Vedanta to invest another $1.5 bn in Zambia
Vedanta Resources, the metals and mining major headquartered in London and promoted by non-resident Indian Anil Agarwal, plans to invest $1.5 billion in Zambia to expand its production of copper cathodes to half a million tonnes by 2013.
The single largest foreign investor in Zambia, Vedanta has already invested $1.5 billion and is also looking at foraying into power generation in that country.
The company has several businesses in India, having acquired Bharat Aluminium for Rs 550 crore (Rs 5.5 billion/$110 million) in 2006, and later picking up Hindustan Zinc for Rs 600 crore (Rs 6 billion/$120 million). It also owns iron ore producer Sesa Goa, and last June bought the Dempo group's mining and maritime businesses in Goa for Rs 1,750 crore (Rs 17.5 billion).
This apart, it has aluminium smelters at Tuticorin in Tamil Nadu and Jharsuguda in Orissa. However, its plans to mine bauxite from the Niyamgiri hills in Orissa, for which it has sought lease of nine mines, have met with stringent opposition by local residents.
In Zambia, the company owns a majority stake in Konkola Copper Mines (KCM) that operates the country's largest copper mines. Copper is the lifeblood of Zambia, which had been badly hit when the prices of the metal slid last year.
With copper prices having now gone up, Vedanta has drawn up plans to expand production by investing in removing bottlenecks in its mining operations. It is also expecting a turnover of $900 million in 2009-10, up from around $700 million in 2008-09.
"Ultimately, we plan to reach a production of half a million tonnes of copper cathodes by 2013, from our current production of 150,000 tonnes," said Rahul Kharkar, head of KCM's corporate affairs and company spokesperson.
This would translate into increasing the mining of copper ore to 7.5 million tonnes annually from 2.2 million tonnes now. "The plans for expanding the process have already been drawn up. We have already got approval for three-four projects," he added.
KCM also plans to foray into power production by setting up a captive power plant. "We want to start by producing 300 MW (of electricity) and want to expand to 1,000 MW in phases," said Kharkar.
According to him, KCM has always given priority to power as mines would get flooded if there was any blackout. "We could feed the surplus power generated into the national grid. Incidentally, Zambia is part of the Southern African Power Pool (SAPP). So, for instance, I can set up a project in Zimbabwe and wheel in the power into Zambia," he added.
KCM, which has two underground mines and three open pit mines, is headquartered in Zambia's copperbelt province of Chingola.
Vedanta had taken control of KCM in 2004, but it has not been a smooth ride. Last November, there was a labour protest at one mine over pay which had deteriorated into stone-throwing. "We had fired 35 workers, out of whom 13 were reinstated after appeal."
The KCM official said the company had major corporate social responsibility projects, which included bringing the prosthetic Jaipur Foot to Zambia. "We have also distributed free spectacles when we invited Shankar Nethralaya to come here," Kharkar said.
The company now plans to set up a university in Zambia.