The law on mining in Zambia does not permit a company that is bankrupt to hold a mining right, hence Vedanta has to prove its financial position before it can come back to run Konkola Copper Mine, it’s been established.
Anil Argawal, the majority shareholder in Vedanta, will have to ensure all creditors are paid to prove they are solvent and capable of running KCM again before a mining right can be granted to them, according to the law.
According to sources, Vedanta is in breach of the law and other court precedents on Liquidation and Bankruptcy proceedings.
Section 14 of the Mines and Minerals Act disqualifies the holding of a mining license by a holder who is bankrupt.
“In order for Anil Argawal/ Vendata to prove that they are solvent, let them pay the amount owed to creditors $1.2 billion in court. This will prove their solvency otherwise he will be in breach of the act. This I am talking from experience,” said the source.
“At some point, ourselves had to pay creditors amount in court and enter consent to discontinue proceedings before we could proceed to hold a mining right. There’s that precedence in court.”
Further, according to the law, a mining right or non-mining right shall not be granted to any person except in accordance with the provisions of the Act.
“A mining right or non-mining right shall not be granted to nor held by a company which (a) is in liquidation, other than liquidation which forms part of a scheme for the reconstruction of the company or for its amalgamation with another company; (b) is not incorporated under the Companies Act; (c) has not established a registered office in Zambia,” part of the Act reads.
Source: Mybrytnewsroom.com/Kwabenba Nyarko Abronoma
