KCM Chairman sees opportunities from mining for Zambia
February 13, 2015
Cape Town, 12 February, 2014 – Konkola Copper Mines (KCM) Chairman Tom Albanese has called for redoubling of efforts to expand on opportunities from the Zambian mining value chain.
Speaking at the Mining Indaba conference in South Africa, Mr Albanese said he was encouraged by the Zambian government’s focus on the potential of the mining industry value chain. He urged industry players to help create employment through small and medium sized enterprises. KCM has recently appointed a Vice President for Local Economic Development to drive the process.
Referring to the much sought growth of the industry, Mr Albanese said, “Arriving at the right solution requires broad stakeholder agreement, a predictable operating environment and a commitment to strong and stable governance.”
Mr Albanese also told the delegates that KCM is facing several challenges. Falling ore grades and high strip ratios at KCM have increased production costs. In addition, the new Mineral Royalty Tax would add US$80 million to KCM costs.
Power prices have trebled at KCM in the last 10 years, while the issues around value added tax (VAT) refunds have effectively added 10 percent to costs. Finally, the rapid decline in copper prices since the start of the year has compounded the challenges.
Mr Albanese said, “It is now inevitable that there must be restructuring of KCM’s business in order to achieve breakeven cash flows, and to return to profitability.” He stressed, however, that Vedanta Resources remains positive over the future potential of KCM and is working closely with the Government of Zambia to seek win-win solutions to the challenges facing KCM.
Vedanta Resources has made a significant contribution to the Zambian economy since acquisition of KCM in 2004 by investing some US$3 billion. This had increased life of mine from 10 years to over 30 years.