Vedanta Resources Nears Reacquisition of KCM Amid Expected Surge in Demand
Vedanta Resources Ltd. is on the verge of reclaiming control of the Konkola Copper Mine in Zambia and plans to rapidly increase output in anticipation of soaring demand in the coming years.
Billionaire Anil Agarwal’s firm is prepared to pay $250 million to settle the mine’s debts, enabling access to the asset once more, according to Chris Griffith, head of Vedanta’s base metals unit, in a recent interview in London.
Konkola Copper Mines was placed under provisional liquidation in 2019 after the previous government accused its owner of misrepresenting expansion plans and underpaying taxes.
Copper is essential for a wide range of applications, from power grids and electric vehicles to data centers driving the AI revolution.
Optimistic projections about future demand, as the world electrifies, pushed prices to a record high last month, with analysts forecasting that supply will lag behind demand for years.
“We think we are now literally weeks away from getting the asset back,” Griffith said. “One of the world’s prime and premier copper mining assets is going to come back at a time when the world needs copper.”
Before Vedanta can return to Konkola, a Zambian court must approve the creditor-backed deal, which would require Vedanta to release the $250 million to settle some debts accrued since the liquidator was appointed. Outstanding obligations to suppliers will be paid when the project becomes profitable.
“The money is ready to flow,” Griffith stated, adding it would be “premature” to specify how his firm is raising the funds. Bloomberg News reported in April that Vedanta had discussed tolling and prepayment arrangements with commodity traders, including Mercuria Energy Group Ltd., to meet upfront capital needs.
Vedanta and the current administration resolved the impasse in September, with the company agreeing to spend about $1.3 billion on the asset capable of producing more than 300,000 tons of metal annually.
In addition to paying down the debt, Agarwal’s firm has committed to investing $1 billion over five years to complete expansion projects.
The company is also looking to sell a minority stake in Konkola to finance development. International Resources Holding, the mining unit of Abu Dhabi’s largest listed company, which recently acquired another large Zambian copper project, is among the firms that have discussed acquiring shares, Griffith said.
Output from Konkola’s plant, which processes ore extracted from the mine as well as third-party supplies, slumped to less than 40,000 tons of copper last year.
Vedanta aims to increase output to 250,000 tons in the next few years, with about 40% coming from its own ore. The long-term goal, over the next decade, is to produce copper exclusively from its own reserves, Griffith added.
The flagship operation, Konkola Deep, extends almost a mile underground. It is one of the world’s wettest mines, requiring the equivalent of 140 Olympic-sized swimming pools to be pumped to the surface daily to function.
