Vedanta Resources PLC
04 August 2005
Vedanta Resources announces $700 million of new growth projects
Initiating the next phase of expansion - Zinc in India and Copper in Zambia
The board of Vedanta Resources plc ('Vedanta') has approved two new capital
projects, maintaining Vedanta's unique growth profile.
•$300m 170,000 tpa zinc expansion at Chanderiya due in early 2008
•$400m deep mining project at Konkola due in2009
•Attractive returns at conservative price assumptions
In response to rising Indian and global demand, a second 170,000 tpa smelter
will be built at Chanderiya, identical to the smelter recently commissioned at
Chanderiya on schedule and under budget. Construction will commence in early
2006. The expansion, at a budget of $300m, will include investment in a further
77 MW of capacity at the existing thermal power plant. The internal resources of
Hindustan Zinc Limited ('HZL') are sufficient to finance the project. The
expansion will further improve Vedanta's already globally competitive cost
position and increase total capacity to around 570,000 tpa.
Separately, the board has approved the Konkola Deep Mining Project ('KDMP'),
which will substantially increase output from the Konkola Copper Mines ('KCM')
and extend the existing mine life. This project realizes the potential of one of
the world's most important copper deposits, with 215 million tonnes of resources
at 3.8% copper, and will sustain the viability of the Zambian copper industry.
Copper output at the mine will be brought up from 2 million tpa to 6 million
tpa. All government approvals for KDMP have been received. The project is due
for completion in late 2009, with some production ramping up over the preceding
years, and will include the sinking of a new shaft and construction of an
additional 3 million tpa concentrator, at a budget of $400m. The KDMP project
will be financed substantially from the internal cash generation of KCM,
supplemented with debt as required. With other initiatives this will take total
finished copper capacity at KCM to 350,000 tpa and the combined capacity of the
group to over 650,000 tpa.
Anil Agarwal, Chairman of Vedanta said
'These major capital projects begin the second stage of our expansion programme
and reinforce our unique growth profile. We have already demonstrated that we
can deliver major value creating projects. With this further expansion of our
zinc production and major new initiative in Zambia, we are delivering
unparalleled growth, further driving down costs and generating superior returns
for our shareholders. We are pursuing further high quality, low cost, value
added projects and I look forward to updating the market on this exciting new
phase in our development.'
For further information please contact:
John Smelt, Head of Investor Relations Tel: +44 20 7659 4734
Vedanta Resources plc +44 787 964 2675
Robin Walker Tel: +44 20 7251 3801
Notes to Editors
Vedanta is a London listed diversified metals and mining group. Our principal
operations are located throughout India, with further operations in Zambia and
Australia. The major metals produced are aluminium, copper, zinc and lead.
The zinc facilities are principally based in Rajasthan, in North West India, and
are operated by Hindustan Zinc Limited, which is 65% owned by the Vedanta group.
The first expansion project involved construction of a 170,000 tpa
hydro-metallurgical smelter with a 154 MW coal based thermal captive power plant
and expanding the capacity of the Rampura Agucha operation from 2.3 Mtpa to
3.75 Mtpa. It was delivered on time and within budget in June 2005.
Current capacity for finished metal is around 400,000 tpa.
KCM is the largest mining company in Zambia, contributing significantly to the
nation's economy and the country's export earnings. KCM's assets consist of
three mines, a leaching plant and a smelter. Vedanta acquired a controlling
stake of 51% in KCM in August 2004. Current output of finished copper at KCM is
around 180,000 tpa.
This information is provided by RNS
The company news service from the London Stock Exchange