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Vedanta Commits Rs 250 Mn Pre-Mine Payment to Zambia Creditors

2023-08-25

Vedanta Resources Ltd., led by Anil Agarwal, plans to settle a Rs 250 million debt with suppliers in Zambia as it regains control over copper mines that were seized by the Zambian government over four years ago.

The Konkola Copper Mines, which falls under Vedanta's purview, had been put under provisional liquidation by the previous Zambian administration due to concerns about expansion plans and tax payments. This led to a legal dispute that has now been resolved under President Hakainde Hichilema's administration.

Agarwal is committed to easing Vedanta's substantial debt burden and has pledged to invest Rs 1 billion in Konkola. He aims to double the mine's copper output, which is particularly important as global demand for copper increases for clean energy applications.

Agarwal's promise to pay off all creditors is aimed at building public trust. He mentioned, "Money will never be a constraint," underscoring the significance of maintaining positive public sentiment.

Vedanta faces a Rs 2 billion bond repayment in 2024, including a significant Rs 1.1 billion instalment in January. Following this news, Vedanta's shares witnessed a 1.3% rise in Mumbai.

For Zambia, boosting production at Konkola is essential for increased tax revenues, crucial in a country heavily dependent on copper exports. The Konkola operations encompass shafts, a smelter, and a refinery, producing around 50,000 metric tons of refined copper annually. Comparatively, First Quantum Minerals Ltd. produced 390,000 tons from their copper mines last year.

Vedanta, a leading Indian mining company, operates across various metals including aluminium and zinc. The company's ventures in Africa, such as Namibia and South Africa, reflect Agarwal's commitment to the continent. Agarwal expressed his strong connection with Africa, stating that if he were to "marry two wives," they would be India and Africa.

During the interview, Agarwal hinted at Vedanta's potential plans, including a potential Rs 7 billion sale of its steel assets and an upcoming semiconductor venture in India. Agarwal reiterated the company's dedication to these projects and suggested that announcements could be forthcoming.