Anil Agarwal-owned metals major Vedanta Resources Ltd said that its arm Vedanta Resources Holdings Ltd has regained management control of the Konkola Copper Mines in Zambia, ending a protracted, five year-saga with the Zambian government after it seized the mines from the company in 2019.
In a statement, London-based Vedanta Resources said the arm has deposited $245.75 million under the scheme of arrangement it agreed with the Zambian government last year for Konkola Copper Mines, which paved the way for the mines' board of directors to be restored with immediate effect.
The Zambian government owns 20 percent of the mine through ZCCM Investment Holdings. Former Zambian president Edgar Lungu seized the mines from Vedanta Resources, alleging that key mining and investment targets were not met, which set in motion a series of legal proceedings that were settled by Vedanta and the Zambian government under the country's new president Hakainde Hichilema, in September 2023.
While that settlement ensured that Vedanta Resources' control over Konkola Copper Mines would resume, it had to clear nearly $250 million that it owed to local creditors. The company raised that amount earlier this month, with Vedanta Resources also planning to expand production at the mines over the next few years, as well as raise workers' salaries.
"We are confident that with the full support of the government and other key stakeholders, we will soon be able to help KCM turnaround and reach its full potential, both as a world-class copper and cobalt asset that is well equipped with a smelter and a robust tailings leaching plant, and as a growth engine for the socioeconomic development of the Zambian nation," said Chris Griffiths, chief executive officer of Vedanta Base Metals.
Vedanta's planned ramp-up in the copper business also comes at a time when global copper prices have witnessed a rally since the beginning of the year, as consumption in China, the world's largest copper consumer, has picked up after a government-led stimulus. Despite a dip since May, copper prices on the London Metal Exchange remain on the higher side, at around $9,400 per tonne, over lows of around $8,000 per tonne in February.
Vedanta Resources' statement said that Konkola Copper Mines has one of the largest deposits of high-grade copper globally, and is also one of the top five deposits of cobalt. The company said that it plans to step up copper production at the mine to 300 kilotonne per annum, and cobalt production to 6 kilotonne per annum, from the current 1 kilotonne per annum.
The full return of Konkola Copper Mines to the Vedanta fold is a shot in the arm for the metals firm's copper operations, after India's apex court refused the company's plea to reopen the shuttered copper plant in Thoothukudi, Tamil Nadu. The plant, part of the group's Sterlite Copper operations, was closed down by the Tamil Nadu government over environmental violations in 2018, after police fired on protesters demonstrating against the company, leaving 13 people dead.
As a result of the closure, the company has not been able to operate the 400 kilotonne copper smelting plant and associated facilities at the site. A Vedanta spokesperson said that it is "too early to comment" on whether the company plans to permanently close the Thoothukudi site after the Supreme Court order. The company operates a refinery and two copper rod plants in Silvassa, Daman.
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