South African news site 24.com runs a story today on the ZCI-Vedanta negotiation that has been confusing me for so long. I think it gives us a better idea of what this whole argument is about.
It may well be that the key question is: what price will ZCI shareholders get for their stock if Vedanta exercises its 'right to buy out' ZCI? The story notes, "the arbitrator set August 12 2005, the date on which Vedanta exercised its call option, as the valuation date, I doubt that it [Vedanta] will walk away. The arbitrator's decision has in effect given Vedanta a free ride on the past two-and-a-half years of a generally booming copper market, and regardless of the situation at any particular mine, any established copper producer must surely be worth a whole lot more now than it was then."
This leaves open the question of why the Zambian Government and other parliamentarians should be bothered about which of two private sector entities does better out of this process, but it explains why ZCI shareholders would be lobbying for the sale to happen on the LuSE, where they would expect a much higher price.
Here are the questions I first asked in an earlier blog entry. I still think they're relevant.
"Is ZCI, or the Copperbelt Development Corporation (one of ZCI's main shareholders, and sometimes seemingly called the Copperbelt Development Foundation) worth defending? Why? What does it do to secure the interests of workers and communities on the Copperbelt? Will it keep doing so if sold on the LuSE? If not, should we object to the sale of the shares to anyone?"
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