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The battle for African copper has intensified, with the investment arm of Abu Dhabi’s IHC making a bold move for a controlling stake in Vedanta Resources’ prized Zambian copper assets, Konkola Copper Mines (KCM). This follows their recent acquisition of Mopani Copper Mines, painting a clear picture of their ambition to build a copper mining empire in Africa.
“IRH is deeply committed to strategically expanding its presence in the copper mining sector,” declared an IRH spokesperson, highlighting their aggressive approach. Their offer of over $1 billion for a controlling stake in KCM reflects this determination.
Vedanta, however, may not be so eager to relinquish control. Having recently regained KCM after a bitter legal dispute with the Zambian government, they seem keen to keep this strategic asset on their books. “Vedanta might balk at giving up a majority interest,” cautioned a source familiar with the negotiations.
This deal is part of a larger play by oil-rich Gulf nations like the UAE and Saudi Arabia to secure a steady supply of critical metals for their future. With the world transitioning towards green energy, copper is seen as a vital component, and Africa holds vast reserves of this precious resource.
Vedanta, facing the need to revive the near-paralyzed KCM operations after years of legal wrangling, is open to selling a stake. They have enlisted Standard Chartered to manage the process, seeking investors to raise capital for the asset’s revival.
“We are engaging with prospective partners for both short-term financing and longer-term equity financing,” Vedanta confirmed, refusing to disclose potential investors due to the sensitive nature of discussions.
The KCM saga has been a troubled one. The Zambian government’s 2019 seizure of the mines, accusing Vedanta of neglecting expansion plans, sparked a lengthy legal battle that starved the operations of investment. Vedanta, through arbitration and negotiation, has finally wrestled back control.
The road ahead won’t be easy. Vedanta needs an estimated $1 billion over five years to revive KCM, with a significant chunk earmarked for the Konkola Deep Mining Project, boasting some of the world’s richest copper deposits. An additional $300 million is needed to settle outstanding local debts.
Vedanta is exploring all options, open to selling either a minority or majority stake. The recent surge in copper prices is likely to attract investors, but the daunting task of removing groundwater from the Konkola Deep mine – a major challenge – could be a deterrent. As a source from a global miner who previously considered a deal with KCM remarked, “Investors may be unnerved by the tough conditions.”
The race for KCM is on, and the outcome will have a significant impact on the future of Zambia’s copper industry and the wider scramble for African resources.
