Vedanta to tie up with South African company for gold mining
THE ANIL AGARWAL-OWNED CONGLOMERATE TO INVEST $1 BN IN AFRICA
The Anil Agarwal-promoted Vedanta group was at the forefront of striking business deals during Prime Minister Narendra Modi’s visit to South Africa. It plans to tie up with a host of companies in South Africa, known for its natural resource sector.
In a telephonic interview from South Africa, Agarwal said that the group would invest another $1 billion in Africa. Besides, group company Hindustan Zinc Ltd (HZL) was also exploring a tie-up with Shaft Sinker for a recently bagged gold mine in India. “We are in discussion with the company for development of the mine. Currently, we are working with the Indian government on various clearances for the mine,” said Agarwal.
Vedanta, a diversified natural resources company, has presence across the entire value chain, from exploration and asset development to extraction, processing, and value addition. It produces 27 per cent of India’s domestic crude oil production, and occupies strong market positions across key commodities, producing 79 per cent of the country’s zinc, 47 per cent of aluminium, and 36 per cent of copper.
It hopes to enter the new segment of gold after it beat three
other bidders in February at an auction for the Baghmara gold mine in Chhattisgarh. The company expects to begin production in two years from the mine that has potential reserves of 2,700 kg.
Through Shaft Sinker, which has operations in South Africa, Belgium and Malaysia, Vedanta plans to bring in technology for gold mining. Shaft Sinker specialises in sinking and equipping of ultra-deep and wide vertical shafts, production, service, vent and sub-level shafts. The group also entered into a memoranda of understanding with two other South African companies Minova and Fermel during the visit.
The tie with Minova is for technology transfer on ground support system and the setting up of a manufacturing base in India. Fermel, under another agreement, will supply and maintain underground utility equipment.
The group has been operating in Africa since 2004. It has a copper mining operation in Zambia at the Konkola Mines and produces zinc and lead concentrate at Black Mountain Mining at Aggeneys in the Northern Cape Province of South Africa. Beside, it produces high grade zinc metal at Skorpion Zinc in Namibia. Vedanta started zinc mining in South Africa and Namibia after it acquired Anglo American’s business.
According to the company, it has already made an investment of about $4 billion in Africa, of which some $3 billion has been invested in KCM since acquisition. It recently commenced construction of Gamsberg Zinc Project at BMM, about 20 km from Aggeneys, one of the world’s largest undeveloped zinc sulphide deposits.
The Gamsberg project includes development of four million tonnes per annum (run of mine) open-pit zinc mine, concentrator plant and associated infrastructure at Gamsberg. Vedanta has plans to invest about $400 million there over the next two to three years and expects first ore production from it in 2018, with a 9-12 month ramp-up to full production. Agarwal said India’s engagement with South Africa was on two fronts - one, at a philosophical level because of its leaders Mahatma Gandhi and Nelson Mandela. On the economic side, South Africa has the world’s richest mineral resources and that knowledge base could be used in India.
India’s current trade with Africa is around $75 billion. Besides, India has extended financing of $7.4 billion for various developmental and capacity building projects over the past four years in Africa. As many as 140 projects have been implemented there by the Indian government and companies.
Agarwal said business and government-to-government discussions during the Prime Minister’s visit focused on Indian imports and investment in pharmacy, agriculture and food processing.
Besides, India was looking for technological tie-ups in the natural resource sector.
The Indian delegation signed several agreements and partnerships on energy, expanding maritime security and defence partnerships with the South African government and companies.
ANIL AGARWAL, CHAIRMAN, VEDANTA RESOURCES, AT GAMSBERG ZINC PROJECT AT BLACK MOUNTAIN MINING IN THE NORTHERN CAPE PROVINCE OF SOUTH AFRICA