By DAVID McKAY –
VEDANTA chairperson, Anil Agarwal has informed an investment forum that Zambia was a preferred destination for his company which will pump $700 million into new copper production.
During a two-day visit in Zambia, he said the new funding would take Vedanta’s total investment to $1 billion.
Mr Agarwal, who also acquired voting rights over 21 percent of Anglo American (two percent directly in his personal capacity, and the balance in two mandatory exchangeable bonds), said Vedanta would build a new cobalt refinery and a coal-fired power plant at its Konkola copper and cobalt assets,
According to the miningmx report, the investment is through its Konkola Copper Mines (KCM) in which Zambian state-owned ZCCM-IH holds a 20.6 percent shareholding.
The business environment in Zambia is volatile with conflagrations and disputes kicking off almost at random with its keystone investors.
Last month, for instance, Zambia claimed that one of its other major and long-standing investors, First Quantum Minerals, owed its tax authority $7.9bn related to underpaid import duties it for machinery and other items which it alleged had not been paid. In a separate event, the country rationed electricity supplies to miners, including Glencore, as part of a dispute related to an increase in tariffs.
Unmoved by these conditions, Mr Agarwal said KCM planned to increase production to 400,000 tonnes a year “ in the next few years”. The growth will be driven by an injection of $700m, following Vedanta’s previous injection of $300m as part of a pledge to invest made by Mr Agarwal in 2007, according to a company press statement.
“Our desire is to have a win-win situation,” said Mr Agarwal on government and business relations. “The government must be happy the Zambian public must be happy and our communities must flourish.
“I was eager to come to Zambia almost 15 years ago at a time when KCM was facing a lot of challenges. We have now created a strong position for KCM after investing over $3bn. Last year I pledged to invest an extra $1bn,” he said. “We are targeting strong growth for KCM in the years ahead.” he said.