LUSAKA, May 23 (Xinhua) -- Foreign mining firms operating in Zambia said on Thursday that the legal action taken by the government to take over Konkola Copper Mines (KCM), a unit of India's Vedanta Resources Ltd, risks typecasting all investors and diverting attention from the issues hurting the industry.
The government, through the Zambia Consolidated Copper Mines Investment Holdings, has placed KCM under receivership and appointed a liquidator due to alleged breach of contractual obligations by the Indian miner.
While acknowledging that the action the government may have taken is the right legal process, the Chamber of Mines said sentiments coming from sections of society were not assuring to investors in the sector.
"We must strive for less emotive investor narrative. Zambia needs investment. The government needs bond holders. Businesses great and small need capital, and Zambia's mines need continuous investment to remain productive," Goodwell Mateyo, president of the mining association, said in a statement. "There is a shortage of capital in Zambia, so we must look elsewhere for this investment."
The investors need to see clear and consistent guidance from government on its intentions and actions it proposes to take, he said, adding that the business environment in Zambia needs to attract responsible investors.
"Ultimately, the chamber is concerned about the future of the entire mining industry, than that of its individual members," Mateyo said. "The KCM story has created a social media frenzy, but it is distracting us from the real issues at play here, which is the increasingly unbearable tax burden in a country where most mines are already regarded to be high-cost operations."
