KONKOLA Copper Mines (KCM) won an interim order from the High Court in Zambia preventing power supplier, Copperbelt Energy Corporation (CEC) from cutting supply of electricity to the company.
KCM, a subsidiary of Vedanta Resources, owes CEC at least $132m in unpaid bills but has been placed in liquidation by the Zambian authorities.
KCM disputes the payment that CEC is demanding, and says power restrictions would cause irreparable damage to its facilities, according to an affidavit from the mining company.
At the time of liquidation, KCM owed $47m in unpaid bills, said Bloomberg Quint citing the affidavit, signed by Mbobe Nyondo, KCM’s energy and risk manager. While KCM said it had paid $45m, CEC said it is still owed $132m.
The power provider then warned it would restrict supply, relying on a notice from a year ago that has since lapsed, according to Nyondo.
KCM’s liquidation, which was brought by Zambia’s ZCCM-IH, is currently the subject of court proceedings after Vedanta objected it had been undertaken ex-parte; that is, without Vedanta ‘present’. In terms of KCM’s shareholder agreement, Vedanta and ZCCM-IH ought first to have discussed differences of opinion in terms of a shareholder dispute clause.
ZCCM-IH contends that Vedanta has failed to deliver on investment promises including capital expansions of KCM’s assets and the payment of dividends. Vedanta argues that it is owed VAT refunds whilst the fiscal and regulatory regime in Zambia has been unhelpful to KCM’s business case.
