ABU DHABI’S International Resources Holding (IRH), the mining investment arm of the UAE’s International Holding Company, is poised to bolster its foothold in the African copper mining sector by eyeing a majority stake in Vedanta Resources’ Zambian copper assets, according to sources familiar with the matter, as reported by Reuters.
Sources revealed that IRH has extended an offer exceeding $1bn to acquire a 51 percent stake in Konkola Copper Mines (KCM), owned by Indian billionaire Anil Agarwal’s Vedanta. This strategic move underscores IRH’s ambition to establish an African copper mining empire following its recent acquisition of a majority stake in Mopani Copper Mines for $1.1bn.
IRH’s expansion spree in Zambia aligns with the broader objective of oil-rich United Arab Emirates (UAE) and Saudi Arabia to secure critical metal supplies from Africa, positioning themselves to participate in the global transition to green energy.
While the offer for a controlling stake remains non-binding, discussions between IRH and Vedanta are ongoing. However, Vedanta, eager to revive KCM’s assets, may hesitate to relinquish majority control, given its long-standing aspiration to retain the assets on its balance sheet.
Responding to inquiries, IRH emphasised its strategic commitment to expanding its presence in the copper mining sector, refraining from commenting on ongoing negotiations. Vedanta, in its bid to streamline operations and raise capital, has engaged Standard Chartered to oversee the sale process, aiming to attract prospective partners for short-term and long-term financing to bolster operations.
Vedanta’s journey in Zambia has been marred by legal battles and operational challenges, including an ownership dispute with the Zambian government in 2019, which disrupted operations and depleted fresh capital inflows. However, with plans to invest approximately $1bn over the next five years, Vedanta aims to revitalise the assets, particularly the Konkola Deep Mining Project, housing one of the world’s richest copper deposits.
As copper prices rally, investor interest in Vedanta’s assets is anticipated to surge, although concerns persist regarding operational hurdles, such as groundwater removal at the Konkola Deep underground operation. Despite the challenges, Vedanta remains open to various investment propositions, signalling a potential shift in the dynamics of Zambia’s copper mining landscape.