CAPE TOWN (Reuters) - Indian mining company Vedanta Resources is urgently trying to overcome technical issues at its Zambian copper operations that it says have the potential to produce the metal for another 50 years.
The mining industry as a whole has been frustrated by a lack of available high-quality copper assets at time demand for the metal is predicted to rise and Vedanta is wrestling with the need to remove large amounts of water, amongst other issues.
“We’re all here working with an element of urgency to find a solution. We’re committed to Zambia. We want to invest,” Vedanta Chief Executive Tom Albanese told Reuters at an annual mining conference in Cape Town.
“I continue to believe there’s a 50-year vision for our Zambian copper operations. We have invested billions of dollars,” Albanese said.
The Vedanta chief said he had used the Cape Town event to meet Zambian officials and the industry’s best engineers because a lack of alternative copper assets made it imperative to exploit the company’s existing deposits.
Vedanta has a majority stake in Konkola Copper Mines (KCM), which Albanese said was “one of the largest copper deposits still to be mined at one of the highest grades”.
Vedanta has also faced legal and regulatory issues in the southern African country. Last year, the Zambian government proposed an import duty on copper concentrate imports to be smelted in Zambia, but decided against it.
“It was recognised it was a proposal that would only be at the expense of the copper producers in Zambia and ultimately refined copper exports from Zambia,” Albanese said.
Vedanta has three smelters in Zambia, Africa’s second biggest copper producer, and the import duty was expected to disrupt the supply of copper concentrate from neighbouring Democratic Republic of Congo.
A $100 million payment to the Zambian government ordered by an English court over outstanding payments from a 2013 agreement had also been dealt with, he said. Konkola Copper Mines paid $20 million in January, will pay $22 million in February and the balance in instalments over the next 24 months.
A legal battle over whether an English court has jurisdiction to decide a claim on behalf of Zambian villagers seeking compensation for what they say is damage to their health and land by KCM is unresolved.
Vedanta has appealed, saying Zambia is the appropriate jurisdiction, and expects to know the outcome this year. Albanese said he had no news on the case.
Vedanta is also expanding in the two other African countries. In South Africa, it is developing the Gamsberg zinc mine, which it began last year with a capital investment of $400 million and the aim of producing the first ore in mid 2018.
It is also seeking to extend its Skorpion zinc mine in Namibia via an underground development as the existing reserve is expected to be exhausted by 2020.
Editing by David Clarke