Vedanta Unit Told to Pay Zambian State Company $103 MillionBy and
ZCCM-IH wins London default judgment over copper-price deal
Vedanta unit KCM also ordered to pay 80% of ZCCM’s legal costs
Vedanta Resources Plc’s Zambian unit must pay the southern African country’s majority state-owned mining investment company about $103 million after a London ruling related to a copper-price agreement.
ZCCM Investments Holdings obtained a default judgment in the U.K.’s High Court of Justice against Konkola Copper Mines on Dec. 16, it said in an e-mailed statement Monday. KCM said in an e-mailed statement on Tuesday that it’s consulting with ZCCM-IH and “other relevant stakeholders to resolve all outstanding issues within 30 days, in accordance with the court’s ruling.”
KCM hadn’t paid the money owed under the copper-price participation deal because of “operational and financial challenges,” ZCCM-IH, which has a 20.6 percent shareholding in Konkola, said in its 2015 annual report. The Vedanta unit was in talks with ZCCM-IH and the government to pay the claim, which needed to be settled from available cash flows, KCM Chief Executive Officer Steven Din said Nov. 10. The company was at that point hoping to resolve the matter out of court, after ZCCM-IH filed the case in June, he told investors on a call.
“We are working together to resolve this matter amicably,” Din told reporters at a joint press briefing with ZCCM-IH in Lusaka, Zambia’s capital, on Tuesday.
The court ruled that ZCCM-IH is entitled to recover more money from KCM if it’s found that the company transferred funds to Vedanta, which would have been in breach of the pricing agreement.
ZCCM-IH is also claiming damages from First Quantum Minerals’ Kansanshi unit in Zambia, in which it has a 20 percent shareholding, in the Lusaka High Court, and has started arbitration proceedings in London over the same matter related to a loan it said Kansanshi gave First Quantum that wasn’t at arm’s length terms. First Quantum denies any wrongdoing.