LUSAKA, Aug 23 (AFP) - Zambia`s largest copper mine said Monday that it had agreed to sell a 51-percent stake to Indian firm Vendanta Resources for 48.2 million dollars (39 million euros).
State-owned Konkola Copper Mines (KCM) said an agreement had been reached to allow Vendanta Resources, through its subsidiary company Sterlite, to buy the controlling stake.
"The board is pleased to announce that the government of Zambia and Vendanta have reached an agreement on the terms of an investment by Vendanta into KCM subject to certain conditions," the statement read.
Zambian copper mining faced a major setback in 2002 when South Africa`s mining giant, Anglo American pulled its investment from KCM shortly after it bought the major stake in the copper mine.
At the time, Anglo cited high production costs and low copper prices as the reason for their withdrawal.
In the same year, the mine suffered losses amounting to 159 million dollars.
Vendanta then stepped in to fill the gap at the mine that produces some 70 percent of the country`s total copper output.
"Vendanta will contractually not exit KCM prior to January 2008," read part of the agreement, seen as a measure to prevent a walkout similar to that of Anglo.
Copper mines generate about 60 percent of foreign earnings in the poor southern African country, which is struggling to repay a foreign debt of about 6.5 billion dollars.
Vendanta will acquire three mining assets under KCM, including Napundwe mine outside Lusaka and the Nchanga Copper mine and the undeveloped Konkola Option in Zambia`s northern copper belt.
The KCM group employs about 10,600 workers.