UAE’s IRH Targets Majority Stake in Vedanta’s Zambian Copper Assets
Abu Dhabi’s International Resources Holding (IRH), backed by the UAE’s prominent conglomerate, is aiming to secure a controlling interest in Vedanta Resources’ Zambian copper assets, signaling a strategic move to strengthen its position in Africa’s copper mining sector.
Sources familiar with the matter revealed to Reuters that IRH, a subsidiary of International Holding Company, has proposed a deal surpassing $1 billion to acquire a 51% stake in Konkola Copper Mines plc (KCM), currently owned by Vedanta.
IRH’s ambitious bid follows its recent acquisition of a majority share in Mopani Copper Mines Plc for $1.1 billion, reflecting its determination to establish a dominant presence in African copper mining.
The company is also eyeing further expansion opportunities, including the potential purchase of EMR Capital’s interest in Lubambe Copper Mine Limited, also situated in Zambia.
This aggressive acquisition spree underscores the strategic objective of oil-rich Gulf nations, particularly the UAE and Saudi Arabia, to secure essential metal supplies from Africa, aligning with global trends toward sustainable energy sources.
However, negotiations for the majority stake in KCM are ongoing, with Vedanta potentially hesitant to cede control, given its longstanding desire to retain ownership of these assets.
While IRH’s offer is non-binding, it demonstrates the firm’s commitment to strengthening its foothold in the copper mining sector.
Vedanta’s decision to divest a portion of its 80% stake in KCM aims to raise capital for revitalizing these assets, which were embroiled in a dispute with the Zambian government in 2019.
With the Zambian government holding a 20% stake in KCM, Vedanta seeks to leverage Standard Chartered’s expertise to manage the divestment process effectively.
Chris Griffith, CEO of Vedanta’s base metals unit, outlined plans to secure approximately $1 billion for KCM investment over the next five years, alongside $300 million to settle local debts.
Much of this funding will support the Konkola Deep Mining Project, home to one of the world’s largest copper deposits.
While Vedanta explores various investment options, potential investors may weigh operational challenges, including groundwater management issues at the Konkola Deep underground operation.
With copper prices trending upward, investor interest is high, and the outcome of negotiations between IRH and Vedanta could reshape the African copper mining landscape, reflecting shifting dynamics in global resource acquisition strategies.
SOURCE:www.vccircle.com
