Indian giant buys Skorpion

SKORPION Zinc has a new owner. The Indian metal and mining giant Vedanta Resources has paid US$698 million, nearly N$5 billion, for the mine as part of a deal to buy Anglo American’s zinc assets and become the biggest zinc producer globally.

The Namibian mine, the eight largest zinc producer in the world, fetched the highest price in the US$1,3 billion deal. Vedanta forked out US$332 million for 74 per cent interest in Black Mountain Mining in South Africa and US$308 million for the Lisheen mine in Ireland. In both the Skorpion and Lisheen transactions, Vedanta acquired 100 per cent of the shares.Vedanta, who will execute the transaction through its subsidiary Hindustan Zinc, emerged as the successful bidder in a race that included China Metallurgical Group Corp and Xstrata.Like the rest of Namibia, Mines and Energy Minister Isak Katali learnt of the latest development through press announcements. He declined to comment on the takeover yesterday afternoon, as he had not yet been officially informed.For now, it seems like it will be business as usual for the 689 workers and 672 contractors at Skorpion, sources at the mine said, adding however that ‘there will be changes’. Officially, the mine had no comment, referring The Namibian to Anglo’s statement.’The successful sale of Anglo American Zinc for US$1,338 million following our announcement in October last year is testament to the high quality of the business and its management team,’ Cynthia Carroll, Chief Executive of Anglo American, said. Indian billionaire Anil Agarwal, Vedanta Chairman, in turn said his company ‘has consistently demonstrated a track record of successful integrating and investing in its acquisitions’. ‘We look forward to working with the high quality management team and employees of Anglo American Zinc, Exxaro [Anglo’s black economic empowerment partner in Black Mountain] and the local communities towards growing the business.’Agarwal said Vedanta intends to ‘rapidly develop Gamsberg’ at Black Mountain, one of the largest undeveloped zinc deposits in the world.Skorpion, besides helping Vedanta to supply in 11 per cent of the world zinc market, will also ‘create significant long-term value’ for shareholders through the ‘newly discovered Gergarub zinc/lead sulphide deposit’ adjacent to the mine, he said. Vedanta is the world’s biggest lead producer.Figures released by Skor-pion’s public relations office yesterday show that the mine contributed 2,5 per cent to Namibia’s gross domestic product (GDP) last year. It spent N$126,8 million on capital expenditure, while N$128,4 million flowed into state coffers from taxes.Over the past four years, Skorpion pumped more than N$2,3 billion into the local economy.According to Anglo figures, Skorpion earned US$236 million, about N$1,8 billion, in revenue last year. Black Mountain earned US$180 million, while Lisheen brought in the bulk with US$301 million.As far as Ebitda (earnings before interest, taxes, depreciation and amortisation) was concerned, Skorpion emerged as the star performer though. The mine’s Ebitda, in financial circles regarded as a good indication of a company’s operating cash flow, was US$100 million. Lisheen and Black Mountain, in comparison, recorded Ebitdas of US$72 million and US$55 million respectively.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.

The Namibian uses AI tools to assist with improved quality, accuracy and efficiency, while maintaining editorial oversight and journalistic integrity.