Vedanta Resources chairperson Anil Agarwal
Globally diversified India-headquartered mining company Vedanta Resources chairperson Anil Agarwal has told Mining Weekly that the company aims to complete its commitment to invest $1-billion in South Africa in the near future, although its plans are being held up by a lack of reliable infrastructure and energy security.
Vedanta has already invested significantly in zinc mining in South Africa.
Agarwal revealed that Vedanta's investment journey in South Africa was prompted by Indian Prime Minister Narendra Modi's sentimental attachment to the region, as it holds significance as the starting point of pacifist Mahatma Gandhi's freedom-fighting movement.
In 2018, during a visit with the Prime Minister, Agarwal committed to investing $1-billion in South Africa, with the aim of creating a substantial number of jobs.
Highlighting their progress, Agarwal said Vedanta had already invested $500-million in the Gamsberg zinc mine, in which Vedanta holds 69.6%, while Exxaro Resources owns 24.4% and an employee stock ownership plan 6%.
This project has infused capital and brought job opportunities to an area previously devoid of significant employment prospects. Through collaborative efforts with the South African government, Vedanta has initiated the development of an industrial hub, leveraging the region's natural and human resources.
"We are going to invest another $500-million for a smelter and making the final product. The government has been working with us, creating an industrial hub in that area because they have human resources and natural resources," Agarwal said.
He said that, although Vedanta wanted to make the additional $500-million investment as quickly as possible, the timing was dependent on the availability of the necessary infrastructure.
"If I know that infrastructure is going to be provided now and it will be available, I can tell you that I can have $500-million to be invested within 12 to 18 months. But it all depends on the power supply and the railroad," he explained.
The company's commitment to social responsibility is showcased through its employment of 3 000 individuals, with plans to add another 2 000 jobs upon the completion of a smelter, bringing its total investment to $1-billion.
However, Agarwal identified two critical challenges that needed to be addressed for the successful realisation of these plans: power security and infrastructure development.
He underscored the significance of a consistent power supply for industrial operations and hinted at Vedanta's interest in renewable energy sources such as solar and wind. Agarwal lauded South Africa's potential for renewable power generation and alluded to Vedanta's ongoing exploration of these avenues.
"Renewable power has a big potential in South Africa, not only solar but wind as well. We have seen that the velocity of the wind is quite favorable. So we are working on it," he said, noting Vedanta’s record as one of the leading renewable power producers.
He added that State-owned power utility Eskom would only improve if it was privatised.
"Eskom can be privatised. Trust me, it has huge potential. At least 50% to 100% more power can be generated. The government should consider that, and speed is very important because people are suffering," Agarwal said.
He acknowledged that collaboration between the private and public sectors was essential to overcome infrastructure constraints. He expressed optimism about the prospects of South Africa as an investment destination, citing Vedanta's previous commitment to keeping major companies rooted in the region.
"I have a feeling that now zinc and the metal downstream have huge potential in South Africa – galvanising, pharmaceuticals, chemicals – all these are required all around the world, and South Africa can be an attractive place to produce this as it is a land of entrepreneurs," Agarwal said.