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Vedanta apologises after CEO’s work permit is revoked

Vedanta Resources plc (VED)’s Zambian unit, Konkola Copper Mines plc, has apologized to the president of Africa’s biggest copper producer, after the government revoked the work permit of its chief executive officer.

The Chingola-based company released a statement here saying it: “wishes to unreservedly apologize to the president of the republic of Zambia and the nation for the unfortunate remarks” published in the media, reports Bloomberg News.

Zambia cancelled the work permit of CEO Kishore Kumar after Konkola said it would dismiss 1,529 workers. President Michael Sata said government would cancel the company’s licence if it fired any workers, and labour minister Fackson Shamenda said Kumar told him the president’s remarks were “mere rhetoric,” the state-owned Daily Mail reported .

“He was being very arrogant,” minister of information and broadcasting Mwansa Kapeya said by mobile phone from Lusaka. Kumar, who started the job in August, won’t be allowed back into the country, Kapeya said.

The state-owned Times of Zambia newspaper reported last week that the company had fired 76 workers effective September 19, under the headline “KCM defies Sata.”

Konkola “fully respects” Sata’s directive not to fire any workers and the reports of dismissals were inaccurate, the company said in a statement published in the Lusaka-based newspaper today. Kumar flew out of the country on a scheduled business trip to South Africa on November 8, the company said.

The revocation of Kumar’s permit is a personal issue with an individual, and the government still “fully supports” Konkola, Mines, minister Christopher Yaluma said in an interview today in Lusaka. Earlier, he told reporters that government was putting together a task team to investigate the operational problems at the company.

NKC Independent Economists, a South Africa-based political and economic research company, cut Zambia’s political risk rating because of the actions against Konkola and said expansion plans in the country were “best mothballed” in the short term.

“We downgraded our rating because Zambia’s investment environment can no longer be trusted,” Gary van Staden, an analyst at the company, wrote in an e-mailed note. “The Sata regime cannot continue with this suicide plan, it either stops and some semblance of sanity returns, or the economy suffers significant damage.”

Source: Bloomberg News. For more information, click here.

Picture: KCM’s CEO Kishore Kumar, who has been deported from Zambia.

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