Vedanta Resources Ltd. is learning the hard way that when it comes to Zambia’s copper-mining industry, history tends to repeat itself.
Fifty years ago, Zambia’s first post-independence leader Kenneth Kaunda nationalized mines owned by Anglo American Plc and Roan Selection Trust to rally his political supporters.
Now populist President Edgar Lungu is taking legal steps to take over the operations of Vedanta’s Konkola Copper Mines, alleging the unit lied about expansion plans and cheated on taxes.
With Zambia mired in a debt crisis that’s made its dollar bonds and currency among the worst performers in the world this year, Lungu’s attack on Vedanta is a useful distraction from the nation’s economic woes. While copper prices are well below historical highs, the metal has more than tripled since 2000.
“Resource nationalism tends to peak exceptionally when there is a perception that commodity prices are high and countries feel they are not getting the benefit,” said Claude Baissac, the head of Johannesburg-based risk consultancy Eunomix Business & Economics Ltd. “President Lungu is undermining the gains of the 2000s.”
For the rest of this article: https://www.bloomberg.com/news/articles/2019-05-23/a-copper-mining-lesson-from-zambia-history-repeats-itself