4th Aug 2005 07:01
Vedanta Resources PLC04 August 2005 Vedanta Resources announces $700 million of new growth projects Initiating the next phase of expansion - Zinc in India and Copper in Zambia The board of Vedanta Resources plc ("Vedanta") has approved two new capitalprojects, maintaining Vedanta's unique growth profile. •$300m 170,000 tpa zinc expansion at Chanderiya due in early 2008 •$400m deep mining project at Konkola due in2009 •Attractive returns at conservative price assumptions In response to rising Indian and global demand, a second 170,000 tpa smelterwill be built at Chanderiya, identical to the smelter recently commissioned atChanderiya on schedule and under budget. Construction will commence in early2006. The expansion, at a budget of $300m, will include investment in a further77 MW of capacity at the existing thermal power plant. The internal resources ofHindustan Zinc Limited ("HZL") are sufficient to finance the project. Theexpansion will further improve Vedanta's already globally competitive costposition and increase total capacity to around 570,000 tpa. Separately, the board has approved the Konkola Deep Mining Project ("KDMP"),which will substantially increase output from the Konkola Copper Mines ("KCM")and extend the existing mine life. This project realizes the potential of one ofthe world's most important copper deposits, with 215 million tonnes of resourcesat 3.8% copper, and will sustain the viability of the Zambian copper industry.Copper output at the mine will be brought up from 2 million tpa to 6 milliontpa. All government approvals for KDMP have been received. The project is duefor completion in late 2009, with some production ramping up over the precedingyears, and will include the sinking of a new shaft and construction of anadditional 3 million tpa concentrator, at a budget of $400m. The KDMP projectwill be financed substantially from the internal cash generation of KCM,supplemented with debt as required. With other initiatives this will take totalfinished copper capacity at KCM to 350,000 tpa and the combined capacity of thegroup to over 650,000 tpa. Anil Agarwal, Chairman of Vedanta said "These major capital projects begin the second stage of our expansion programmeand reinforce our unique growth profile. We have already demonstrated that wecan deliver major value creating projects. With this further expansion of ourzinc production and major new initiative in Zambia, we are deliveringunparalleled growth, further driving down costs and generating superior returnsfor our shareholders. We are pursuing further high quality, low cost, valueadded projects and I look forward to updating the market on this exciting newphase in our development." For further information please contact: John Smelt, Head of Investor Relations Tel: +44 20 7659 4734Vedanta Resources plc +44 787 964 2675 Robin Walker Tel: +44 20 7251 3801Finsbury Notes to Editors Vedanta Vedanta is a London listed diversified metals and mining group. Our principaloperations are located throughout India, with further operations in Zambia andAustralia. The major metals produced are aluminium, copper, zinc and lead. Zinc The zinc facilities are principally based in Rajasthan, in North West India, andare operated by Hindustan Zinc Limited, which is 65% owned by the Vedanta group.The first expansion project involved construction of a 170,000 tpahydro-metallurgical smelter with a 154 MW coal based thermal captive power plantand expanding the capacity of the Rampura Agucha operation from 2.3 Mtpa to 3.75 Mtpa. It was delivered on time and within budget in June 2005. Current capacity for finished metal is around 400,000 tpa. Zambian Copper KCM is the largest mining company in Zambia, contributing significantly to thenation's economy and the country's export earnings. KCM's assets consist ofthree mines, a leaching plant and a smelter. Vedanta acquired a controllingstake of 51% in KCM in August 2004. Current output of finished copper at KCM isaround 180,000 tpa. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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