Vedanta Resources Seeks Financing to Revitalize Zambia Copper Operations

Vedanta Resources Seeks Financing to Revitalize Zambia Copper Operations

Vedanta Resources is actively seeking financial partnerships to rejuvenate the Konkola copper mining and smelting complex in Zambia. Discussions have been held with commodity traders, including Mercuria Energy Group, to establish tolling and prepayment facilities for the copper produced at Konkola Copper Mines.

The company is also considering selling a minority stake in KCM as part of its strategy to manage its debts and fund enhancements at the mines, which have been under provisional liquidation since 2019. Following a legal settlement with the Zambian government in September, Vedanta agreed to pay $250 million towards KCM’s outstanding supplier debts and committed an additional $1 billion for underground expansion over the next five years.

Vedanta aims to secure around $1.4 billion, focusing initially on meeting imminent creditor payments. A spokesperson for Vedanta mentioned engaging with potential partners for both short-term financial and long-term equity financing, although specifics remain confidential due to the sensitivity of ongoing discussions.

The financing strategies include prepayment facilities, a common practice in the mining industry where commodity deliveries are used to amortize cash advances from trading houses. This method has become more prevalent as traditional banking support has waned, despite rising copper prices.

KCM, known for its significant but challenging operations, including the Konkola Deep mine, one of the world’s deepest and wettest, requires extensive daily water management. Despite a smelting capacity of over 300,000 tons annually, recent production has been substantially lower, with less than 40,000 tons produced in 2023. The smelter not only processes ore from Konkola but also handles third-party concentrates. icon

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