The Johannesburg High Court in South African has ordered Zambia to halt plans to sell Konkola Copper Mines controlled by the Anil Agarwal owned Vedanta Resources Ltd, pending arbitration in a dispute which has rattled investors in Africa’s second-largest copper producer.
Delivering his ruling, Judge Leicester Adams stated that the Zambian government must immediately cease efforts aimed at winding up Vedanta Resources Ltd’s Konkola Copper Mines unit.
He also ruled that the Zambian government had breached its shareholder obligations and continues to do so.
Earlier, Vedanta had approached the South African court due to an agreement which had selected Johannesburg as the seat of arbitration.
Vedanta had lodged the application against Zambia’s ZCCM-IH Holdings Plc, which owns a 20% stake in Konkola, as it tries to stop the sale and planned disposals of its copper mines in the country.
In May, Zambia’s government had begun liquidation proceedings against Konkola after accusing Vedanta of lying about its expansion plans and paying very little tax.
However, the company claimed that it is a “loyal investor” which spent more than USD 3 billion in the country since 2004.
The Johannesburg High Court ruling is being seen as a blow to the Zambian government, which had stated that it plans to sell Konkola to another foreign investor.