VEDANTA is considering spending a further $700m to $800m developing South Africa’s zinc industry following an announcement it was investigating building a refinery at Gamsberg, a development that could turn the country’s Northern Cape province into one of the world’s largest integrated producers of the metal.
The group, which said on April 14 it intended to hire AngloGold Ashanti’s Srinivasan Venkatakrishnan as its new CEO from September, said the smelter would be sited at the firm’s Gamsberg property and could potentially turn out 250,000 tonnes of finished zinc metal if the feasibility study stacked up.
The potential investment supports comments by Anil Agarwal, executive chairman of Vedanta, that southern Africa was highly prospective. The Gamsberg project, as well as the in-operation Skorpion Zinc in Namibia, and the Lisheen mine in Ireland, were bought for $1.34bn by Vedanta from Anglo American in 2010 – the firm in which Agarwal has since amassed a stake worth 20% voting rights.
“As the entire Gasmberg project has been developed in a modular fashion, so the Smelter-Refinery Complex could also be expanded to align with Gamsberg Phases 2 and 3,” the company said in an announcement today. The development would create new jobs but it needs 200MW in electricity supply and additional water – elements of the project that would trigger fresh investment in the region, it said.
Vedanta had previously kicked around the development of an integrated refinery-smelter at Gamsberg when, in 2014 it first unveiled plans to build the Gamsberg mine. In that announcement, Vedanta said it would establish an open pit mine at Gamsberg producing 250,000 tonnes/year of zinc, and convert a refinery at the site of Skorpion.
Vedanta said there was potential to convert the 150,000 tonnes a year refinery to co-treat sulphide and oxide concentrates from Gamsberg and other sulphide concentrate raw materials from nearby. “Should these projects proceed, this Southern African Zinc Cluster has the potential to be one of the world’s largest zinc supply regions,” it said.
The first phase of the $400m Gamsberg mine was “… well-underway,” said Vedanta with first production scheduled for mid-2018. Full production is expected to be reached in nine to 12 months. The first phase has a life of mine of 13 years, producing an expected four million tonnes from the open pit mine, and 250,000 tonnes annually from the concentrator plant. To date around 60 million tonnes of waste has been removed.
On April 12, Agarwal told a conference in Zambia that the firm would take spending in that country to $1bn following a decision add $700m worth of new copper production from its Konkola Copper Mines in which Zambia’s ZCCM-IH holds a 20.6% shareholding. He also reiterated his interest in Anglo and its exposure to southern Africa.
“Anglo is very much a part of South Africa and they should be proud to remain in South Africa,” he said. “I am happy that they have changed their mind about selling all their assets in South Africa. All this, I am sure, is because investor confidence has picked up in the wake of President Cyril Ramaphosa’s election,” he said.
