Vedanta Resources Come Under Scrutiny of Zambian Tax Authority
Controversial comments made by the majority owner of a Zambian copper mine about its profitability have led to a formal investigation of its tax affairs by the government.
Mumbai-based Anil Agarwal, the majority owner of Vendanta Resources, which owns the Konkola Copper Mines, in Zambia, was recently caught out on a video boasting that Vedanta had made between $500 million and $1 billion every year for nearly a decade from the Zambian interests.
His comments have kicked up a storm of protest in Zambia after the damning video was posted on YouTube (see video below) and his statement appeared to be at odds with what has previously been reported about its financials.
Now the Zambian Revenue Authority has announced it is to undertake a forensic audit of tax affairs of the mining company’s Zambian operations.
Vedanta has refuted the Agarwal’s comments saying they had been taken out of context and also says it welcomes scrutiny by the tax auditors and has always been compliant with the country’s tax laws.
The Zambian operations comprise mines at Konkola, Nchanga and Nampundwe. At Konkola, there is the flagship Konkola Deep Mining Project (KDMP) which provides access to one of the largest high-grade ore-bodies in the world, the Konkola underground mine, with a grade of 3.55 percent and around 24+ years of mine life.
It also owns a tailings leach plant and smelter at Nchanga and a refinery at Nkana. The company’s website reports that these operations delivered 160,000 tonnes of integrated copper production in the financial year 2013 and 216,000 tonnes of total finished copper production.