Indian company Vedanta to list its Zambian copper unit on the London stock exchange to raise 1.1 billion US dollars. Zambia hopes to boost output so the country can become third biggest producer in the world.
LUSAKA, ZAMBIA (NOVEMBER 17, 2010) REUTERS -Indian mining group Vedanta Resources plans to float its Zambian copper business on the London stock exchange next month in an initial public offering that could value the business at up to 7 billion US dollars.
The offering will consist of new and existing shares in Konkola Copper Mines (KCM), the second-biggest integrated copper producer in Africa, raising about 1.1 billion US dollars, which can be ploughed back into KCM to boost output.
Kishore Kumar, chief executive of KCM's holding company Konkola Resources said in a conference announcing the listing that Zambia has the potential to produce 1 million tonnes of copper per year.
"The listing of KCM shares in London confirms to the international market that Zambia is back, Zambia is back as the major copper producer nation in the world and if this 1 million tonne vision of the country is achieved, you must be proud that this country will be the third copper producer in the world," said Kumar.
KCM will be the first Zambian company listed on the London Stock Exchange. Vedanta will retain a majority shareholding in KCM, which will also be listed in Zambia's capital, Lusaka.
"One of the criticism's in the 70's was that you had it all, no participating in the local economy. With what has been done now to list on the Lusaka Stock Exchange and on the Lusaka Stock Exchange, that criticism goes away because everyone now is free to participate," said Zambian finance minister, Situmbeko Musokotwane.
Zambian Commerce, Industry and Trade Minister, Felix Mutati said he was optimistic that there would be more investment following the decision to list the company.
"Our role us government is very simple, our role us government is that we will continue to sell confidence, trust and hope in this economy."
KCM has 404.8 million tonnes of proved and probable mineral reserves, with contained copper of 6.52 million tonnes. It has 20,777 employees and third-party contractors, making it the largest private employer in Zambia.
If the listing follows usual timelines, a price range could be expected around the end of the month with final pricing around December 15.