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Saturday, 17 May 2014

Zambia is Mocked by Vedanta

An interesting video has cast light on the ongoing argument about whether or not Vedanta Resources of the UK, the owner of Konkola Copper Mines, is externalising profits from Zambia. The video allegedly (it is in Hindi) shows Vedanta’s majority-owner, its chairman Anil Agarwal, mocking Zambia when addressing the Jain International Trade Organisation in Bangalore, India, in March 2014. The video was released by Foil Vedanta, whose name reveals its agenda. Here is an extract of the transcript:

Anil Agarwal: “Seven to eight years back, hunger remains to do big work. Pondering what to do... how can we let life go in vain? I saw it in the paper FT [Financial Times]; there was largest copper mine in Africa. That copper mine was up for sale. That government was privatising it. I got quite interested in it. I have a friend in McKinsey – [MD in India] Ranjit Pandit. I went to him, asked him to make papers.

‘Make the papers beautiful, professional’. Papers were prepared. We kept it at $400 million. In pocket we do not have $4 million [but] bid for $400 million! Take chance in life definitely! All people sitting there: Take chance! If you won’t take chance, nothing will happen [clapping and whistling from the audience].

“Why we are different – different because we take chances. I told you we have to take chance. Then we said ‘$25 million we will give you cash, and $375 million we have to invest in making the machines running’. We forgot the matter, and suddenly, in about a month or so, we received calls. ‘This company is yours’. ‘Really?’ I took one of our engineers and went to Johannesburg and further changing flight there to Lusaka. When we arrived there, we were surprised to receive VIP treatment there, red carpet, entire government machinery has arrived at airport to receive us.

Surprised seeing such arrangement, we asked someone. ‘It’s all for you sir’. ‘How many people you have in the delegation team?’

“I asked ‘What delegation? We are the delegation only’. We were taken to the President. ‘Your Excellency, we are 30 people in our delegation, but they missed the flight at Johannesburg [audience laughs]. Can you wait till tomorrow? They all will come’. [Imitating President Mwanawasa] ‘No no no! The parliament is tomorrow, we have to decide today. Key is ready. Are you ready?’‘I am ready, I am always ready. I will handle it’ [more laughing]

“We took over the company. It’s been 9 years, and since then, every year it is giving us a minimum of $500 million plus $1 billion every year; it has been continuously giving back. It’s a matter of taking a chance.”

Foil Vedanta claims KCM made a profit of $362 million in 2013, but Vedanta maintains that it is making very little profit at KCM.

[Source: Zambia Weekly]

You can leave your comments below or on the Facebook page discussing the same story.

Chola Mukanga
Economist | Consultant
Copyright © Zambian Economist 2014


  1. It's so disheartening to read Agarwal's utterances. What's even sickening is that our Zambian government isn't eager to tax such criminals worse still they are given tax rebates at the expense of our poor nation.

  2. I am running a thread on the issue right here.

    You have wonder why the PF is keeping 100 kinds of quiet. Have they been paid off?

    If they have, if they cannot act on corruption because they have been compromised, there should be resignations.

    Take chance in life definitely! All people sitting there: Take chance! If you won’t take chance, nothing will happen ...

    It is time for the PF to take chance, and renationalize the mines, or heavily tax them with a Windfall Tax at the point of production.

    The saddest thing is that we all have relatives, dying in hospitals because there is no money for effective treatment, early diagnosis or medicine.

    Just one more cost of allowing the likes of KCM and Anil Agarwal to walk away with half a billion dollars a year, after only putting up $25 million. This is and has been the cost of 'privatisation' everywhere on the planet.

  3. We ( Zambians at Home/ including in diaspora) are all to blame .... we have failed to enact any legislative reform that curbs excessive Presidential discretion consequently any abuse we suffer from foreigners who so easily buyoff or deceive our President; stems from the failure to curb excessive Presidential power in the Zambian constitution.
    All this tax evasive, fraud, undeclared exports, & externalized profits can be fixed by legislation and effective enforcement of laws.. How long before Zambians realize it.. God knows but I sure hope it happens before our resources run out.

    1. We ( Zambians at Home/ including in diaspora) are all to blame ....

      I completely disagree. The same a with the Development Agreements.

      When the government treats them as if they are classified, how can you blame anyone outside the government? How can you blame the press for not reporting on them.

      And the government is only going along with the demands made by the IMF and World Bank. Which is the real reason they are not responding to the will of the people.

      And the IMF/World Bank demands are the same demands they make in every country in the world, with the same disastrous results.

      So to peculiarize this to Zambians is a big mistake.

      What happened with KCM is the predictable result of privatisation. It is happening in Russia, Ukraine, Greece, Ireland, everywhere.

      You want to know who is to blame - it's the World Bank/IMF, and the banks who own them.

      Now if you go against them, you get treated the way Zimbabwe was treated - media villification, lines of credit are suspended (which caused the collapse of the Zimbabwe Dollar vs the US Dollar in the year 2002, the year the Zimbabwe Democracy and Economic Recovery Act of 2001 came into effect - economic sanctions in 2002, not land reform 3 years earlier).

      The key is to act in concert - SADC, AU, even other international organisations should ensure that there is no retalliation against countries because of their domestic economic policies. That's the essence of national sovereignty.

    2. BAMBO MrK-

      On a macro level I agree with you but when I comes to find the root cause... I insist that if this mwenye guy had presented his offer to the Zambian people including former ZCCM miners who know the value of the mine and mineral deposits at stake ..what do you think would have been the response to a $25M offer?
      If the President had to announce to the Zambia people the full details of the Mwenye offer,,,, do you think the President would have been in such in a hurry to close the deal?
      Why I blame Zambians is ..some of us know and would have known the deal stuck to high heaven...but the Zambian President has the discretion to take the deal without letting us know.,,,
      So potentially the root cause is giving this one guy the President so much discretionary authority that even when some of us know he is wrong we can not stop him..
      that is why the I blame us -the Zambian... Fish for keeping our mouth so open any crap such that any crap gets in....

  4. The mines should be made to pay for all our new roads, that would be a great start and save us huge amounts of money.

  5. Its a shocking state of affairs...KCM are bringing Zambia's opinion of the Foreign Investor into disrepute. And at a time when Zambia needs that foreign investment more than ever. The only good thing (if there is a good thing) is that KCM have been named; they have been identified as a culprit. GRZ needs to apply the law (including tax law) across the spectrum - I have absolutely no doubt that this will make life very difficult for the 'bad guys' and allow the 'good guys' (and we all know who is who) to flourish. So let's stop tarring all the Foreign Investors with the same brush, let's flush-out the miscreants and let's get Zambian industry going. I fully suspect that there are a few other Foreign Investors in Zambia that would quite like to see KCM brought to book - they are, I hear, terrible at paying creditors and have accumulated enormous debt to other providers, and that is bad for business.


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