Vedanta doubles South African zinc capacity with $600mn Gamsberg expansion

Vedanta Ltd has doubled its annual zinc production capacity in South Africa to 500,000 tonnes following an investment of nearly $600mn in the second phase of its Gamsberg mine, in a move that strengthens the Indian group’s ambitions to expand its global zinc business.

The expansion at Vedanta Zinc International’s flagship operation in the Northern Cape was inaugurated by South African President Cyril Ramaphosa and Priya Agarwal-Hebbar, a director of Vedanta, according to a company statement.

The investment forms part of Vedanta’s broader commitment to South Africa, where it pledged 21bn rand, equivalent to about $1.5bn, at the country’s 2018 Investment Conference. The company said the Gamsberg expansion was among the decade’s largest mining investments in the country.

Vedanta aims to produce 3mn tonnes of zinc annually across its Indian and South African operations. Its Indian subsidiary Hindustan Zinc is targeting 2mn tonnes, while Vedanta Zinc International aims to contribute 1mn tonnes a year.

The company’s plans come as zinc demand remains closely linked to infrastructure and industrial development. The metal is widely used to galvanise steel, protecting it from corrosion and extending its lifespan in construction, automotive manufacturing and other applications.

Ramaphosa welcomed the expansion and called for closer cooperation between the company and the government to support further industrial investment.

“We have come to celebrate an investment that has moved from commitment to construction, and from construction to production,” he said. “We welcome Vedanta’s ambition to establish zinc smelting capacity in the Northern Cape.”

He added that the government needed to work with Vedanta and other partners to address the company’s requirements.

Agarwal-Hebbar said the project represented a longer-term commitment to South Africa’s industrial development, rather than simply an increase in mining output.

“For Vedanta, Gamsberg Phase II is more than an expansion of its zinc business. It is a commitment to South Africa’s future,” she said.

She added that the company wanted to develop a globally significant zinc and industrial hub in the region, creating jobs and economic opportunities.

“The true measure of our success is not just what we produce, but the prosperity we help create for generations to come,” she said.

Vedanta’s expansion reflects its strategy of increasing production across its mining portfolio while positioning itself to serve demand from infrastructure, manufacturing and industrial development. The company’s longer-term target of 3mn tonnes of annual zinc production will depend on the delivery of its planned capacity increases in India and South Africa.