LUSAKA - A Zambian court on Monday dismissed a motion by miner Vedanta Resources' seeking to stop a state-appointed provisional liquidator from splitting up its Konkola Copper Mines (KCM) unit and selling the assets.

The ruling is a blow to the Indian-owned mining company which has said it would fight any attempt by Zambia to sell KCM to third parties.

Vedanta has been locked in a protracted dispute with the Zambian government since May 2019, when the Zambian government, which owns 20% of KCM through state mining investment firm ZCCM-IH, handed control of the mine to a liquidator.

Judge Winnie Sithole-Mwenda discharged a Jan. 18 injunction order which Vedanta had sought to restrain Provisional Liquidator Milingo Lungu from splitting KCM and selling the assets. Lungu has previously said asset disposal is KCM's last remaining option

Vedanta Resources declined to comment on the ruling.

The provisional liquidator said: "As KCM we welcome the ruling."

Lungu said the order that instated him as provisional liquidator set out powers including the ability to split and sell the company.

In a restructuring announced in December, Lungu said KCM would be split into two subsidiary companies: KCM SmelterCo Limited and Konkola Mineral Resources Limited, effective Feb. 1.

While the split was delayed by Vedanta's injunction order, Lungu on Monday told Reuters he is confident the two entities will begin to operate soon.

Sithole-Mwenda cited procedural reasons in dismissing the order.

"The ex parte Order of Injunction dated 18th January 2021 is, accordingly, discharged forthwith," she wrote in the ruling.

The ruling awarded costs to the defendants (the provisional liquidator and KCM) and denied leave to appeal.

Vedanta and Zambia are still in arbitration proceedings in London over the KCM dispute, which began when the government accused Vedanta of failing to honour licence conditions, including promised investment.

Vedanta has previously denied that KCM broke the terms of its licence.

Zambia's Court of Appeal in November ordered a halt to KCM liquidation proceedings, to allow Vedanta and ZCCM-IH to proceed to arbitration. ZCCM-IH is appealing that ruling.