Vedanta to Halt Operations at Skorpion Zinc Unit in Namibia

- March 30th, 2020

The company made the decision following pit failures that paralyzed a significant portion of the open-cast mine.

Vedanta Zinc International is set to halt operations at its Namibian zinc unit by the end of April, the company said on Monday (March 30).

Following pit failures that paralyzed a significant portion of the open-cast mine, the subsidiary of diversified miner Vedanta Resources (NYSE:VEDL) has decided to put its Skorpion zinc mine and refinery into care and maintenance.

“The decision has been taken to cease all mining operations while studies continue to look at feasible ways to make the pit safe for mining options which would allow for the extraction of the remainder of the accessible ore,” the company said in a statement.

 

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The company was expecting to take this measure in May, but the failures resulted in an ore gap in excess of 10 months, with further technical studies indicating similar failure structures at depth.

South Africa-based Vedanta Zinc International, which acquired Skorpion as part of its acquisition of Anglo American’s (LSE:AAL) zinc business in 2011, added that a production ramp down will happen progressively during the month of April.

This period overlaps with a country-wide lockdown to contain the spread of COVID-19, which has also impacted other zinc companies’ operations around the world.

“Accelerated focus will now be on the refinery conversion project to enable co-treatment of both sulfide and oxide ore … a feasibility study which was completed in 2015 is now being refreshed,” the firm said.

Since the acquisition, Vedanta Zinc International has invested over US$1.6 billion in the project, which came into production in 2003; that includes US$25 million on exploration alone. Refined zinc production from the asset in the 2018 fiscal year was approximately 90,000 tonnes, with that amount set to rise to 130,000 tonnes in 2020, according to the company’s website.

Aside from Skorpion, Vedanta Zinc International holds interests in Black Mountain Mining and the Gamsberg zinc project in South Africa, and the Lisheen mine in Ireland.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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