Message Ven 8 Sep 2017 17:59


A settlement in the dispute between mining giant First Quantum Minerals (FQM) and Zambia Consolidated Copper Mines — Investment Holdings (ZCCM-IH) looks as distant as ever. President Edgar Lungu ordered the settlement to be negotiated after dropping a court case.

Sources close to ZCCM-IH told Africa Confidential that FQM has not yet produced an account of how the funds it allegedly borrowed from Kansanshi Mine were used. It has only produced ‘explanatory notes’ which the Zambian government has rejected. Many believed the dropped of the court case signified a soft outcome for FQM, but opinions are changing.

FQM is accused to using revenues from its Zambian operations to develop mines elsewhere in the world without paying the proper rate for the finance. Zambia’s original claim was for US$2.3 billion (AC Vol 58 No 11).

FQM’s director of government affairs John Gladstone promised the Zambian negotiating team ‘the paperwork’ that would show how the funds paid for a smelter that was wholly owned by Kansanshi would be produced.

Since then, Gladstone has been sidelined in favour of FQM Chief Executive Officer Phillip Pascall. ‘We were told that Gladstone had over-committed or mis-committed the firm,’ says a Ministry of Finance source.

Pascall has paid two ‘courtesy calls’ on Lungu, a situation viewed with suspicion by the government’s negotiators.

But they were encouraged by Lungu’s decision to reject FQM’s explanatory notes.

‘If the president agreed that those power point presentations were satisfactory, then we would know that FQM has struck a deal behind our backs, but to our relief, the document was rejected,’ an official told AC.