Billionaire Anil Agarwal-led Vedanta Resources has initiated discussions with a group of global investors to sell a significant minority stake in Zambia’s Konkola Copper Mines (KCM), which it recently regained control of, sources told Moneycontrol on condition of anonymity, as the discussions are private.
Potential investors include Glencore plc, one of the world's largest globally diversified natural resource companies. Notably, in May last year, Glencore lent $250 million to Vedanta Resources (VRL), the holding company of the Vedanta Group. The loan was pledged against a 4.4% stake in Vedanta Ltd, the India-listed subsidiary of VRL. An email request to Glencore seeking a response remained unanswered until press time.
The move comes as the mining conglomerate seeks to raise funds to ramp up production at one of the world's largest high-grade copper deposits.
With copper content exceeding 2.4%, KCM is considered among the richest sources of high-grade copper globally. The mine also holds substantial cobalt reserves and resources, positioning it as a potential top-five cobalt producer worldwide. Vedanta aims to significantly boost production at the site, with plans to increase copper and cobalt output as it looks to tap into the growing demand for these metals, driven by the global energy transition and the rise of electric vehicles.
Also Read: S&P raises Vedanta Resources' rating on easing refinancing risks
Konkola Copper Mines has reserves and resources of 16 million tonnes of contained copper. The mine also has cobalt reserves and resources amounting to 412,000 tonnes, reinforcing its potential to be one of the top five cobalt producers globally.
Vedanta lost control of KCM in 2019 when the Zambian government placed the mine into provisional liquidation, citing allegations that the company misrepresented its expansion plans and failed to meet tax obligations. The dispute led to a protracted legal battle, culminating in a settlement between Vedanta and the Zambian authorities in 2023. The agreement restored Vedanta’s ownership, paving the way for its renewed efforts to revive operations at the copper mine.
The development comes as India’s biggest conglomerates ramp up their stakes in the copper sector, positioning themselves to capitalize on its critical role in infrastructure development, renewable energy, and the electric vehicle (EV) revolution. Companies like Vedanta, Aditya Birla Group’s Hindalco, and the Adani Group are spearheading this copper rush, investing heavily in domestic refining capacities.
India has very limited copper ore reserves, accounting for about 0.31% of the world's total. Hindustan Copper holds around two-fifths of the copper ore reserves and resources in the country, according to its FY24 annual report. As the sole copper mining company in India, Hindustan Copper wields significant leverage over refiners.
Also Read: Vedanta Q3 results: Net profit jumps 77% to Rs 3,547 crore
The ongoing discussions with global investors are expected to help secure the capital required to enhance production capabilities at KCM. Zambia, Africa’s second-largest copper producer, has been working to improve its investment climate for mining companies.
Responding to a query from Moneycontrol, a spokesperson for Vedanta Group said: "Vedanta Resources continues to evaluate a range of financing options, including additional internal accruals, debt instruments, and equity options to continue investing in Konkola Copper Mines (KCM) and its operations so that it reaches its optimum production rate within the shortest period of time. This is part of our standard operating procedure. We are pleased to share that we are delighted with the progress we have made to date."
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