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President cuts the ribbon on Vedanta’s Gamsberg zinc mine in South Africa

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South Africa President, Cyril Ramaphosa, has officially opened Vedanta Zinc International’s (VZI) Gamsberg mine, outside Aggeneys in the Northern Cape Province.

Ramaphosa was joined by Minister of Mineral Resources, Gwede Mantashe, Northern Cape Premier, Sylvia Lucas, and hosted by Vedanta Chairman, Anil Agarwal, Vedanta CEO, Srinivasan Venkatakrishnan, and VZI CEO, Deshnee Naidoo, at the ceremony.

The Gamsberg zinc resource, though discovered more than 40 years ago, had been held undeveloped in the portfolios of various South Africa mining companies until Vedanta acquired it in 2011, as part of the Black Mountain Mining complex. Vedanta gave the project the go-ahead in 2014, and the first blast occurred in mid-2015, eight months later. Gamsberg has a reserve and resource of more than 214 Mt with a grade of 6-6.5% Zn and an estimated life of mine (LoM) of 30-plus years.

Phase 1 of Gamsberg, celebrated today, represents a $400 million investment by Vedanta in South Africa. It has a LoM of 13 years and will see 4 Mt/y of ore produced from the open pit and 250,000 t/y of concentrate from its concentrator plant.

Investigations into Phase 2 and 3 are underway and will see production of zinc-in-concentrate increase to 450,000 t/y, and in a modular fashion ultimately, to 600,000 t/y. It will reflect an additional investment of $350-$400 million.

Vedanta is simultaneously pursuing a feasibility study into the development and construction of a smelter-refinery complex, it said.

Vedanta’s CEO, Srinivasan Venkatakrishnan, said: “More than 90% of our $400 million investment at Gamsberg has been spent in South Africa. Our expenditure with local enterprises was around R77.5 million ($5.5 million) in 2018, while we invested more than R44.6 million in 2018 on training and social projects aimed at skills development, education, health, enterprise development and municipal infrastructure support. And this was before the mine had made a single cent.”

Delivering the keynote address, Cyril Ramaphosa, said: “The Vedanta Gamsberg project is an important step in our shared journey to revive our mining industry. It confirms our view that with an effective regulatory framework, improved collaboration between all stakeholders and sustained investment, mining has the potential to be a sunrise industry. South Africa has vast undeveloped mineral deposits that we have the opportunity to exploit for the benefit of all the people of this country.”

Gamsberg is one of the most digitally advanced greenfield mining projects in South Africa, according to Vedanta. Digitalisation at Gamsberg includes Smart Ore Movement, Spatial Risk Monitoring and Management and Collision Avoidance Systems.

Anil Agarwal’s Volcan looks to cut Vedanta’s London ties next month

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Vedanta Resources looks to be only a month away from leaving the London market after the revised conditions for Volcan Investments takeover of the company were met.

Volcan Investments, the majority owner of Vedanta with a 66.5% stake, has now made its £8.25/share ($10.65/share) bid unconditional after it received acceptances for its offer from shareholders representing more than 75% of outstanding stock.

“The offer is being extended and will remain open for acceptances until further notice,” Volcan said on September 3.

The company said in it is initial July 2 offer announcement that it planned to delist Vedanta from the London markets. Following the latest declaration, it expects this to take place on October 1, 20 business days from the latest announcement.

Volcan says the delisting and takeover transaction, which values the company at £2.33 billion, would be “another important step in simplifying the structure of the Vedanta Group”. It would leave the company with a listing in India, which it says provides ample opportunities for existing shareholders to trade shares.

Prior to this transaction, the company had merged Vedanta with energy subsidiary Cairn India to try to simplify the corporate structure and achieve an improved market valuation.

The company also said Volcan’s original aim with the 2003 London listing – to “provide a platform to access a deeper pool of equity and debt capital in the United Kingdom and global markets” – was now “less compelling, given the increased maturity of the Indian capital markets, together with Vedanta Limited’s significant growth”.

The Gamsberg zinc project, in the Northern Cape of South Africa, is part of this growth. The mine is expected to move into commercial production this month on its way to ramping up to 250,000 t/y of zinc concentrate output.

As of 13:00 (London time) on August 31, Volcan had received valid acceptances of the offer in respect of 72.73 million Vedanta shares, representing approximately 25.8% of Vedanta Resources and some 77.04% of the Vedanta shares to which the offer relates.

Vedanta is not the only London-listed company to count Volcan Investments as an investor. The firm, which is majority owned by Indian business entrepreneur Anil Agarwal, also holds close to 20% of Anglo American.