Vedanta eyes Australian copper mines

  • Indulal PMIndulal PM, Mumbai
  • |
  • Updated: May 29, 2007 04:26 IST

After buying out Mitsui's 51 per cent stake in Indian iron ore major Sesa Goa, the Anil Agarwal-controlled Vedanta Resources is scouting for mines in Australia.

Vedanta, which owns the Thalanga mines in Australia, is in negotiations with WMC, Australia's largest copper producer, to acquire its copper assets, according to investment banking sources. These assets have a valuation in the range of $400 million to $500 million.

Vedanta’s total copper concentrates’ capacity is 14.4 million tonnes per annum. Vedanta produces about 313,000 tonnes of copper, which will increase to 400,000 tonnes after the commissioning of its smelter in Tuticorin. “The company needs more raw material to feed additional capacities. This could be the reason why it is looking at acquiring mines,” said an industry source. Copper contributes 15 per cent to Vedanta’s total revenue.

When contacted a Vedanta spokesperson declined to comment and the company did not respond to an e-mail questionnaire on the subject.

WMC is Australia’s largest copper producer, with production dominated by the Olympic Dam mine. It has a mining capacity of about 275,000 tonnes a year. Vedanta has one copper mine in Australia and two in Zambia.

"Though Vedanta expanded its business to iron ore mining as well, it intends to concentrate on its core businesses of copper, zinc and aluminium. The acquisition of copper assets are part of the company's strategy and it has been scouting for mine assets in Australia for a while," said a Mumbai-based analyst with UBS. Vedanta brought the iron ore assets of Sesa Goa for Rs 3,968.14 crore. 

Australia is the world's third largest copper producer after Indonesia and Chile, producing 900,000 tonnes of copper concentrates a year, according to the Australian Mining Association. The region is becoming India Inc’s most favoured destination as Tata Power is also scouting for coal mines in the country. After acquiring Bumi Resource’s two mines in Indonesia, Tata Power is looking at Queensland and New South Wales.

indulal.pm@hindustantimes.com

 

also read

SpiceJet flies high, stocks soar nearly 7% on solid results

blog comments powered by Disqus