South African court orders Zambia to halt liquidation of Vedanta unit assets
JOHANNESBURG – South Africa's High Court on Tuesday granted Vedanta Resources an urgent interdict halting the liquidation of its Konkola Copper Mines (KCM) unit in Zambia until a final decision is made through arbitration.
Vedanta has been locked in a dispute with the Zambian government since May when it appointed a liquidator to run KCM, which is 20% owned by Zambia's State mining company ZCCM and the rest by Vedanta. Zambia accused KCM of breaching the terms of its licence.
The dispute in Africa's second-largest copper producer has intensified concerns among international miners about resource nationalism in Africa.
Mumbai-listed Vedanta denies that KCM has broken the terms of its licence and says it will defend its assets in the southern African country.
South African High Court Judge Leicester Adams said on Tuesday in a ruling seen as a big win for Vedanta that wind-up proceedings must be immediately withdrawn until a final decision is made following arbitration.
"Pending the final determination of the arbitration, the first respondent is interdicted and restrained from taking any further steps in the furtherance and prosecution of the winding up proceedings," he said.
Vedanta welcomed the decision and said it was committed to resolving the dispute. The legal counsel for ZCCM declined to comment.
It was not immediately clear whether the ruling would be binding in Zambia.
Vedanta had sought the urgent order in South Africa to prevent KCM from being wound up, arguing that the dispute should be subject to arbitration, which cannot happen if the Zambian government is pursuing a new investor.
Zambia's mines minister said last week that it expects bids for the KCM business to be submitted within weeks by nine companies from Russia, Turkey, Australia, Canada and China.
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