Vedanta Resources Limited, a globally renowned mining conglomerate, has affirmed its ability to secure the necessary funds for revitalizing operations at Konkola Copper Mines (KCM). The company has expressed its commitment to invest an additional $1 billion into KCM for capital mine development, expansion, infrastructure upgrades, and other initiatives aimed at boosting production.
Masuzyo Ndhlovu, the Corporate Communications Director of Vedanta Zambia, assured stakeholders that Vedanta Resources remains resolute in creating value at KCM and uplifting the livelihoods of people in the region. In an interview with Phoenix News, Ndhlovu emphasized the company’s dedication to executing measurable and impactful corporate social responsibility programs.
Addressing concerns regarding the financial health of Vedanta Resources, Mr. Ndhlovu stated that the company is financially sound. He highlighted the company’s diversified portfolio, which spans across four continents and contributes to its financial stability. Vedanta Resources, under the leadership of Indian mining mogul Anil Agarwal, has been working towards reducing its debt burden and aims to become a “zero debt company.”
Agarwal, in a previous interview with the Financial Times, expressed confidence in Vedanta’s funding options and mentioned ongoing discussions with JPMorgan and other banks for a $1 billion loan. He stated that Indian banks and American funds have shown interest in financing Vedanta’s operations. The company had already secured a $400 million loan from Howard Marks’ Oaktree Capital Group in 2020.
Despite recent challenges faced by Vedanta Limited’s share price and increased yields on its bonds, Agarwal dismissed concerns about upcoming debt maturities, emphasizing the company’s robust cash flow and projected profits of $9 billion for the coming year. He downplayed the bond market fluctuations, attributing them to the “geopolitical situation” rather than Vedanta’s financial standing.
While credit analysts have acknowledged the recovery of the commodity cycle and its positive impact on Vedanta’s cash flow, they caution that refinancing debt may prove challenging in the current environment, potentially leading to increased financing costs for the company. JPMorgan, in a recent research note, deemed the current financial year as critical for Vedanta Resources, as it grapples with debt maturities and interest payments totaling $4.1 billion at the holding-company level.
Agarwal also addressed the proposed merger of Vedanta’s South African and Indian zinc mining assets, describing it as the “right thing to do.” The Indian government, which holds a 29.5 percent stake in Hindustan Zinc, opposed the plan due to concerns over a related party transaction and the perceived high price of the South African operation. Agarwal expressed his willingness to align with the government’s stance and continue discussions to find a mutually agreeable solution.