Indian billionaire and businessman Anil Agarwal has made a significant pledge to help Zambia pay off $250 million debt.
Agarwal, the founder and chairman of mining company Vedanta Resources, has promised to pay the debt owed to suppliers as soon as he regains control of the copper mines that were seized by the Zambian government over four years ago.
This move comes after Vedanta’s Konkola Copper Mines was placed under provisional liquidation in 2019 during the administration of former President Edgar Lungu.
The government accused Vedanta of providing false information about expansion plans and insufficient tax payments. These accusations led to a series of legal proceedings, ultimately resulting in the current President Hakainde Hichilema‘s attempt to resolve the dispute amicably.
Agarwal’s commitment to paying off the debt is part of his larger goal to reduce the substantial debt burden of Vedanta Resources.
In addition to settling the debt, he has also pledged to inject $1 billion into Konkola Copper Mines and double copper production from the operation.This is a crucial move for the industry, as Zambia’s projected copper output for 2023 is expected to be the lowest in 14 years. With the increasing demand for copper driven by the shift towards clean energy, fresh investments are urgently needed.
Agarwal stressed that his strategy to settle all creditors’ claims is driven by a desire to “win the hearts of the people.” In an interview at Bloomberg’s Johannesburg office, he stated, “Money will never be a constraint.” This commitment showcases his determination to prioritise the well-being of the Zambian people and to revitalise the country’s copper mining industry.
By increasing production at the mine, Zambia will be able to boost its tax revenues. This is crucial for the nation, as it heavily depends on copper for approximately 70 percent of its export earnings.
Konkola operates multiple shafts, a smelter, and a refinery. Currently, it produces around 50,000 metric tonnes of refined copper from its own mines. In comparison, First Quantum Minerals Ltd.’s copper mines in the country yielded 390,000 tonnes the previous year.
In Southern Africa, Vedanta Resources engages in the production of copper, aluminium, and zinc across different countries.
Vedanta Resources currently faces a significant debt load, with approximately $2 billion in bonds maturing in 2024. This includes a record annual payment of $1.1 billion due in January.
Agarwal’s promise to settle Zambia’s debt is a step towards alleviating some of Vedanta’s financial burdens and securing the company’s future stability.