Vedanta to tie up with South African com­pany for gold min­ing

THE ANIL AGARWAL-OWNED CON­GLOM­ER­ATE TO IN­VEST $1 BN IN AFRICA

Resource Digest - - CONTENTS -

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

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