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Vedanta Zinc to spend R7bn on expanding its Gamsberg mine

VZI is the largest integrated zinc operation in Africa, with a vision to be a globally renowned brand in the base metals sector, and a 1Mt zinc producer. EPA/DAI KUROKAWA

VZI is the largest integrated zinc operation in Africa, with a vision to be a globally renowned brand in the base metals sector, and a 1Mt zinc producer. EPA/DAI KUROKAWA

Published Apr 4, 2022

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In a bid to double its production capacity, the Vedanta Zinc International (VZI) board has approved a R7 billion investment to expand the Gamsberg mine in the Northern Cape.

The investment is part of the company’s vision to produce “green metal”, the company said in a statement on Friday.

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VZI is the largest integrated zinc operation in Africa, with a vision to be a globally renowned brand in the base metals sector, and a 1Mt zinc producer.

According to VZI, the investment would enable the Gamsberg mine to double its annual ore capacity from 4 million tonnes to 8 million tonnes, and build another 4Mt concentrator plant to produce an additional 200 000 tonnes of zinc metal in concentrate.

“With this expansion, VZI will become the largest zinc producer in Africa, with an annual production of 500 000 tonnes of zinc metal in concentrate,” the company said.

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VZI chairman Anil Agarwal said the growth of the investment was pleasing.

“I look forward to seeing this flagship project come into production as soon as possible to make a significant socio-economic contribution to our host communities.

“This project will double up the current Gamsberg production and create thousands of jobs. We have witnessed unprecedented socio-economic benefits with the success of the Gamsberg phase I," Agarwal said.

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Since its official opening and inauguration by President Cyril Ramaphosa in 2019, the Gamsberg mine has been instrumental in creating employment opportunities and improving livelihoods, the company said.

“The Gamsberg mine has more than 1 200 permanent personnel. Gamsberg phase 2, a R7 billion investment, is set to create 1 500 to 2 000 jobs at its peak during the construction phase and will create 800 to 1 000 permanent jobs during operations,” VZI said.

VZI executive director and chief financial officer, Pushpender Singla, said: “This investment approval indicates VZI’s commitment to keeping growing, even amid a pandemic that has halted majority growth investments and threatened the survival of companies across various industries.”

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Singla said the investment was a sign of the company to partner with the Northern Cape government.

“It also serves as the beginning of new opportunities with some of the local businesses and a continuation of partnerships with other small companies in the province.

“In addition, this project will form part of the Namakwa Special Economic Zone, which is set to contribute and grow secondary industries,” Singla said.

In July 2021, VZI announced an investment of R600 million in the company’s magnetite project. The project is set to recover iron ore (magnetite) from the Black Mountain Mining (BMM) tailings to significantly reduce tailings disposal up to 1Mt.

“This process will produce high-quality magnetite with of Fe grade of 65 percent. The first production is expected in September of 2022. This project will create 360 jobs during construction, and 250 permanent jobs,” said Singla.

These investments will also see VZI’s “Business with Purpose” model unlock new community projects that will enable the mine to invest in better education, health, and skills development programmes in the Northern Cape, the company said.

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