Indian mining giant Vedanta Resources has been directed by London High Court to pay USD 100 million to a state-owned Zambian investment company related to a 2013 copper price agreement.
Vedanta's Konkola Copper Mines Plc (KCM), based in Zambia, said the issue was related to the copper price participation deal with Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH) dating back a number of years and the court decision is a "request" for it toresolve the matter within 28 days.
"KCM and ZCCM-IH have been engaged in discussions with regards to the price participation settlement agreement, which was entered into by both parties in December 2012...We remain fully committed to fulfilling our financial obligations," KCM CEO Steven Din said in a statement.
ZCCM-IH claims the UK court has also ordered KCM to reimburse ZCCM-IH 80 per cent of the costs it has incurred in pursuing its claim.
The company's statement said: "ZCCM-IH has been successful in its application for default judgment. KCM has been ordered (on 16 December 2016) to pay all sums owed to ZCCM-IH pursuant to the Settlement Agreement (plus associated contractual interest) within thirty (30) days.
"Further directions have been given to determine whether KCM made payments to Vedanta Group Companies in breach of the prohibition on doing so under the Settlement Agreement. If and to the extent it is determined that such payments were made, ZCCM-IH will be entitled to recover additional sums from KCM."
Konkola Copper Mines (KCM) is one of Zambia's largest copper producers and one of the largest private sector employers in the country, with operations in four locations, namely Chingola, Chililabombwe, Kitwe and Nampundwe.
The majority shareholder of KCM is London-listed Vedanta Resources, which holds a 79.4 per cent stake, while ZCCM-IH has a 20.6 per cent shareholding in KCM.
In terms of its future business plans, KCM added: "Vedanta remains committed to the Group's operations in Zambia, which is reflected by the significant investment of over USD3 billion in KCM since 2004.
"Vedanta and KCM have a 50-year vision to continue mining for copper in Zambia and we look forward to further strengthening our relations with all stakeholders, including ZCCM-IH.
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