Vedanta Unveils New Plans … As Skorpion reaches end of life

 

Windhoek – Vedanta Resources Plc, the London-listed Indian metals group, has confirmed that it will shut down mining operations at Skorpion zinc mine in 2017, after exhausting the oxide ore body.

This puts paid to years of speculation regarding Skorpion mine, a producer of 150 000 tonnes of special high-grade zinc’s future.

Initially owned by Anglo American Plc, Skorpion would have wound down operations this year, but Vedanta managed to prolong the mine’s closure, despite falling grades and production.

“Skorpion has a limited life of mine, it has always been a challenge how to extend mining operations as the oxide ore body comes to an end,” Kishore Kumar, chief executive officer of Vedanta Zinc International said. “Mining operations will carry on until sometime in 2017, that year seems to be the life for Skorpion,” Kumar said.

“We will have a painful process of exiting some of the employees while some of them would be accommodated in our global operations. There is some talent we are keen to use on our operations across the globe. We will facilitate a job relocation process,” Kumar said, but dodged questions on the specific number of employees who would be affected by the closure.

Vedanta plans to process zinc concentrates from its planned mine, Gamsberg mine, in South Africa’s Northern Cape province, and refine it at the Skorpion plant, which is now being converted to enable it to treat zinc sulphides.

Vedanta will ship 60 percent of output from Gamsberg mine in South Africa to Skorpion zinc refinery, originally designed to handle zinc oxides and is now being converted to treat sulphides, Kumar said in an interview.

Vedanta will haul material by road from Gamsberg ‑ its planned greenfield mine, to Skorpion refinery, in southern Namibia, Kumar said. Zinc ingots from Skorpion are shipped via Namibia’s southern port of Lüderitz, using an existing railway line, a traditional export route for miners situated in Namibia’s southern parts.

“About 60 percent of zinc sulphides for the refinery will come from Gamsberg,” Kumar said. “We would also like to beneficiate concentrates from the global market, including Gamsberg,” he added.

Vedanta also plans to handle sulphides from Glencore Xstrata owned Rosh Pinah zinc and lead mine, whose operations are adjacent to its Skorpion operation. “All the local zinc sulphide concentrates could be treated at our refinery,” Kumar said.

This would establish Namibia as a zinc producing hub, an ideal which has the backing of the Namibian government, Kumar added.

Vedanta is investing US$152 million to convert the refinery at Skorpion mine and construction work will start mid-2015.

Converting the refinery is a face saver for Vedanta which paid Anglo American Plc US$707 million for Skorpion mine, together with a suite of zinc assets including a 74 percent stake in Black Mountain Mine, owner of the Gamsberg deposit and Lisheen zinc mine in Ireland, in 2010.

Vedanta is pumping US$630 million building the Gamsberg mine, an open pit operation it expects to start producing about 250 000 tonnes of zinc in 2018, amid strong demand for the metal, used to galvanise steel.

November 2014
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