The firing of ZCCM boss Kasolo

The firing of ZCCM boss Kasolo

*Kasolo the Cat that Ran out of its 9 Lives*

The erstwhile Czar of ZCCM, Pius Kasolo, finally met his Waterloo when he was fired in January 31st 2019. Kasolo reigned supreme at ZCCM since his appointment by his late uncle and 5th Zambian President, Michael Sata in 2014. This was not a case of pure nepotism as Kasolo was actually qualified for this auspicious position as CEO of ZCCM-IH with a BSc in Geology, MSc in Mineral Evaluation and a PhD in Economic Geology.

After the death of President Sata, it was felt that Kasolo should continue in his role, especially after the unfortunate “I have no vision” statement by President Lungu. However, this marriage of convenience was not going to last. The appointing authority for CEO of ZCCM-IH is the board of ZCCM but they in turn are appointed by the republican president. As President Lungu grew more confident in his role as 6th President of Zambia, it became clear that Kasolo’s days were numbered. ZCCM-IH has been used to bankroll the ruling party and that is why its head is always a party sympathiser or weak enough to be coerced into clandestine activities. Kasolo being a PF funder and founder falls in the former category.

The uneasy relationship between the PF government and Kasolo was a dance of ‘Two by Two, Caterpillar by Two’ with Kasolo as the female dancer – leading the way but the male dancer, PF government, being close enough to instinctively know the next move of his partner. Kasolo was not allowed to make his own decisions without PF’s protective arms ushering him in the ‘right’ direction.

Despite this, Kasolo chose his battles and did challenge the powers that be and lived to tell the tale. In 2016, he sued First Quantum Minerals, FQM, for $1.4 billion over claims that the Canadian company borrowed $2.3 billion from its Zambian copper mining subsidiary Kansanshi Mining Plc without informing ZZCM-IH, a minority shareholder. ZCCM-IH simultaneously filed a Notice of Arbitration in London claiming the Vancouver-based company swindled it out of US$2.3 billion.

Furthermore, he spearheaded the case against Vedanta PLC, owners of KCM mine in Chingola, in the British courts for the non-payment of the copper price participation settlement agreement between KCM and ZCCM- IH. The PF government leaned on Kasolo to drop the cases but Kasolo defied them and won the KCM case and has appealed the ruling on the FQM case which it lost in April 2018. It would have looked strange, even for lawless PF, if the ZCCM boss would have been fired after securing US$139 million payout. Whether or not ZCCM loses the FQM case, Kasolo comes out smelling of roses because he has claimed the moral high ground in this fight.

Being an accomplished professional, Kasolo has been a constant thorn in the PF Government’s flesh. Their constant demands for short term loans to pay for the PF’s ad hoc activities irritated Kasolo who felt uneasy about the bad governance implications these presented. PF has too many people to keep happy and the money needs to come from somewhere. The IDC coffers are empty so ZCCM and other state-owned enterprises have been used as a PF personal bank account for this purpose.

What could be the real reason behind the firing of Kasolo? He was axed 4 days after the ZCCM-IH press conference stating that the new mine tax regime will negatively affect the company’s earning. This announcement came the week after ZCCM-IH posted a decrease in profit from K848 million in 2017 to only K47 million in 2018. This is a 95 percent decline in operating profit resulting from the decrease in copper price participation income from K719 million in 2017 to K360 million in 2018. Kasolo was only stating the obvious, but speaking out against the government’s new tax regime was the straw that broke his back.

The government is broke and there are no new revenue streams in the pipeline. Most of the money is going towards debt servicing and the IMF is not interested in giving Zambia a bailout package citing Zambia’s ‘fiscal indiscipline’ – in layman’s terms: Zambia is spending more than it earns.

From now until the time leading up to the 2021 General election, PF will be looking for short term fixes to cover this self-inflicted economic quagmire. This is where ZCCM-IH becomes relevant. Campaign money will need to be found to browbeat a mainly illiterate population into thinking that badly built roads and poorly-stocked but brand new hospitals are examples of good infrastructure development by PF. So expect to see a stooge CEO installed at ZCCM-IH to pander to PF’s unreasonable demands.

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