Zambia, which defaulted on payments to bondholders in November, is doubling down on debt with a high-stakes bet that nationalizing one of its biggest copper mines will help rescue its flailing economy, The Wall Street Journal reported. Once seen as among the most investment-friendly countries in the region, the landlocked nation in south central Africa is the most extreme example of a wave of populist governments in mining-dependent countries that are struggling to pay the bills after borrowing for infrastructure in recent years.
Zambia must build majority stakes in selected mines to benefit from its mineral wealth beyond taxes, President Edgar Lungu said on Thursday, as he set out an economic recovery plan after the country defaulted on a debt payment last month, Reuters reported. Africa’s second-biggest copper producer, Zambia is seeking to increase its control over the mining sector - the country’s main generator of hard currency - as it navigates a debt crisis.
Jesuits in Africa are calling on the Catholic Church to press for better repayment terms on debt across the region after Zambia defaulted on a $42.5 million Eurobond coupon in November, America Media reported. The default sparked fears of a regional economic crisis and ripple effects on already struggling Zambians because of increased taxation and curtailed spending on social services, even as health needs increase because of the coronavirus.
Zambian authorities formally requested a financing arrangement from the International Monetary Fund (IMF), the Fund said on Tuesday, to help the southern African copper producer navigate a debt crisis, Reuters reported. Zambia became Africa’s first pandemic-era sovereign default last month after it failed to pay a $42.5 million coupon on one of its Eurobonds. Zambia’s presidency released a photo of President Edgar Lungu meeting with the head of the IMF’s Africa department Abebe Selassie in the capital Lusaka on Tuesday.
Zambia’s state mining arm ZCCM-IH plans to appeal a court ruling in favour of Vedanta , which has sought arbitration in a dispute over its jointly owned copper mine that is facing liquidation, the mining minister said. India-based Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when Lusaka appointed a liquidator for the mine. “ZCCM-IH has already indicated that they are appealing because they are not happy with the court judgment,” Mining Minister Richard Musukwa told parliament on Thursday. Last week, a Zambian court ordered a halt to liquidation
Zambia is seeking a compromise solution with bondholders and does not expect them to seize its mining assets even though it defaulted on part of its debt last week, Mines Minister Richard Musukwa said on Thursday, Reuters reported. He also said Zambia had no plans to sell its shares in mining companies to raise cash after the country, which is Africa’s no.2 copper producer, failed to pay the $42.5 million coupon on its Eurobond debt on Friday. “We don’t expect Zambia’s assets to be auctioned or taken away,” he told a news conference.