Vedanta invests $600 million to double zinc production capacity in South Africa

Vedanta Ltd has invested nearly $600 million to double its annual zinc production capacity in South Africa to 500,000 tonnes, as the mining company looks to scale up output across India and South Africa to 3 million tonnes a year.

The expansion at the Gamsberg mine in South Africa’s Northern Cape province, undertaken under Phase II of the project through Vedanta Zinc International (VZI), was inaugurated by South African President Cyril Ramaphosa and Vedanta Ltd director Priya Agarwal-Hebbar on October 18. The company described the project as one of the largest mining investments in South Africa this decade.

The expansion is part of Vedanta’s broader plan to strengthen its position in the global zinc market. The company is targeting annual production of 3 million tonnes across its Indian and South African operations, with subsidiary Hindustan Zinc contributing 2 million tonnes and VZI aiming to produce 1 million tonnes annually.

Hindustan Zinc is the world’s largest integrated zinc producer, while Vedanta Ltd describes itself as the world’s largest zinc producer, including refined metal and metal-in-concentrate production.

Vedanta’s $1.5 billion South Africa commitment

The Gamsberg expansion forms part of Vedanta’s investment commitment of 21 billion South African rand, or nearly $1.5 billion, made at the 2018 South Africa Investment Conference. The latest investment also comes amid efforts to strengthen economic ties between India and South Africa.

At the 18th BRICS Summit in New Delhi last month, Ramaphosa called for increased Indian investment in key South African industries. Vedanta’s continued investment in the Northern Cape adds to this push, with the company seeking to develop the region into a larger zinc and industrial hub.

“We have come to celebrate an investment that has moved from commitment to construction, and from construction to production,” Ramaphosa said at the inauguration. He also welcomed Vedanta’s ambition to establish zinc smelting capacity in the Northern Cape, adding that the government must work with the company and other partners to address their requirements.

Agarwal-Hebbar said the project represented a long-term commitment to South Africa, building on the vision of Vedanta founder and chairman Anil Agarwal to turn the country’s mineral wealth into a foundation for industrial growth, jobs and opportunity.

“Our ambition is to build a globally significant zinc and industrial hub in the region, creating lasting value for the country and its people,” she said.

Focus on jobs and community development

Beyond expanding production, Vedanta has invested nearly $20 million in community initiatives in South Africa since acquiring VZI in 2011. These programmes cover healthcare, education, care centres, sports, livelihoods, infrastructure and social welfare, benefiting more than 32,000 people annually.

Earlier this year, VZI also opened an oncology centre in Namakwa, identified by the company as a priority community project. Zinc is widely used in construction, automotive manufacturing and infrastructure because galvanisation protects steel from corrosion and extends its service life.