The Zambian Mining Industry ……Beware of those Wolves in Sheep’s Clothing

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By An Observer.

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The resurgence of the Zambian economy has seen a plethora of all manner and sorts of foreign investors, businessmen, some genuine, some wannabes and some just outright world renounced crooks masquerading as industrialists waiting for a chance for a sip from the copper chalice.

The government is therefore implored to be weary and place water -tight due diligence and vetting processes which will weed out those who wish to plunder, make a quick buck and flee leaving the ordinary citizens who are the true owners of the wealth wallowing in abject poverty and helplessness.

Copper mining is one such sector that has the potential to be inundated by unscrupulous people. The story is all so familiar.

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As the Zambian economy rebounds, painfully but surely stirring back to life, thanks to a radical shift in economic policies and brute determination to overhaul an unsustainable foreign debt portfolio, this southern African nation has become irrisistably attractive to foreign donor investment.

This has caused an immediate ripple effect as donor confidence is soaring at high levels not seen in a decade, the rate of inflation has drastically been reduced to single digit figures while it’s currency the Kwacha has in the past few weeks seen a bullish resurgence against the dollar and other world convertable currencies.

Barely one year in office since the change in political leadership which ushered in President Hakainde Hichilema and his UPND government in the August 12, 2021 polls, the change has caused this southern African nation post positive seismic shifts in its economic trajectory.

In pole position on it’s to do list which government envisages is the cornerstone of its revival plan is the mining sector.

Zambia is ranked the 7th in the world and the second largest copper producing and exporting nation in Africa, second only to its neighbour the Democratic Republic of the Congo (DRC)

The country produced 800,696 tonnes of copper in 2021, 837,996 in 2020 and 776,430 tonnes in 2019.

Once a thriving industry which in the heyday of the early sixties and seventies sustained 70 percent of the nation’s economy, the copper mines and its Copperbelt flourished, making it one of the fastest growing economies in the world.

This, not until the early 1980s when a sudden slump in world copper prices coupled with gross mismanagement of the mines sent the economy on a downward spiral.

Subsequent governments have attempted to salvage the sector through the privatisation and sell of the mines over time and yet not much has been achieved. Not much until now.

The new government in its quest to inject new life into the mines whose massive profits have unfortunately, largely benefited only the foreign mine owners through unabated, unfettered capital flight, has now embarked on more stringent pro-poor policies that will see ordinary Zambians have direct benefit of this copper wealth.

One such intervention is the decision to directly involve not so large corporates to participate in the extraction business of minerals.

Of interest is the Mufulira and Nkana slug dumps which have been allocated to small scale operators and medium range institutions to tender.

This multi million dollar enterprise has naturally invited interested investors to bid.

But public concern is drawn to some of those ‘wolves in sheep’s clothing who have in one way or another webbed themselves too close to public resources for the comfort of many.

The Zambian government is urged to take a keen interest in some of the past dealings of these firms and make informed decisions to allow or not allow them participate in this economic revival.

A critical look at some of the documented past dealings of some ‘investors’ will make you cringe to imagine they can even be considered to do business with Zambia.

In 2021 Mopani Copper Mines (MCM) advertised a tender for a project

to install state of the art equipment to process Cobalt salt and Cu concentrate on slag dump site 1 and 2 in Mufulira.

Five companies participated namely, Blue Star Resources, Ramoji, Jubilee metals/Sable, Glencore.

Ramoji Resources

This is an Indian/Chinese company situated along the Mufulira/Sabina road. They reportedly have a stock of 1 million tons of slag which they procured from the Kitwe black maintained which they process and sell to the Chambeshi Copper Smelter.

Jubilee Metals.

A South African company which does reclamation old and abandoned slopes for Mopani. They currently have operations in North Western, Copperbelt, and Central provinces.

Glencore

This is the huge mining company which once owned Mopani. It withdrew its tender for the Mufulira slag.

Bluestar

Perhaps the most interesting of the mining companies which bid for the tender is Blue Star, a company which is liked to London based Ugandan businessman Emmanuel Katto.

His business reputation spans several decades with a resume once tainted with shady dealings.

Emmanuel Katto popularly goes by the name ‘Emka’ amongst his peers.

The name Emmanuel Katto’s first came to international prominence in 2005 when he was arrested by the Ugandan government for selling ‘Junk’ helicopters and military hardware. It is reported that he offered corrupt Ugandan officials US$ 800 ,000 to secure a deal for one of his companies to supply four helicopters.

It is alleged that Katto through one of his offshore companies Consolidated Sales Corporation, defrauded the USA government US $6,454,275 by supplying sub- standard helicopters which were non functional.

Allegedly, he bribed his way out of prosecution and the case was dismissed, although non of the helicopters ever left the ground.

His next project was an attempt to sign a multi million IPP project with the Ghanian government using the name Trans-Danubia Power Limited.

Just as he did in Uganda Katto allegedly colluded with corrupt officials in Ghana and Nigeria to provide electric power to urban and rural areas.

It was in the Nigerian rich oil state of Delta where he met a convicted businessman who had served 13 years in a London jail for money laundering. It is believed the named former convict was influential in awarding Katto contracts.

Emmanuel Katto was forced to flee West Africa where warrants of arrest had been issued.

With all these red flags about some of these investors, it is incumbent on the Zambian government to tread cautiously and vett any such companies that are shrouded in controversy.

The Zambian people deserve companies with impeccable track records which can contribute to the development of the mining sector.

Are we certain that we can achieve such with some shady investors whose reputations smack of trouble right from the begining?