The Jesuit Center for Theological Reflections (JCTR) contends that despite the attractiveness of getting additional liquidity which the country desperately needs, Government should resist and hold on to the shares in First Quantum Minerals.
The Center also says the valuation of the 20% shares at US$700 million for the Africa’s biggest Mining Company also raises a lot of concerns as they seem to be undervalued.
According to several media reports, the Government of the Republic of Zambia intends to sale its 20% stake in Kansanshi Mine to First Quantum Minerals who owns 80% of the Company’s shares.
While some sections of Government have refuted the report, the Minister of Finance Margaret Mwanakatwe is reported to be aware of the offer and has even added that there are other unsolicited offers.
JCTR Head of Programmes Geoffrey Chongo tells Money FM News that this impending sale is wrong for various reasons.
Mr. Chongo says firstly, it is at variance with the will of the majority Zambians considering views from many people who have commented on the issue.
He is of the view that with the challenges that Government has been facing to effectively tax mining companies, it is apparent to everyone that Government need to enhance its role in the management and exploitation of natural resources through increased shareholding for the benefit of the citizens.
“The intended sale of Government stake thus is a departure from this realization. It is also a betrayal to the highly publicized pro-poor philosophy on which the party was voted into power as 100% private ownership of the Country’s strategic assets will not ensure this. It has failed to do so since privatization days. Private ownership has failed to raise sufficient tax revenues for the Government, it has failed to create sufficient jobs for the Zambian people and it has failed to respect the environment. We should not be fooled or made to believe it will do so now,” he said.
The JCTR Head of Programmes says Zambia’s experience with privation under the IMF supported Structural Adjustment Programme is a proof that privation is not a panacea to the Country’s sustainable development path.
He says the Country is still reeling from the effects of surrendering assets in the hands of private hands whose sole motive is profit.
“A company like FQM cannot be trusted to have the interest of Zambians that we should surrender the Country’s assets to them. They have been threatening to dismiss over 2,500 employees due to a tax increase dispute with Government. They have also disputed the US$7.9 billion tax bill issued by the Zambia Revenue Authority following an audit. It will therefore be an act of naivety on the part of Government to entrust the entire Kansanshi mining assets in the hands of FQM,” he argued.
“For a Company that is reported to be valued at around US$7.9 billion, 20% shares should cost over twice the current offer price by FQM. Zambia has been on this road of selling its valuable assets for a song and should not repeat to tread the same road.”
He further argues that the Government is on record admitting that the US$25 million that Vedanta Resources PLC paid for KCM was insufficient.
“It would therefore be hypocritical for Government to tread the same path of self-destruction that the Country has been recovering from since the privatization days. The PF Government is actually on record of wanting to set up a commission of inquiry into the privatization process of Government assets. Government should further note that the percentage stake it holds in the Mines has enabled the it speak on behalf of the employees each time the Mines have threatened them with dismissal,” said Mr. Chongo.
The JCTR Head of Programmes has since strongly urged Government to resists the allure of the few pieces of silver being offered by FQM and prioritize the Country’s interest first.

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