It is doubtful that Vedanta Resources would sell its full ownership in Konkola Copper Mines
Plans by UAE-based International Resources Holdings (IRH) to purchase a 51% share in Zambia’s Konkola Copper Mines (KCM) may not come to pass as Vedanta Resources (VRL) is hesitant to give up its controlling ownership in the company. Furthermore, a report by CreditSights suggests that the Anil Agarwal-led business may be hesitant to sell its controlling position in KCM, given the latter’s increasing operational visibility.
“Given its history of fiercely guarding its majority ownership in its businesses, we expect VRL will be very reluctant to give up its full control of KCM. VRL’s resistance to selling a majority ownership in KCM might also be increased by the company’s high-quality, large-ore reserves, enhanced operational visibility at KCM, and the ongoing growth in copper prices, according to the statement.
“We see a low probability for the deal to go through with IRH, considering IRH is reportedly only interested in acquiring a majority stake in KCM,” the statement said.
According to certain media sources, UAE-based IRH made a bid of more than $1 billion to purchase a 51% share in VRL’s KCM. Previous rumors said that VRL had appointed Standard Chartered Bank to handle the sale of a portion of its 79.4% ownership in KCM.
According to the CreditSights assessment, “We are positively surprised by IRH’s large $1 billion offer for a 51% stake that well exceeded our expectations.”
A minority share sale in KCM is anticipated to be pursued by VRL, but the brokerage anticipates difficulties because of the company’s unfavorable operational circumstances, which may last for a further two to three years.
To meet its upcoming debt obligations in 2026–2028, CreditSights anticipates that VRL, together with its Indian subsidiary and mining giant Vedanta (VEDL), would keep looking to sell strategic stakes in important assets. These assets may include the sale of KCM’s minority investment in Electrosteel Steels, which may include the aluminum business, as well as the oil and gas company Cairn India.
The brokerage firm said that while VRL’s worst may be behind it, the London-based company will still need to raise $1.4 billion and $850 million in capital in the next two fiscal years.
