VEDANTA Base Metal’s top priority in Zambia will be to restore the loss-making Konkola Copper Mines (KCM) to profitability and build up production from the current 70,000 tons a year to 300,000t/year by 2031.
That’s according to CEO Chris Griffith who told investors at the Mining Indaba conference that the group would invest $1.3bn into KCM to achieve this.
Only then would Vedanta look at other potential copper projects in Zambia and the neighbouring Democratic Republic of Congo (DRC), but the likelihood was that the group’s extensive copper interests in India and the Middle East would take priority for development.
This is despite the assessment given earlier in the day at the Mining Indaba by Ivanhoe Mines founder and co-chairman Robert Friedland that the bulk of future copper supplies needed by the world would be mined from Africa and that the DRC would be the “epicentre of mining on the planet”.
“We do not underestimate that it not just going to be a walk in the park to turn around an asset that has been run by the government or a provisional liquidator for the past five years,” said Griffith.
The Zambian government seized Konkola in 2019 claiming Vedanta had breached financial and environmental regulations but has now agreed to hand the mine back.
“So we have to put in a wagon-load of money and we have to demonstrate to shareholders that we can make a return.”
“Being a listed company I don’t think shareholders are going to be happy with us running around trying to be all things to all men and expanding just for the sake of expanding. Shareholders are happy with a certain growth profile that is focussed on returning cash to them,” he said.
“The DRC is a great place to be for copper potential and we will be looking over the fence but carefully. Copper assets are expensive whereas, at the moment, we have one of the best grades in the world. It needs a bit of love and attention, which we are going to give it, and that is going to be way cheaper than buying new copper assets.”
Griffith pointed out Vedanta already had a big copper footprint in India with potential to grow as well as in the Middle East.
Before joining Vedanta in September last year Griffith was CEO of Gold Fields but resigned in December 2022 following the group’s failure to take over North American gold producer Yamana.
That caused consternation in South African investment circles because Gold Fields had been outbid for Yamana by a competitor and there was no apparent reason for Griffith to quit as a result.
Asked why he had resigned, Griffith indicated it was because of the opposition of several substantial Gold Fields shareholders to the proposed takeover deal.
“Both myself and the Gold Fields board were of like mind around the strategy but there were shareholders that were not supportive of the process.
“I knew it was a big step but I still think it was a great deal and the fact that we were outbid demonstrates that some-one else thought so to.”
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