ZEMA has ordered Chinese-owned Nonferrous Cooperation Africa Mining to halt its operations at its South East Ore Body project.
But NFCA chief executive officer Wang Chunlai says the company was shocked and found ZEMA's action rather draconian.
NFCA's South East Ore Body (SEOB) worth US$832 million (about K5 billion) was approved by the Zambia Environmental Management Agency (ZEMA) on September 5, 2012.
The project, which was anticipated to create over 5,000 jobs upon completion, was however mired in controversy with other stakeholders and investments within Chambishi among them, the Hybrid Poultry Farm, one of the largest producers of chickens in the country contesting the project, arguing that it would affect the production of chicks.
According to a letter addressed to NFCA mining chief executive officer Wan Chunlai, dated November 27, 2013, ZEMA director general Joseph Sakala stated that the mining company had failed to comply with the conditions of the decision letter dated September 5, 2012 and in particular clauses 3.1.3 and 3.1.4.
In the decision letter, clause 3.1.3 stated that NFCA shall immediately cease project operations impacting on the affected households and that the company shall instead prepare a comprehensive resettlement action plan after full consultation with all affected parties.
Clause 3.1.4 stated that NFCA should initiate an open dialogue and conflict resolution system with the affected people and that the project implementation by the mining company shall only take place after all the conflicts have been resolved and all parties concerned are fully satisfied with the outcome.
"In view of the foregoing, the agency hereby revokes clause 3.5 of the decision letter. This action entails that the said decision letter is herby suspended. The consequence of this is that you must forthwith cease all operations or activities at the project site until such a time that you have complied with requirements stipulated under clauses 3.1.3 and 3.1.4 of the said decision letter," Sakala stated.
Sakala warned that should NFCA fail to adhere to the directive, the Agency would have no option but to cancel the said decision letter as well as take other actions tenable at law.
But in his reply, Chunlai stated that ZEMA's action was not in the best interest of the country besides discoursing huge foreign investments.
Chunlai said NFCA had not even been availed the copy of the audit report upon which the decision to stop the mining company from conducting all activities at the project site were made.
He stated that it was important that the audit report was availed to NFCA so that appropriate steps or responses to issues that were raised could be taken or made.
"We find your action rather draconian. The mining project will have an investment of not less than US$800 million and so far, US$110 million had been invested for construction. With the completion of the project, 5,000 job opportunities would be provided and the huge financial contribution will be made through tax payments to the government," Chunlai stated. "Mining projects have time sensitivity and your action will decelerate the timeframe of the project. We do not think that this is in the best interest of your country."
He stated that the project in question was the first African asset to be listed on the Hong Kong stock exchange.