Now IRH offers $1bn for KCM stake

Washington DC
FOLLOWING the acquisition of a 51 percent stake in Mopani Copper Mines, the unit of International Holdings Company (IHC) of Dubai has submitted an unsolicited bid to acquire majority shareholding in Konkola Copper Mines (KCM).
Reuters reported on Friday that the mining investment arm of Abu Dhabi’s most valuable company has offered to buy a majority stake in KCM, which has been returned to Indian billionaire Anil Agarwal-owned Vedanta Resources.
The unit, International Resources Holding (IRH), is said to have recently made an offer of more than US$1 billion to buy a 51 percent stake in KCM.
IRH is racing to broaden its burgeoning copper mining business in Zambia after buying a 51 percent stake in Mopani in a deal worth US$1.1 billion.
“IRH said last month it planned to bid for a stake owned by EMR Capital in Lubambe Copper Mine, which is also for sale,” Reuters reported.
“The deals spree is part of a push by oil-rich United Arab Emirates (UAE) and Saudi Arabia to secure critical metal supplies from Africa, a move that could also help them participate in the transition to green energy.
“The IRH offer for a controlling stake is non-binding and talks are ongoing, one of the sources said.”
However, one of the sources said Vedanta might balk at giving up a majority interest in KCM as it has always wanted the assets on its balance sheet.
“IRH is deeply committed to strategically expanding its presence in the copper mining sector, exemplified by our interest in multiple assets,” IRH said in reply to a request for comment. However, it declined to comment on “ongoing discussions”.
Vedanta, which wants to sell part of its 80 percent stake in KCM, has hired Standard Chartered to manage the process in an effort to raise capital to revive the assets, which were nearly paralysed in an ownership dispute with the Zambian government that erupted in 2019 when the then-administration seized them.Government, through ZCCM-Investment Holdings, owns 20 percent of KCM.
StanChart issued a “request for proposals” seeking investors interested in buying a minority interest in KCM, the sources said.
“IRH is only interested in a controlling stake in KCM as there are no clear benefits in becoming a passive investor in the operations, the sources said, as they are not making money and need significant investment,” Reuters reported.
Vedanta, when asked for a comment, said StanChart was assisting in a “broader strategy to manage its capital structure and ensure the company has the funds necessary to meet its obligations and continue operations again.”
“As part of this process, we are engaging with prospective partners for both short-term financing and longer-term equity financing but cannot disclose the names of these partners or investors due to the sensitive stage these discussions have reached.”
Vedanta, which recently regained control of KCM, wants to raise about US$1 billion to invest in the assets over the next five years and an additional US$300 million to pay off outstanding local creditors, Chris Griffith, the CEO of Vedanta’s base metals unit, told Reuters in February.
It is believed much of the funding is required to advance the Konkola Deep Mining Project, an underground operation, which holds one of the world’s richest copper deposits…