(Bloomberg) -- Vedanta Resources Plc is considering spending as much as $800 million on building a zinc smelter in South Africa to process metal from the nearby Gamsberg mine that's set to start up this year.
Indian billionaire Anil Agarwal's company has started a feasibility study for the smelting and refining facility, which would have an initial capacity of 250,000 metric tons a year, Vedanta's zinc unit said in a statement Wednesday. The zinc smelter would be South Africa's first since Exxaro Resources Ltd. shut down its unprofitable plant in 2011 after failing to find a buyer.
Agrarwal, who's also mining giant Anglo American Plc's top shareholder, has been upbeat about investing in South Africa even as mining capital dries up due to regulatory uncertainties. He's called the continent “tomorrow's rising sun,” and the feasibility study also includes looking at converting the Skorpion zinc refinery in southern Namibia to co-treat some sulphide concentrates from Gamsberg.
“The establishment of the proposed beneficiation plant will make Gamsberg a fully integrated zinc production site, with the mine, concentrator and smelter-refinery complex at a single location, making it the first integrated zinc manufacturing facility in South Africa,” Vedanta said in the statement.
The company could spend between $700 million and $800 million on the Gamsberg refinery in the Northern Cape province, it said.
Vedanta, the largest integrated zinc producer after Glencore Plc, said initial production at Gamsberg mine, where it has invested $400 million so far, will start mid-year and ramp up to around 250,000 tons of zinc concentrate in 12 months.
To contact the reporter on this story: Felix Njini in Nairobi at fnjini@bloomberg.net.
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin, Liezel Hill
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