Konkola Copper Mines (KCM), which is one of Zambia and possibly Africa’s biggest mining giants, maybe be put on Care and Maintenance due to serious liquidity problems, highly placed sources from with the PF government have disclosed.
The move if effected will result in massive direct job loses and greatly affect the suppliers to the mining giant.
Sources have disclosed that part of the problem is that KCM has not been paid their VAT refunds from the PF government in millions of US dollars yet the company is also owing millions of US dollars to Zambian entities such as ZESCO and local and international suppliers.
In the recent secret and highly confidential meetings with KCM officials and PF government officials, an idea was proposed for a debt swap between government entities such as ZESCO and ZRA with KCM’s debt to ZESCO but it could not work out.
“The idea was that ZESCO, a government entity, writes off part of KCM’s debt and in exchange KCM stops demanding for payments from ZRA in VAT refunds then the Zambian government takes over the liabilities. But the problem is that ZESCO is also in serious financial problems and depends on producing books of balance sheets that include KCM debts to borrow more money from local and international banks for its operations. Further ZESCO is also financially stressed as the borrowed Eurobond money have matured and repayments are required to start without fail,” sources close to the talks have revealed.
Faced with this dare situation, the PF government has now targeted other sectors such as Zambian citizens that own houses and properties and milk them even more.
Further, the PF government quickly targeted the wildlife sector where they hope to start killing Lions, Leopards, and other big cuts as a measure to raise some revenue or government operations will grind to a halt.
“Government has no money to pay mining houses their VAT refunds. And the PF government is already owing a lot of money to the road and other construction sectors such that some contracts may soon attract court litigation. A number of government ministries and department, including the education and health sectors have not been funded for a long time now. So now it’s a triangle of who owes who plus the banking sectors are also heavily stressed as government has basically borrowed all the money without repayment,” sources have reaveled.