KCM/Mopani deals: A case of untimely inaction being worse than untimely action

KCM/Mopani deals: A case of untimely inaction being worse than untimely action

Mr Hakainde Hichilema’s government promised to sort out the issues of Mopani and KCM by the end of July. Today the dates have been changed to “we don’t know when”.

Clearly, after several months of illusions and posturing over Mopani and KCM, reality has dawned on Mr Hichilema and his far-right UPND government and they are now running back and forth. Even the lies have dried up as the truth steadily seeps in through the cracks on these two transactions. They are lost and stuck, and literally dangling from the ceiling like bats in broad daylight.

What’s the problem? What’s troubling them?

On KCM, the trouble is that Vedanta has spent money and promised to be given back the mine based on agreed terms, including some Key Performance Indicators that Mr Hichilema’s government has included in the draft agreement.

The Key Performance Indicators include the following:

  1. An investment of more than $1 billion to develop KDMP;
  2. Salary and wage increments for KCM staff;
  3. Assume and pay-off debts owing to suppliers and contractors to KCM. These will be mainly debts incurred by the Provisional Liquidator and may be upwards of $300 million, excluding the electricity bill.

Should the Key Performance Indicators not be met, Vedanta will be compelled to offer its shares in KCM to ZCCM IH at a price. It would appear it is the asking price from Vedanta that might now be delaying the conclusion of the deal.

Vedanta is asking for upwards of $2.75 billion should the government invoke the Article to takeover the mines if Vedanta fails to attain certain Key Performance Indicators. It is incomprehensible that such an Article would even be considered because one wonders what safeguard measures have been put in place to safeguard GRZ/ZCCM IH/ and the people of Zambia, who are the ultimate beneficial shareholders in ZCCM IH, from Vedanta should Vedanta deliberately underperform so that ZCCM IH triggers the Articles for the Vedanta shares to be sold to ZCCM IH in the name of not meeting KPIs for Vedanta to automatically be owed $2.75 billion by ZCCM IH.

Should this information we have be true, then this imminent deal between Mr Hichilema’s government will surpass the Lungu government’s $1.5 billion deal with Glencore over Mopani.

Noticeably, there is something fishy about this deal and it can only be because Vedanta may have parted with some money to allow for such a bad deal against Zambians to be tabled for finalisation.

It cannot be wrong to assume that this deal might have an upside for some government officials pulling strings to make it happen. Your guess is as good as mine as to what level such deals are given the go-ahead.

As for MCM, it appears that after almost concluding with a Chinese group, the government has reopened the bid process by allowing a possible last-minute entry to be considered for its acquisition.

Whatever the reasons, it is now two years since Mr Hichilema was elected into office to manage Zambia with the promise that “Bally will fix it”. It appears Mr Hichilema either underestimated the challenges Zambia is and has been facing, or that may be “Bally” had no plan even after being given 16 years to prepare for the job.

The delayed capitalisation of the two mining operations has been and is too painful for Zambia, especially for the residents of the Copperbelt Province. Statements to the effect that the delay is “because the government wants to safeguard the interests of Zambians” are hollow and deceitful because it is clear that Mr Hichilema and the UPND had no plan to “fix” any challenges Zambia was facing before they were elected, and now the problems have grown bigger.

But armed with the painful history of the privatisation exercise and the activities of some negotiators/consultants who were implicated, we can only hope and pray that these seemingly continuous delays are not coordinated to enable a handful of business friends and partners to carve up the two mines, which have been the engines of the Copperbelt.

That is why, as responsible citizens, we strongly feel that we have a duty to demand total transparency in these two transactions to ensure that we prevent a situation where the same individuals with a checkered past or those connected to them, gain the right to take over the running of these prime ventures for a song or a mere fraction of their true value.

A repeat of thoughtless agreements, such as happened with the mine in Luanshya and how Grant Thornton – a firm where Mr Hichilema was at the helm of the consulting wing – got involved and was rewarded millions of dollars for the mine whose sale remains one of the enduring sources of tragedies in Luanshya and beyond, must never be allowed to happen again.

We must remain vigilant and not allow the swindlers of our mines during the sham privatisation exercise to return as messiahs of the Copperbelt. The architects of the existing poverty and squalor on the Copperbelt must not be given another opportunity to hoodwink our people into thinking that they have a solution to the issues surrounding Mopani/KCM. Let us not allow them to use public office for private gain.

Further, it is now inescapable for Bally to now explain whether he meant to “fix” the people of Zambia and not the problems they were facing, because clearly his delay in fixing the economy is fixing the poor people of Zambia. And the delay to “fix” the mines is indeed fixing the people of the Copperbelt. Its like the people of the Copperbelt are being punished for trusting Mr Hichilema and his campaign promises, which they have later learnt were built on total deception, lies and manipulation.

What is even worse, is Mr Hichilema’s lack of a sense of urgency in dealing with the prevailing desperate situation on the Copperbelt. He is taking his time as if he is not dealing with fellow citizens, his voters. But what more can one expect from an insensitive, greedy and plundering leadership? Our people must know that this leadership is about self-interest and the illicit amassing of wealth – they want to the first Zambian billionaires!

The suffering masses are not and will never be a priority. But we urge our people to remain resilient as we defend and protect our mineral resources and national wealth. And for Mr Hichilema and his league, to you we say, you have no justifiable reason to prolong the resolution of issues at Mopani/KCM. Look beyond your interests and rescue the masses. They have suffered enough. Have a heart; you don’t treat your fellow citizens this way.

As Lenin aptly put it, “Untimely inaction is worse than untimely action”.

Fred M’membe
President of the Socialist Party

Article by Socialist Party Zambia
The Socialist Party is a political formation whose primary mandate is to promote and entrench socialist values in the Zambian society. Anchored on the principles of Justice, Equity and Peace (JEP), the Socialist Party shall transform the Zambian society from capitalism to socialism, building socialism in three key sectors: Education, Agriculture and Health.

Leave a comment