Vedanta Resources, the parent company of Indian metals giant Vedanta Limited, announced on Friday, 5th July, that it has secured $250 million to start paying off debts related to its Konkola Copper Mines (KCM) in Zambia. This financial move is part of Vedanta’s efforts to regain control of the copper mine and smelter, according to a report from Reuters.
Paying Off Creditors
Vedanta, led by billionaire Anil Agarwal, stated that the funds will be used to settle the debts owed to the Zambian mine’s creditors by around 8th July. This step follows a deal with the Zambian government after Vedanta regained control of KCM.
Regaining Control
Vedanta took back control of KCM last year, ending a five-year dispute. The Zambian government had previously taken over the mine, accusing Vedanta of not investing enough to expand copper production. This conflict started under former President Edgar Lungu.
Benefits for Workers
Alongside the financial settlement, Vedanta announced a 20% pay rise for KCM workers and a one-time payment of 2,500 Zambian Kwacha (about $102) for each worker.
Future Plans and Capital Needs
Vedanta needs an additional $1 billion to restart and invest in the Konkola Deep Mining Project, which has some of the world’s richest copper reserves. The company is looking at various funding options, including raising money through debt or selling part of its stake in the mine.
Potential Stake Sale
Vedanta holds 80% of KCM and is considering selling up to 30% of its shares to raise funds for increasing copper production. The remaining 20% stake in KCM is owned by the Zambian government through ZCCM-IH, a state-owned company.
Recent Developments
Earlier discussions to sell a stake in KCM to the UAE-based International Resources Holding (IRH) fell through due to disagreements over asset valuation. In March 2024, Vedanta Resources revealed plans to reduce its debt by $3 billion over the next three years.
In summary, Vedanta’s recent financial manoeuvres aim to resolve outstanding debts for KCM, invest in expanding copper production, and explore potential stake sales to support these goals.
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