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International Resources Holding (IRH), the mining investment arm of the United Arab Emirates’ richest company, is reportedly among the investors holding talks on buying into Vedanta Resources’ Zambian copper assets.
IRH, a unit of Abu Dhabi’s International Holding Company, which holds about $244 billion in assets, is said to be interested in acquiring a stake in Konkola Copper Mines (KCM) and is conducting due diligence on the assets, according to Chris Griffith, Vedanta’s chief executive for base metals.
This information was reported by Mining Weekly, quoting Reuters, and seen by Zambia Monitor on Thursday.
IRH did not immediately respond to emailed questions, but it told Reuters in April that it was interested in the KCM assets and was “deeply committed” to expanding its presence in copper mining.
The KCM assets have also attracted interest from other investors, Griffith told Reuters on the sidelines of a mining conference in London, declining to provide names.
Vedanta, owned by Indian billionaire Anil Agarwal, wants to sell a stake in the copper mines to raise about $1.2 billion required to revive operations and boost copper output.
Vedanta waged a five-year battle to recover the copper mines and smelter that were seized by Zambia’s previous administration under former president Edgar Lungu after it accused the company of failing to invest in expanding copper production.
The miner owns an 80 percent stake in KCM, with Zambia’s state firm ZCCM-IH holding the balance.
IRH has been in discussions with us and has been part of the data-room process,” Griffith said.
He noted the company wanted “a little bit more than just up to 30 percent,” but believed negotiation was possible.
IRH offered to buy a 51 percent stake in the KCM assets for more than $1 billion, Reuters reported in April, citing sources.
The Abu Dhabi company wants to build up its copper mining business in Zambia after buying a 51 percent stake in Mopani Copper Mines in a deal worth $1.1 billion.
Griffith said other long-term investors were also exploring the potential to invest in the KCM assets.
“We’ve allowed that process to happen in parallel,” Griffith said. “So we’ve advanced down the road with a number of partners already that are in the process of doing their due diligence.”
Vedanta is seeking to gradually invest in increasing copper output at the Konkola mines over the next five years, Griffith said.
The company is close to securing an additional $270 million needed to pay off outstanding KCM creditors and meet social commitments.
Although Vedanta wants to sell a stake in KCM, it intends to retain majority shareholding.
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