Vedanta faces 'difficult in situation' in Zambia, amid low copper prices and rising taxes

On Monday the chief of mining group Vedanta Resources said its copper division in Zambia was facing “a very, very difficult situation”, due to the low prices for the metal and soaring taxes.

In January, Konkola Copper Mines said it was revising its operations in the country, Africa's biggest copper producer after the Democratic Republic of Congo, as copper prices fell to their lowest level in five years.

Earlier in 2015, the Zambian government unveiled plans to raise royalty taxes from 6% to as much as 20%. It also withheld more than $600m (£393.5m) in refunds to miners, including Vedanta, which it claimed had failed to supply the required documents for value-added taxes.

“We will have to make some very difficult decisions, even with the support of the government,” Vedanta chief executive Tom Albanese reportedly said at a panel discussion in Cape Town.

"A situation where the government is chasing capital and chasing investment away, it makes our jobs even harder.”

Copper has rose 6.4% since reaching $5,339.50 a metric ton on 26 January, its lowest since July 2009.

On Tuesday, Vedanta shares closed down 4.21% to 440.63p.