Vedanta raises USD 250 million to settle Zambian copper mine debts, plans to sell 30% stake: Report

Vedanta raises USD 250 million to settle Zambian copper mine debts, plans to sell 30% stake: Report (Image: Reuters)

MINT | July 6, 2024 | 11:02 PM IST | Breaking News | Follow on Google News

Vedanta raises USD 250 million to settle Zambian copper mine debts, plans to sell 30% stake: Report

Vedanta raises USD 250 million to settle Zambian copper mine debts, plans to sell 30% stake: Report

Vedanta Resources, the holding company of the Indian metals manufacturer Vedanta Limited announced on Friday, July 5th that the company has arranged the finances it needs to start paying off the creditors of its Zambian copper mine – Konkola Copper Mines (KCM), as they take steps to take back control of its assets, reported Reuters citing a company statement.

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Billionaire Anil Agarwal-led Vedanta Resources will have nearly $250 million which it needs to pay off the creditors in Zambia on or around July 8th, the company said in the statement as per Reuters.

The mining company needs to settle its debts which are owed by the Zambian mine as a part of the deal made with the government authorities in the country after it regained control of the copper mines and smelter.

Vedanta regained control of the Zambian mine late last year after a five-year-long battle to recover the copper mine and smelter which were seized by the government authorities under President Edgar Lungu, alleging that the company failed to invest in copper production expansions.

The company also announced a 20 per cent increase in workers’ salaries and a one-time payment of 2,500 Zambian Kwacha, approximately $102 to every worker, reported Reuters.

Vedanta still needs to raise additional capital of $1 billion to revive the mining operations and invest in the Konkola Deep Mining Project, which has one of the richest reserves of copper element in the world.

The company was committed to exploring all funding options, including through debt or selling a stake in the copper assets, reported Reuters quoting a company spokesperson. Discussions to sell a stake in KMC to the United Arab Emirates International Resources Holding (IRH) failed after both parties were unsuccessful in agreeing on the asset valuation.

Vedanta holds an 80 per cent stake in the Konkola Copper Mines and said it may sell 30 per cent of its holdings to raise capital to invest back into increasing the copper production. The remaining stake of 20 per cent in the mine is owned by the Zambian government through a state-owned firm ZCCM-IH.

Mint reported in March 2024 that Vedanta Resources is planning to deleverage as much as $3 billion in debt over the coming three years, according to a senior official at an analyst meeting.

MINT