Zambia citizens' group takes mining companies to court

Zambia's leading mining advocacy organisation, Citizens for a Better Environment (CBE), has begun legal processes against some of the country's mining companies, accusing them of defaulting on payment of mandatory environmental liabilities to a government environmental fund.

The first firms being sued are two copper producers (one of which, LCM, earlier announced it was ceasing operations due to poor copper prices) and Lafarge Cement Zambia, a subsidiary of one of the world's biggest cement manufacturer.

CBE sues mines

Bennet Simbeye

Sunday Times of Zambia

9th February 2009

CITIZENS for a Better Environment (CBE) have sued Luanshya Copper Mines (LCM) and Chambishi Metals PLC, two of Zambia's mining companies, for defaulting on payment of statutory environmental liabilities of over US $23 million on their mining operations.

And the organisation has also sued Lafarge Cement Zambia, the country's sole cement manufacturer, for $12, 943, 983. 82 for non-payment of environmental liabilities of its Ndola and Lusaka operations.

According to the writ of summons filed in the Kitwe High Court on February 4 this year, CBE has sued LCM for $8, 700, 732 payable to the Environmental Protection Fund (EPF) under the Ministry of Mines as mandatory contribution for the mining company's decommissioning, closure and post-closure environmental liability in respect of Luanshya and Baluba operating facilities.

The organisation is also claiming $3, 660, 020 as mandatory contribution of the defendant for its decommissioning, closure and post-closure environmental liability in respect of Luanshya and Baluba non-operating facilities.

CBE is further claiming $7, 794, 771 and $4, 257, 999 also as mandatory contribution of the defendant for its decommissioning, closure and post-closure environmental liability in respect of Mulyashi mining project and Chambishi Metals Plc operating and non-operating facilities respectively.

CBE executive director Peter Sinkamba filed the suit on behalf of CBE again LCM, who are also owners of Chambishi Metals.

Mr Sinkamba said in an interview that the mining company had defaulted in making the mandatory payments to the EPF, whose deadline was on July 20, last year.

He said his organisation had taken the decision to take the company to court especially that it was now winding up operations and that his organisation did not want to see a similar situation as that in Kabwe town were government had been using taxpayers' and donor funds to deal with the lead poisoning that had been caused by the mining company there.

And the environmental protection organisation has further sued Lafarge Cement Zambia for $12.9 million for non-remittance of the mandatory contributions for environmental liabilities to the EPF on their operations in Lusaka and Ndola.

CBE in writs filed on January 26 this year in the Kitwe High Court, is claiming $883, 419.35 as 20 per cent of the statutory cash contribution of the total liability payable into the EPF for the Lafarge Lusaka plant with option to settle in five equal instalments over a period of five years.

The organisation also sought a bank guarantee or insurance bond of $3, 533, 677.38 as statutory redeemable instrument contribution into EPF or the Lusaka plant, which the defendants could opt to pay at once or in a five-year scheme.

Other claims include a $1, 705, 377. 42 as contribution of the total liability to the EPF for the Lafarge Ndola plant which should be settled in five equal instalments over five years, and a bank guarantee or insurance bond worth $6, 821, 509.67 as statutory redeemable instrument contribution to EPF for its Ndola plant.

The claims also include costs of the environmental audit which was executed to assess the EPF liability of the defendant for both Lusaka and Ndola plants, interests and legal costs.

And Mr Sinkamba said similar court actions would be applied to other defaulters for failure to resume payments to the EPF.