Zambia refuses to let Vedanta sack copper mine staff
Resources giant Vedanta, which has operations across the world, is facing several hurdles. Its operations in Africa are under a bit of an overhang, and a proposed share buyback in India has been criticised by a global rating agency Standard & Poor’s.india Updated: Nov 30, 2013 00:48 IST
Resources giant Vedanta, which has operations across the world, is facing several hurdles. Its operations in Africa are under a bit of an overhang, and a proposed share buyback in India has been criticised by a global rating agency Standard & Poor’s.
First, at their Konkola Copper Mines (KCM) in Zambia, Vedanta, a London- headquartered group, a planned retrenchment was negated mainly due to objections by the Zambian government. The $14 billion (about Rs. 87,794 crore) group (2012) has interests in oil and gas, iron ore, copper, aluminum power and zinc.
Vedanta had announced plans earlier in November to retrench over 1,500 employees by March 2014 as mechanisation at its KCM mines is complete and the company needs to optimise costs.
However, the announcement led to a bitter row with the Zambian government, which reportedly decided to revoke the work permit of a senior Vedanta executive. An email sent to the Zambian embassy to comment on the issue had not been replied to as of Friday night.
“We have 17,000-18,000 people and we need to rationalise them. We are engaged with the government on how we can address the issue of reducing some of the people in a couple of years ...
“They (the mines) is completely mechanised...,” Vedanta’s chairman Anil Agarwal said in a conference call while announcing the half-yearly results, according to reports.
Noting that Vedanta has invested about $2.8 billion (about Rs. 17,558.8 crore) in Zambia, he added that “We are not saying we will lay off workers tomorrow. It is a plan that will unfold over the next couple of years. We have to work together.”
“They (the local government) have to understand that this (KCM) is a national asset and we have to run it efficiently. That’s how they will get cash, that’s how they will get revenues,” he said.
“It’s a political issue and we will have to wait and see how the situation develops,” said Vikram Dhawan, director of wealth management, Equentis Capital.