Vedanta to Develop 100,000-Ton Copper-Rods Plant in Emirates

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Researched by Industrial Info Resources (Sugar Land, Texas)--Vedanta Resources Plc (LSE:VED) (London), a leading metals and mining firm, plans to develop a copper-rod manufacturing plant in Fujairah, United Arab Emirates, with an initial investment of $15 million. With a production capacity of 100,000 tons per year, the unit will supply cables to power grids in the region. Construction is scheduled for completion by December.

Vedanta also plans to invest $6 million to expand its gold refinery in Fujairah by early next year. The ore processing capacity of the refinery will be doubled from the present 20 million tons per year to 40 million tons per year.

Vedanta anticipates huge demand for copper rods not only in the Emirates or the Gulf Cooperation Council (GCC) region but also in all of Middle East. With more than 118 power generation projects being developed in the GCC at a combined investment of $150 billion, the region is estimated to require 40,000-50,000 tons per year of copper rods for its power distribution infrastructure. The Middle East is likely to make investments of about $500 billion in power projects by 2030, thereby leading to increased demand for copper rods and cables.

Vedanta will secure raw material for the project from Zambia, where it owns and operates four copper mines -- two in Nchanga, one in Konkola and one in Nampundwe -- a smelter at Nkana, and a tailings leach plant at Nchanga. The firm produced 489,782 tons of copper cathodes in Zambia in 2008. Vedanta will use copper cathode with a purity of 99.9% and zero presence of hazardous substances at the new plant in Fujairah. The firm has also stated that it will not use scrap metal in the new unit.

In February, Vedanta shut down its Nkana copper smelter in Zambia and reduced its work force by 700 employees in order to trim operational costs. By March, the firm managed to lower operational costs from $2.93 per pound of copper to $1.4 per pound. Vedanta plans to cut an additional 1,300 jobs in the region. The firm is also reportedly investing more than $500 million in the Konkola Deep project, which will extend the life of the mine by 22 years and increase its yield from 2 million tons per year to 7.5 million tons per year of ore.

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