| The Anil Agarwal-promoted Vedanta Resources, a London-listed metals and mining group, plans to double its copper smelting capacity at Zambia’s Konkola Copper Mines (KCM) to 400,000 tonne per annum.
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| The company has also chalked up plans to start the Konkola Deep Mining Project (KDMP) to improve its ability to extract high grade copper from the mines.
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| A spokesperson for the company confirmed the development on KDMP but refused to comment on the doubling of capacity at KCM. But another executive maintained that “increasing capacity is a corollary to the KDMP”.
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| According to the official, KDMP, which has been under consideration for a long time, will involve one new shaft to be sunk from surface to 1500m depth for ore and waste hoisting. A new ventilation shaft will be also sunk from surface to 660m depth. The existing shaft will be deepened from 1,070 m to 1,500 m depth for services.
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| “The investment for the project is estimated to be between $0.5-0.7 billion “, said the official.
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| Vedanta acquired a 51 per cent stake in Zambia’s largest mine, KCM, in November 2004 for a cash consideration of $48.2 million, after South Africa’s Anglo American Corporation pulled out of the venture, citing rising operation costs.
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| KCM’s main business is copper mining, but it also has a pyrite mine and contract manages a smelting and refinery operation.
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| KCM has four main locations in Zambia: Chingola (Nchanga mine), Chililabombwe (Konkola mine), Nampundwe mines, and the ZCCM Smelter/refinery in Kitwe. At present, KCM has roughly 10,500 employees and 2,600 contract employees.
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| In 2002, weak copper prices drove Anglo to decide against further investment in the Konkola Deep Mining and finally lead to a majority stake being sold to Vedanta. As a result, Vedanta became the fifth largest producer of refined copper in the world.
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| “The copper available in the region is of high grade and with copper prices set to rise in nearby future, this investment will be good for the company”, says a Mumbai based analyst who has been analysing Vedanta stock’s for quite some time.
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| Many analysts believe that copper prices are headed for a rise as the mine development stalls. Early this May, Vedanta had commissioned a new facility in Tuticorin with a production capacity of 300,000 tonne per year.
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| The company has a domestic market share of some 40 per cent of copper sales. |
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