Indian mining giant Vedanta Ltd. appears likely to retain ownership of its Konkola Copper Mines (KCM) in Zambia after a potential acquisition by a United Arab Emirates-based company fell through. The deal reportedly collapsed due to disagreements between the two parties regarding the value of the copper mine.
Stalled Negotiations with an Emirati Firm
International Resources Holding (IRH), the mining arm of Abu Dhabi’s powerful sovereign wealth fund International Holding Company (IHC), had expressed initial interest in acquiring a significant stake in KCM. Earlier reports from Reuters in April 2024 suggested IRH offered more than $1 billion for a controlling 51% stake in the mines. This move aimed to solidify IRH’s position in Zambia’s copper sector, following their successful acquisition of a majority stake in Mopani Copper Mines earlier this year.
However, on Wednesday, IRH announced it was no longer pursuing the acquisition of a controlling interest in the Zambian assets. In a statement emailed to Reuters, the company cited “discrepancies in valuation” as the reason for terminating discussions two months prior.
Vedanta Seeks Funding to Revive Operations
Vedanta currently holds an 80% stake in KCM, with the remaining 20% owned by the Zambian government through ZCCM-IH. While Vedanta initially appeared open to selling a minority stake, negotiations reportedly stalled after the company sought nearly double what IRH offered for a 51% stake. This came despite Vedanta only being willing to sell around 30% of its ownership.
Vedanta regained control of KCM late last year after a lengthy legal battle with the Zambian government under former president Edgar Lungu. The company is now seeking to raise around $1.2 billion. These funds would be used to settle outstanding debts, revive operations at the mine, and invest in expanding the Konkola Deep Mining Project, a site known for its substantial copper reserves.
“Vedanta remains committed to exploring all funding options – both debt and equity – which are aligned with what we believe is in the best interests of KCM,” a company spokesperson said. The spokesperson declined to comment on any ongoing discussions with potential partners.
Geopolitical Scramble for African Copper
The failed deal underscores the growing interest in African copper resources from countries like the United Arab Emirates and Saudi Arabia. These nations are actively seeking to secure a stable supply of critical metals needed for the transition to green energy. Zambia, with its vast copper reserves, is a strategic target in this global race for resources.
The collapse of the IRH-Vedanta talks also raises questions about the future ownership structure of KCM. While Vedanta appears likely to retain control for now, the company may still explore alternative funding options, potentially including renewed talks with other investors or a public offering.
Source: Mining.com
