Viceroy Research calls Vedanta Zinc International assets 'scrapheap'

Vedanta defends Skorpion Zinc as key African unit, says it is undergoing structured evaluation

Vedanta Zinc International — part of Vedanta Resources — is holding “worthless” overseas assets whose loans are secured against its stake in Hindustan Zinc (HZL), according to a report by Viceroy Research. The short-seller warned that liabilities from its idled Skorpion Zinc complex in Namibia remain unaccounted for.

 

The Skorpion Mine & Smelter (Skorpion Complex), once touted as a pillar of Vedanta’s African operations, has been shut since a wall collapse in 2020. It is now a “scrapheap” with no industrial power, missing equipment, and no sign of restart activity, Viceroy said on Monday.

 

Although carried on Vedanta’s books at about $70 million, the site is “functionally beyond economic recovery” and requires rehabilitation, for which no adequate provision has been made, the report said. “While the Skorpion Complex itself is held on-book at a nominal $70 million valuation, it supports a $1 billion valuation of Skorpion’s sister mine — Black Mountain/Gamsberg,” Viceroy added. 

 

 

Rejecting the allegations, a spokesperson for Vedanta said the Skorpion Zinc Mine was acquired in 2010, when its remaining life was estimated at just four years. “Through sustained investment, rigorous exploration, and advanced geological analysis, Vedanta successfully operated the mine for a full decade, until 2020. That year, the mine was placed under care and maintenance — a strategic pause to chart a sustainable path forward. Skorpion is currently undergoing a structured, technically supported evaluation and exploration aimed at restart. Multiple bankable feasibility studies have been completed for various projects. Skorpion Zinc remains one of Africa’s most significant and strategic zinc assets, and the company is fully committed to the project,” the spokesperson said.

 

According to Viceroy, Zinc International’s debts are cross-guaranteed with other Vedanta assets, and financing for the African operations is secured against the group’s shares in HZL, potentially putting Vedanta’s crown jewel in India at risk if the overseas operations default.

 

Vedanta has allocated just $16 million for Skorpion’s cleanup — far short of the hundreds of millions of dollars typically needed for such mine closures — and is likely to place the asset into liquidation once inventories are sold, Viceroy alleged. The mine’s environmental liabilities, including lead contamination in the nearby town of Rosh Pinah in southern Namibia, remain unresolved.

 

The report also cast doubt on Vedanta’s plans to retrofit the Skorpion smelter to process ore from its Black Mountain mine in South Africa, saying the conversion would require a full rebuild, new power arrangements, and road infrastructure that does not exist.

 

“Viceroy’s visit to Skorpion enforces our belief that the asset is completely worthless. Management’s plans to restart the mine and convert the smelter are pure fiction,” it said.