Vedanta stock in focus: Metal major doubles South Africa zinc capacity with $600 million investment

Vedanta Group’s flagship company Vedanta Ltd has doubled its annual zinc production capacity in South Africa to 500,000 tonnes after investing nearly $600 million in the second phase of its Gamsberg mine, the company said on Sunday, October 18.

South African President Cyril Ramaphosa and Vedanta Director Priya Agarwal-Hebbar inaugurated the expanded facility in the Northern Cape province. The project forms part of Vedanta’s broader investment commitment of 21 billion South African rand, or nearly $1.5 billion, announced at the 2018 South Africa Investment Conference.

Vedanta targets annual zinc production of 3 million tonnes

The expansion is a key step towards Vedanta’s goal of producing 3 million tonnes of zinc annually across India and South Africa.

Under this plan, Hindustan Zinc, Vedanta’s Indian subsidiary, aims to achieve annual production of 2 million tonnes, while Vedanta Zinc International is targeting an annual contribution of 1 million tonnes.

The additional capacity is expected to strengthen Vedanta’s ability to meet growing demand for zinc, a metal widely used in galvanisation to protect steel from corrosion. Zinc is an important raw material for the construction, automotive and manufacturing industries.

Welcoming the investment, South African President Cyril Ramaphosa said the project demonstrated how an investment commitment had progressed through construction to production. He also highlighted the potential for further industrial development, including establishing zinc smelting capacity in the Northern Cape, and called for continued cooperation between the government and Vedanta to address the company’s requirements.

Vedanta highlights commitment to local communities

Priya Agarwal-Hebbar, Director at Vedanta and Chairperson of Hindustan Zinc, said the second phase of the Gamsberg mine represented more than an expansion of the company’s zinc operations, describing it as a commitment to South Africa’s future.

She said Vedanta’s investment reflected the vision of its founder and chairman, Anil Agarwal, who believes the country’s mineral resources can serve as a foundation for industrial development, employment generation and economic opportunities.

Vedanta also highlighted its community development initiatives in South Africa. Since acquiring Vedanta Zinc International in 2011, the company has invested nearly $20 million in programmes spanning healthcare, education, livelihood development, infrastructure, sports and social welfare.

According to the company, these initiatives benefit more than 32,000 people annually, forming part of its broader efforts to support communities alongside the expansion of its mining operations.