A Zambian court has stayed hearing by a state-appointed provisional liquidator for splitting up Vedanta Resources' Konkola Copper Mines (KCM) unit and selling the assets.
The stay on KCM liquidation proceedings has been granted to allow Vedanta and the Zambian government to proceed to arbitration, Vedanta said in a filing to the Singapore Stock Exchange.
Metals and mining firm Vedanta Resources held a 79.4% stake in KCM while the Zambian government through its state mining investment firm ZCCM-IH holds the remaining 20.6%.
ADVERTISEMENT
Vedanta has been locked in a dispute with the Zambian government since May 2019, when the Zambian government handed control of the mine to a liquidator.
Legal arguments over the case have been heard in both Zambia and South Africa.
"Zambian Court of Appeal has granted a stay in respect of any hearing of the merits of the Winding Up Petition and Amended Petition in respect of Konkola Copper Mines plc pending a decision in respect of the arbitration proceedings between Vedanta and ZCCM Investments Holdings plc (ZCCM)," Vedanta said.
ADVERTISEMENT
Vedanta and Zambia are arbitrating in London over the KCM dispute, which began when the government accused Vedanta of failing to honour licence conditions, including promised investment.
Vedanta has previously denied that KCM broke the terms of its licence.
"The arbitral tribunal has recently granted a partial final Award in which it has ruled that ZCCM has breached, and is in continuing breach of, the dispute resolution provisions in the shareholders' agreement between amongst others ZCCM, Vedanta and the Government of Zambia," the company said.
To cure this breach ZCCM should immediately withdraw the petition and amended Petition and the provisional liquidator should be discharged, it added.
Provisional Liquidator Milingo Lungu had in December announced a restructuring plan involving splitting KCM into two subsidiary companies — KCM SmelterCo Limited and Konkola Mineral Resources Limited.