The ruling - titled “Ex-parte order to stay some of the powers of the provisional liquidator” - stated that certain acts could not be performed by the liquidator during the wind-up petition, which has excluded majority shareholder Vedanta from the legal proceedings.

Specifically, Milingo Lungu, the lawyer earlier appointed as KCM's provisional liquidator, is not allowed to “dispose of assets by public tender or the most transparent manner under the circumstances.” He also can not “sell the real, the personal property and things in action of the respondent [KCM] by public auction, public tender or private contract” before the wind-up petition hearing, to be held the morning of July 4. 

This court document came after local media Zambia Daily Mail reported on June 24 that China Non-Ferrous Metal Mining Group (CNMC) has declared interest in taking over KCM's operations.

CNMC has other interests in Zambia, having invested $1.1 billion in the country's Chambishi mines and smelting facilities. 

“We have proved our ability to run a profitable copper-producing business in Zambia,” a company source told Fastmarkets earlier this week, without commenting on the details of the possible bid due to the early stages of the talks.

Local media Lusaka Times also reported on June 20 that Zambian President Edgar Lungu planned to conclude the sale of KCM in July. 

Companies based in Turkey, Russia, India, Canada and China have submitted “expressions of interest” for KCM, the president said.

The Zambian president's talks about selling KCM's assets within a month “are deeply worrying,” according to Vedanta, which has invested more than $3 billion in KCM's facilities since acquiring them in 2004.

“[The talks] imply that a decision to sell the assets was taken in advance of any court ruling and without Vedanta being given the opportunity to be heard. KCM is not for sale and Vedanta will challenge any attempt to sell the business without its consent,” the Indian company said on June 20.
 
The apparent takeover, the first of its kind, has sent shockwaves through the Zambian copper industry.

The Nchanga copper smelter, which has a 311,000-tonne-per-year capacity, is a core asset of KCM but was seized by liquidators after the Zambian government filed a liquidation order on May 21 with the intention of forcing Vedanta out of Zambia, the second-largest copper producer in Africa. 

Since then, Vedanta has not had any access to the smelter while its operating status remains a puzzle to the industry. The smelter was known to be suspended in early June. 

While some market participants suggested the possibility of restarting the smelter in late June, it is difficult to identify new funding sources to maintain the $50-million-per-month operating cost. 

Notably, Wednesday’s ruling also stated that Lungu could not “make any compromises or arrangements with creditors” prior to the final wind-up petition hearing. 

Meanwhile, the absence of the Nchanga smelter has already affected the copper market. Some clients of KCM, a major blister copper supplier to China, have told Fastmarkets that they would not be receiving their June deliveries, leading to tightness in the blister copper market.   

The Nchanga smelter has a nearly 1-million-tpy copper concentrate processing capacity, with some of the feed sourced from the neighboring Democratic Republic of the Congo. The smelter's optimal feed is for copper content of up to 40%.

Treatment charges (TCs) have also been impacted. Fastmarkets' copper concentrate Asia-Pacific TC import index was calculated at $53.50 per dry metric ton on Friday, down by 1.1% from $54.10 per dmt a week earlier due to tight availability.