The billionaire Anil Agarwal’s Vedanta Resources has begun negotiations with a group of foreign investors to sell a sizable minority stake in Zambia’s Konkola Copper Mines (KCM), which it recently regained control of, according to sources who spoke to Moneycontrol on condition of anonymity due to the confidential nature of the discussions.
Glencore plc is a potential investor and one of the largest and most varied natural resource companies in the world. The Vedanta Group’s holding company, Vedanta Resources (VRL), is noteworthy for having obtained a $250 million loan from Glencore in May of 2014. A 4.4% stake in Vedanta Ltd., a subsidiary of VRL that is listed in India, used as collateral for the loan. Glencore has not replied to an email requesting a statement as of the time of publication.
As the mining business seeks to acquire funds to boost production at one of the world’s largest high-grade copper deposits, the action is being taken.
With a copper percentage of more than 2.4%, KCM is considered to be one of the richest deposits of high-grade copper in the world. Because of its substantial cobalt deposits and resources, the mine is positioned as one of the world’s top five cobalt producers. In order to meet the growing demand for copper and cobalt brought on by the global energy revolution and the popularity of electric vehicles, Vedanta plans to significantly increase output at the site.
Konkola Copper Mines’ reserves and resources contain 16 million tonnes of contained copper. With 412,000 tonnes of cobalt reserves and resources, the mine has the potential to be one of the top five cobalt producers in the world.
Vedanta lost ownership of the mine when the Zambian government placed KCM under provisional liquidation in 2019 on allegations that the company had failed to pay taxes and had misrepresented its growth ambitions. The dispute led to a protracted judicial battle before Vedanta and Zambian officials came to a deal in 2023. The agreement restored Vedanta’s ownership, allowing it to intensify its efforts to reopen the copper mine.
The decision comes as India’s biggest corporations are investing more in the copper sector to capitalize on its critical role in the development of infrastructure, renewable energy, and the electric vehicle (EV) revolution. By heavily investing in regional refining facilities, the Adani Group, Vedanta, and Hindalco—a branch of the Aditya Birla Group—are spearheading this copper rush.
India has very modest deposits of copper ore, about 0.31% of the world’s total. More than two-fifths of the country’s copper ore reserves and resources are held by Hindustan Copper, according to its FY24 annual report. Being India’s sole copper mining company, Hindustan Copper has significant sway over refiners.
The ongoing discussions with foreign investors are expected to help secure the capital required to increase KCM’s manufacturing capacity. Zambia, Africa’s second-largest producer of copper, has been working to improve its investment climate for mining companies.
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