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Zambia Copper (ZCI)

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Monday 23 August, 2004

Zambia Copper

Further re Press Release

Zambia Copper Investments Limited
(Registered in Bermuda)
ISIN: BMG988431240


The Board of Zambia Copper Investments Limited (ZCI) is pleased to announce
that terms have been reached for the introduction of Vedanta Resources plc
(Vedanta) as a strategic equity partner for Konkola Copper Mines plc (KCM).

Under the terms of the agreement Vedanta will subscribe for new KCM shares and
obtain a 51% interest in KCM.  In return, Vedanta will:

-    inject the subscription price of US$25 million as equity into KCM,
-    pay ZCI US$23.2 million as deferred consideration payable over 4 « years,
-    be obliged if the free cash flow of KCM is negative at any time during a
period of nine years after completion of the transaction, to fund any cash
shortfalls up to a cumulative amount of US$220 million

As a result of the subscription ZCI's stake in KCM will be reduced from 58% to
28.4% and ZCCM Investments Holdings plc's stake in KCM will be reduced from 48%
to 20.6%.

The transaction is subject to the approval of the shareholders of ZCI at a
general meeting of the shareholders of ZCI, which will be convened for this
purpose.  The notice of general meeting will be accompanied by a circular
informing shareholders of the details of the terms and the action required to be

Vedanta, which has also undertaken not to exit KCM prior to 1st January 2008,
has agreed to  be contribute towards a feasibility study on the extension of the
Konkola orebody to be completed by 31st December 2006 and will procure such
funding as would be necessary to carry out any orebody extension project agreed
to by the KCM board.

Commenting on the formal announcement of Terms, Mr. Barrie Ireton, Chairman of
ZCI, said today:

"The proposed subscription for new shares in KCM by Vedanta will considerably
strengthen the balance sheet of KCM and the payment of US$23.2 million directly
to ZCI will significantly improve ZCI's financial position.  The board is
currently considering how to best utilise the funds in order to develop the full
business potential of ZCI for the benefit of shareholders.

 "We have managed to secure a number of fundamental obligations from Vedanta,
our new strategic partner, which together with the provision of a US$220 million
standby cash shortfall facility will enable us secure a long term sustainable
and profitable future for KCM."

"This agreement which has been finalised after many months of careful
negotiation and which has been agreed to by the Government of the Republic of
Zambia represents an excellent outcome for ZCI shareholders".

Vedanta, an international metals and mining group, was selected as the preferred
bidder to become a strategic equity partner because it was able to satisfy two
key issues for KCM - the need for technical expertise and management experience,
and funding support to ensure financial stability. KCM will also be able to
benefit from Vedanta's marketing and procurement skills acquired through its
copper, zinc and aluminium operations in India and Australia.

By retaining a 28.4% stake, ZCI shareholders will be able to benefit from the
added value that Vedanta, which already has demonstrated its ability to
turnaround under performing assets can bring to the business.  This remaining
stake is subject to a call option agreement which may be exercised by Vedanta in
circumstances where the underlying value in KCM's future development potential
would be reflected fully in the exercise price

Upon Vedanta becoming the new controlling shareholder of KCM, the Government of
the Republic of Zambia has agreed the terms of a new development agreement with
KCM, which regulates the legal and fiscal framework under which KCM operates in

On completion of the Vedanta investment, it is intended that the Board of KCM
will be reconstituted so as to consist of five Vedanta appointed directors, two
ZCI appointed directors, two ZCCM-IH appointed directors and one GRZ appointed
directors (with limited voting rights).

  -    Ends -

For further information please contact:
Alan Mole on 44-(0)207-323-9857
John Kleynhans on 00- 352-402-5051

Note:  English and French versions of the 'Terms' announcement can  be  accessed
via the ZCI web site at under the heading of Press Releases.

August 23, 2004