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Vedanta Resources has offered to step up investment in Zambia’s Konkola Copper Mines (KCM) and implement several social responsibility programmes if it resumes control of the local firm, a company letter sent to the government showed.

Zambia’s previous government put KCM into the hands of liquidator Milingo Lungu in May 2019, triggering an ongoing legal dispute with Vedanta Resources, KCM’s parent company.

The government accused Vedanta of failing to honour licence conditions, including promised investment. Vedanta has repeatedly denied KCM broke the terms of its licence.

In a leaked letter addressed to Mines Minister Paul Kabuswe, the authenticity of which was confirmed by a local company executive, Vedanta chief executive Sunil Duggal said the company is committed to investing an additional $1 billion towards capital mine development and other infrastructure to boost KCM’s output.

“The above commitments by Vedanta will be included in a Framework Agreement to be entered into between KCM, Vedanta, ZCCM-IH and (the government),” the letter dated May 5 reads. 

ZCCM-IH is the government’s mining investment company.

Duggal said the protracted dispute between Vedanta and the government was not benefiting any of KCM’s stakeholders and it was necessary to quickly reach a mutually beneficial solution.

Kabuswe and Presidential spokesman Anthony Bwalya could not immediately be contacted for comment. 

Vedanta was committed to paying KCM suppliers, specifically small suppliers owed up to $220 million at the point the Provisional Liquidator was appointed, Duggal said in the letter.

The company also committed to increase salaries by 20% across the board.

“The agreement will be auditable on a bi-annual basis by an independent firm to verify all parties’ compliance with their commitments under the Framework Agreement,” the letter, which is copied to President Hakainde Hichilema, reads.

Vedanta Zambia Corporate Communications Director Masuzyo Ndhlovu said the letter was sent in reaction to comments by the mines minister regarding the conditions under which KCM could be returned to Vedanta.

“Our group CEO gave an outline of the conditions for Vedanta’s return to KCM Plc. The content is authentic and was addressed to the minister,” Ndhlovu told Reuters.

(By Chris Mfula; Editing by Kirsten Donovan)