Indian billionaire Anil Agarwal wins South Africa’s backing for zinc smelter as country seeks more mineral wealth

Indian billionaire Anil Agarwal’s Vedanta has secured South African President Cyril Ramaphosa’s backing for a proposed zinc smelter in the Northern Cape. The project would deepen the group’s investment in the country while helping South Africa capture more value from minerals that undergo further processing overseas.

• Ramaphosa backs Vedanta’s proposed zinc smelter in South Africa’s Northern Cape.
• The project could create jobs and expand local mineral processing.
• Vedanta’s Gamsberg expansion will double ore-processing capacity to 8 million tonnes annually.
• The smelter depends on affordable electricity and reliable infrastructure.

However, the next investment depends on conditions that political support alone cannot resolve, including commercially viable electricity and reliable infrastructure.

Ramaphosa endorsed the ambition on 16 October while inaugurating the second-phase expansion of Vedanta’s Gamsberg operation near Aggeneys.

The proposed smelter would allow Agarwal’s group to move beyond zinc concentrate production into refined metal. South Africa could benefit from additional manufacturing activity, local procurement and job creation.

According to Business Day’s reporting on the project⁠, electricity and energy minister Kgosientsho Ramokgopa also expressed support for the smelter and indicated that electricity pricing would be central to making it possible.

In his official address published by the Presidency⁠, Ramaphosa said government must work with Vedanta and other partners to address the requirements for a competitive investment.

“We therefore welcome Vedanta’s ambition to establish zinc smelting capacity in the Northern Cape,” he said.

The expanded Gamsberg operation will have annual ore-processing capacity of approximately eight million tonnes, double its previous capacity. Annual zinc-in-concentrate production capacity will rise to approximately 500,000 tonnes.

The concentrator inaugurated on 16 October and the proposed smelter represent separate stages of processing. The opening of the expanded operation does not mean the smelter has been built or that its commercial conditions have been agreed.

Ramaphosa placed the proposal within a wider push to develop domestic industries around South Africa’s mineral resources, rather than allowing much of the processing and manufacturing value to accrue elsewhere.

Zinc is used to protect steel against corrosion, linking its market to construction, transport infrastructure and manufacturing.

The commercial challenge is whether South Africa can provide the electricity and infrastructure needed to turn its mineral supply into competitively priced refined metal. Government backing gives Vedanta political support, but those operating conditions will determine whether the next stage becomes viable.