Vedanta Resources has announced that it has secured $250 million to start repaying creditors of its Konkola Copper Mines (KCM) in Zambia. This financial arrangement is a crucial step towards reviving operations after the company regained control of the assets.
The mining giant, owned by Indian billionaire Anil Agarwal, has confirmed that the funds will be available by July 8. The money will be used to pay off small creditors in Zambia as part of a deal struck with Zambian authorities following Vedanta’s reacquisition of KCM.
Vedanta regained control of KCM late last year after a prolonged five-year battle. The previous administration, led by former Zambian President Edgar Lungu, had seized the mines, accusing Vedanta of failing to invest adequately in expanding copper production.
In addition to settling debts, Vedanta committed to increasing KCM workers’ salaries by 20%. Employees will also receive a one-time payment of 2,500 Zambian Kwacha (about $102).
Despite securing $250 million, Vedanta still needs to raise an additional $1 billion. These funds are essential to revive mining operations and advance the Konkola Deep Mining Project, which holds some of the richest copper deposits in the world.
A Vedanta spokesperson told Reuters that the company is exploring various funding options, including debt and selling a stake in its copper assets. Previous negotiations to sell a stake in KCM to the United Arab Emirates’ International Resources Holding (IRH) fell through due to disagreements over asset valuation.
Vedanta owns 80% of KCM and is considering selling 30% of its holding to raise capital. The Zambian government holds the remaining 20% through the state firm ZCCM-IH.
Vedanta’s strategic move to secure funding and settle debts is seen as a critical step in stabilizing its operations in Zambia. By addressing financial obligations and investing in its workforce, the company aims to restore confidence among stakeholders and ensure the long-term sustainability of its mining operations.
Vedanta’s commitment to settling debts and enhancing worker benefits demonstrates its dedication to reviving KCM. As the company explores further funding options, its focus remains on boosting copper output and advancing key mining projects. This financial maneuvering marks a significant milestone in Vedanta’s efforts to regain and sustain control over its valuable Zambian assets.
Source: Mining Weekly
