M sought to block the order in the London High Court, which Justice Blair dismissed. Under their contract agreement, the companies will take their dispute to the London Court of International Arbitration. Sata could not immediately say when the mediation will begin in the March 1 interview.

“The evidence is that conditions at the mine are tense,” Blair said of the F&D pit. “All work at the mine has stopped. U&M has begun to lay off workers.”

The mining contractor’s Zambian unit called the termination “unilateral and unexpected” in an open letter to its employees, unions and government, published in the Lusaka-based Post newspaper.

The case is U&M Mining Zambia Ltd v Konkola Copper Mines Plc.

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