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Campaigning in Zambia forces review of Vedanta owned copper mine

Wednesday, July 9, 2014 - 11:22

Zambia’s economy is largely dependent on copper, and as the world’s fourth largest producer, the mining sector accounts for over 80 per cent of the country’s foreign exchange earnings. Sadly, the mining sector only contributes about 4 per cent to GDP, in a country that has extremely high levels of poverty and in dire need to resources.

Over the last few years, many Zambians have started questioning the benefits of mining for the ordinary citizens especially as the number of big multinational companies continues to grow and new mines being developed.

The launch of the Tax Power campaign by ActionAid in Zambia has further ignited interest and debate on what many citizens now describe as ‘looting’ of our natural resources rather than investment.

It is then not surprising that there was public outrage when a Youtube video showing the boss of London-based mining Vedanta giant Anil Agarwal, owner of Konkola Copper Mines, bragging about buying the company from the Zambian government for a song and making huge profits from it when it has been reporting losses in Zambia.

He said, “We took over the company. It's been 9 years, and since then, every year it is giving us a minimum of US$500 million plus US$1 billion every year… it has been continuously giving back.”

Even more frustrating was the fact that government was silent about the video with only some unofficial comments.

ActionAid decided to organise a media stunt at which it gave the Government a seven day ultimatum to clarify the claims by the KCM CEO. The media stunt, being the first of its kind by an NGO in Zambia, drew massive publicity from media houses, including the public media that often blacks out coverage of NGOs.

Interestingly, within this period, the Government called its own press briefing to which ActionAid Zambia received a ‘personal’ invitation – something rather uncommon with the current government! During the interaction with the Minister of Mines, Energy and Water, ActionAid was acknowledged several times and even called upon to work with the Government to support development of effective mining policy. At this briefing, the minister insisted that the Government had already undertaken a comprehensive audit of KCM and so another audit was not necessary as the problems were known.

In a bid to put more pressure on government to undertake a comprehensive forensic audit of KCM, ActionAid Zambia organised a protest march to KCM head office in the Capital City, Lusaka. This was a huge achievement for AA Zambia in a country where the Public Order Act is harshly applied; ActionAid Zambia pushed to get the relevant permit to hold the protest and to deliver a petition to KCM demanding disclosure of their transactions.

Two days after the protest, the revenue authority announced that it had ordered a forensic audit of KCM.

And just three days later, KCM responded to ActionAid Zambia’s petition demands and a meeting with the KCM (Zambia) CEO was held where KCM committed to be more transparent in their transactions and to engage with the communities that ActionAid works with in Chingola town where the KCM mine is located.

The responses both from the Government and the company were pleasantly surprising, but are a clear testimony of what we can achieve with our #TaxPower campaign!