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Zambian President and Vedanta boss meet as mining giant faces expulsion2 minutes read

The copper mining giant faced expulsion from the country for allegedly failing to pay taxes

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Zambian President and Vedanta boss meet as mining giant faces expulsion
Zambian President Edgar Lungu. (Minasse Wondimu Hailu / AFP)

Zambia’s leader on Wednesday held talks with the Chairman of Vedanta Resources after the copper mining giant faced expulsion from the country for allegedly failing to pay taxes, the presidency announced.

London-based Vedanta is the majority owner of Zambia’s largest copper mining firm, Konkola Copper Mines (KCM), which has been at the centre of a stand-off with the government. The state-owned ZCCM-IH is a minority shareholder in KCM. 

READ: KCM may leave Zambia as president vows to dissolve copper giant

Zambian President, Edgar Lungu has vowed to dissolve the firm, accusing KCM of violating its operational licence and not paying all its taxes.

Vedanta has denied the allegations and is locked in a legal battle with the government.

Lungu has targeted the mining sector to generate tax revenue as Zambia struggles with growing debt, and has told international mining companies to leave the copper-rich country if they opposed government policy.

Zambia is Africa’s second-biggest copper-producing country after the Democratic Republic of Congo, and the sector is a major employer.

In a statement, the presidency said Lungu met Vedanta chairman Anil Argawal at the request of the investor.

“The President accepted to meet him to listen to what he had to say,” the statement said.

READ: Vedanta to challenge Zambia KCM’s provisional liquidator appointment

Argawal “expressed his desire to continue running the mine” and pay debts owed to suppliers and restructure the company shareholding, it added.

However, Lungu said he would not back down because the “position that the government has taken has the support of the people of Zambia and the meeting will not affect any ongoing liquidation process”, the statement read.

In May, a Zambian high court appointed a provisional liquidator to dissolve the company, but the High Court in Johannesburg ordered a halt to any sell-off of KCM assets.

READ: Vedanta to explore dialogue with Zambia over mine liquidation

Vedanta approached the South African High Court because Johannesburg is set to host the arbitration process.

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South Africa Unions Reject Government Plan to Review Pay

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The South African labour unions have rejected a government proposal to review planned increases for civil servants days before they were due to be implemented.


The Public Servants Association, which represents 230,000 government workers, says the state has asked to review the last leg of a three-year pay agreement because it couldn’t afford it.


The Public Servants Association says the timing of the proposal, a few days before the adjustments were due to be implemented, speaks of a government that regards public servants as an easy target to resolve its financial woes.


The Central Executive Committee of the Congress of South African Trade Unions, the country’s biggest labor federation, says if the proposal made its way into the budget speech it will be seen as a declaration of war.

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South Africa Raises $1.1 Billion Bailout for Ailing Airways

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South Africa has almost doubled its funding for the national airline to 16.4 billion rand ($1.1 billion), cash which will go towards supporting a restructuring plan for the almost insolvent carrier.


The bailout will be used to service and pay debt previously guaranteed by the state over the “medium term,” according to the country’s Finance Minister, Tito Mboweni.


This amount compares with 9.2 billion rand earmarked for South African Airways in October.


SAA has been a drain on the National Treasury for several years racking up losses of more than R32 billion over the past decade.
Late last year, the government placed the airline on a local form of bankruptcy protection, and administrators have set about reducing costs by closing routes and considering asset sale.
However, the Finance Minister has often stated his reluctance to support SAA while faced with bigger problems such as the $30 billion of debt owed by state-owned power utility Eskom Holdings.


In addition to Treasury funds, SAA was last month, given access to R3.5 billion from the state-owned Development Bank of Southern Africa.

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South Africa to Establish $2 Billion Sovereign Wealth Fund

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South Africa has announced that it will use money from the sale of broadband spectrum and mining royalties to establish a 30 billion-rand ($2 billion) sovereign wealth fund, according to the country’s Finance Minister,Tito Mboweni.


Its establishment was first mooted at least 10 years ago.
The proposed fund comes at a time when Africa’s most industrialised economy is struggling to contain rising debt amid sluggish economic growth and a budget deficit projected to widen to a near three-decade high of 6.8% in the coming fiscal year.


Mboweni says the legislative framework for the fund will be submitted to the parliament.


Funding will come from the government’s plans to sell broadband spectrum this year, along with royalties from petroleum, gas and mineral rights, as well as the sale of non-core assets, future surpluses and savings.


The government is also pressing ahead with plans to form a state bank that will operate as a retail financial institution premised on commercial principles, he said.


However, the Reserve Bank is yet to grant the proposed lender an operating license.

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