Vedanta Resources Ltd.’s Zambian copper mining unit has engaged Rand Merchant Bank to facilitate a substantial debt financing endeavor aiming to secure up to $1 billion for the expansion of its operations in the region. The unit, a subsidiary of Vedanta owned by Indian magnate Anil Agarwal, has initiated the process of accessing lenders to support investments at Konkola Copper Mines, sources familiar with the situation revealed on condition of anonymity. The debt-raising initiative remains in its nascent stages, the sources emphasized.
Vedanta reclaimed control of 80% of KCM approximately ten months ago following the resolution of a protracted dispute with the Zambian government, a resolution that involved committing to inject $1 billion into the operations. Since reassuming ownership of the mines, the company has already channeled $330 million primarily towards settling outstanding debts. KCM is currently in the process of ramping up its annual copper production to 300,000 tons, a significant surge from the 40,000 tons recorded in 2023 when the assets were under the management of a court-appointed administrator.
Despite concerns over the potential impact of global economic uncertainties, including fears surrounding the implications of President Donald Trump’s trade policies on copper demand, major players in the industry are steadfast in their efforts to boost production levels. This strategy is underpinned by forecasts of sustained deficits in copper supply, a critical component in the transition to renewable energy sources. Noteworthy mining entities such as Barrick Mining Corp., First Quantum Minerals Ltd., and China Non-Ferrous Metals Co. are all heavily investing in copper projects in Zambia, a country that ranks as Africa’s second-largest copper producer.
Vedanta has committed to injecting around $1 billion into KCM over a five-year period, with a significant portion earmarked for the completion of the underground Konkola Deep operation. The company is exploring various financing avenues, which include internal reserves, debt instruments, and potential equity options, according to a Vedanta spokesperson. Additionally, discussions have been held regarding the potential listing of KCM, as disclosed by Ajay Goel, the chief financial officer of Vedanta Ltd., in an interview with Bloomberg Television.
RMB, the financial institution engaged by Vedanta, declined to provide any comments on the matter when approached. The move by Vedanta to seek substantial debt financing for its Zambian copper operations underscores the ongoing efforts within the mining industry to secure funding for expansion and modernization projects, particularly in regions rich in mineral resources like Africa.
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