Vedanta should buy parent’s African copper biz: Agarwal
Vedanta Ltd acquire Konkola Copper Mines from parent Vedanta Resources Ltd, which has regained control of one of the world’s largest copper mines from the Zambian government. After Agarwal, the Vedanta Group chair, in an uncharacteristic move, shared his views, many proxy advisory firms and investors raised questions on the group’s intention to potentially use the proposed transaction to repay its rising debt.
On Tuesday, Agarwal’s post on X said: “The return of Konkola Copper Mines (KCM) to Vedanta Resources comes at a perfect time! It has one of the largest reserves of copper and cobalt in the world, important in energy transition…Going forward, my thought is that we must maximize the synergies between KCM and Vedanta Ltd’s refining/smelter businesses in the UAE and India. KCM can be moved from Vedanta Resources to Vedanta Ltd at the right valuation." When contacted a company spokesperson refused to offer any clarification on whether the company had appointed an adviser for the proposed deal.
“There is nothing more to add, other than the shared information," he said. Experts said the rising debt challenges faced by UK-based Vedanta Resources may have prompted the owner to consider the deal.
“The debt servicing overhang on Vedanta Resources means promoter is trying to divest Konkola Copper Mine to Vedanta," Shriram Subramanian, the founder and managing director of InGovern Research Services, a proxy advisory firm, said. “Instead of selling it to a third party, he is looking at his listed entity to buy it because it could be done at a favourable valuation." Agarwal’s tweet come three weeks after a three-minute video he posted, which was submitted to the BSE on 25 August.
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