arbitration / adr news
Mopani mine boss detained at airport 16 April 2020
The PF government last evening detained Mopani Copper Mine CEO as he tried to leave the country. Glencore said Nathan Bullock, the chief executive of Mopani Copper Mines, had been held at Lusaka airport in connection with its decision to shutter the business for three months. “Nathan has subsequently been released,” Glencore said in a statement, adding that Mr Bullock had been on his way home to spend time with his family in Australia when he was detained. Mr Bullock’s detention came hours after Zambia threatened to strip Glencore of its licence to operate in the country and sharply escalates the increasingly bitter dispute over Mopani. Last week Glencore announced the closure of lossmaking Mopani for three months because of low commodity prices and the coronavirus pandemic. That move that drew a furious response from Zambia’s mining minister Richard Musukwa, who slammed it as unjustified and illegal. Zambia has a large debt burden to service and earns most of its foreign exchange from copper exports. In a letter dated April 14 to Mr Bullock, Zambia’s Mining Licensing Committee said it planned to revoke the company’s operating permits for the Nkana and Mufulira mines in seven days unless it could show why they should not be cancelled. Glencore owns 73.1 per cent of Mopani. The other shareholders are First Quantum Minerals with a 16.9 per cent stake and government-controlled Zambia Consolidated Copper Mines Investment Holdings, with 10 per cent. “The Mining Licensing Committee is in receipt of an investigation report by the Director of Mines which has established that you have proceeded to place the Nkana and Mufulira mines on care and maintenance without giving sufficient notice as required by law,” said the letter, seen by the Financial Times. Glencore said it was committed to engaging in a constructive dialogue with the Zambian authorities. The Swiss-based company has invested more than $4bn in the country since 2000. Zambia’s threat to revoke Glencore’s mining licence comes as the government of President Edgar Lungu struggles to service its debt load. Former ministers and officials on Wednesday urged the country to seek a loan from the IMF. The country has $11bn of external debt. Mr Lungu has previously taken a tough line against international mining companies. Last year the government placed Konkola Copper Mines into liquidation, accusing its owner Vedanta Resources of breaching the terms of its mining licence. Vedanta has denied the charges and taken its case to international arbitration, a route Glencore may also be forced to take if the dispute escalates. “This is an ill-conceived move at a critical time for Zambia,” said Peter Leon, partner at law firm Herbert Smith Freehills. Nick Branson, senior Africa analyst at Verisk Maplecroft, said Zambia’s ultimatum to Glencore was the latest in a long line of “populist threats” from a heavily indebted government fearful of lower copper earnings at a time when it was battling to avoid sovereign default. Source: Zambian Watchdog |
