JCTR urges Government not to sale its stake in Kansanshi Mine

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The Jesuit Center for Theological Reflections (JCTR) has has become the latest entity to oppose the proposed sale of Government’s 20 percent shares in Kansanshi Mine to First Quantum Minerals, saying the move is at variance with the will of the majority.

The JCTR has also charged that First Quantum Minerals cannot be trusted to have the country’s best interests.

According to several media reports, Government is considering a US$700 million offer for its 20 percent stake in Kansanshi Mine from First Quantum Minerals (FQM) who own 80 percent of the Company’s shares.

While some sections of Government have refuted the report, the Minister of Finance Margaret Mwanakatwe is reported to be aware of the offer and has even added that there are other unsolicited offers. She said this on the side-lines of the recently held 10th African Mining Indaba in Pretoria, Cape Town.

But despite the attractiveness of getting additional liquidity which the country desperately needs, JCTR urges Government to resist and hold on to the shares in the interest of the Country.

“This impending sale is wrong for various reasons,” reads a JCTR statement to Zambian Eye. “Firstly, it is at variance with the will of the majority Zambians considering views from many people who have commented on the issue. With the challenges that Government has been facing to effectively tax mining companies, it is apparent to everyone that Government need to enhance its role in the management and exploitation of natural resources through increased shareholding for the benefit of the citizens. The intended sale of Government stake thus is a departure from this realization. It is also a betrayal to the highly publicized PF pro-poor philosophy on which the party was voted into power as 100% private ownership of the Country’s strategic assets will not ensure this. It has failed to do so since privatization days. Private ownership has failed to raise sufficient tax revenues for the Government, it has failed to create sufficient jobs for the Zambian people and it has failed to respect the environment. We should not be fooled or made to believe it will do so now.”

JCTR says Zambia’s experience with privation under the IMF supported Structural Adjustment Programme is a proof that privation is not a panacea to the Country’s sustainable development path.

“The Country is still reeling from the effects of surrendering assets in the hands of private hands whose sole motive is profit. A company like FQM cannot be trusted to have the interest of Zambians that we should surrender the Country’s assets to them. They have been threatening to dismiss over 2,500 employees due to a tax increase dispute with Government. They have also disputed the US$7.9 billion tax bill issued by the Zambia Revenue Authority following an audit. It will therefore be an act of naivety on the part of Government to entrust the entire Kansanshi mining assets in the hands of FQM,” reads the statement.

JCTR has also taken issue with the US$700 million, saying it is well below the true value of the 20 percent shares.

“The valuation of the 20% shares at US$700 million for the Africa’s biggest Mining Company also raises a lot of concerns as they seem to be undervalued. For a Company that is reported to be valued at around US$7.9 billion, 20% shares should cost over twice the current offer price by FQM. Zambia has been on this road of selling its valuable assets for a song and should not repeat to tread the same road. The PF Government is on record admitting that the US$25 million that Vedanta Resources PLC paid for KCM was insufficient. It would therefore be hypocritical for Government to tread the same path of self-destruction that the Country has been recovering from since the privatization days. The PF Government is actually on record of wanting to set up a commission of inquiry into the privatization process of Government assets. Government should further note that the percentage stake it holds in the Mines has enabled the it speak on behalf of the employees each time the Mines have threatened them with dismissal. Losing this stake would deny the government this voice for the Mines would be considered as 100% private and with a higher latitude to deal with workers as it wishes. The workers in the Mines would be left defenceless and without a voice. This would go against the PF Government’s mantra of ‘Not leaving anyone behind’. These shares are held on behalf of the Zambian people who are facing the brunt of unemployment, inequality and poverty and therefore great care must be taken in handling this issue. Sustainable ways of benefiting from natural resources must be found and not short term solution.”

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