Vedanta Secures Purchase of Anglo American's Zinc Units

Posted in Industry News on 25th May 2010

William Rowland are a leading supplier of Zinc.

Vedanta Resources, the India-focused mining group have secured the purchase of Anglo American PLC’s zinc assets for an eye watering price of $1.34bn in order to boost its exposure amongst the non-ferrous metal industry as well as expanding its presence in Europe and Africa.

Upon completion of the takeover, Vedanta will become the world’s largest zinc producer having amassed 11 percent of the global market. The company now hold mines in Namibia, Ireland and South Africa and will boost their annual output of lead and zinc by more than a third.

The deal makes Vedanta the latest in a string of Indian companies buying access to resources, challenging several other global contenders for assets during a period where zinc is experiencing a surge in spot prices due to its use in construction and car making.

Vedanta will acquire its new assets through their Indian unit, Hindustan Zinc Ltd, which houses the group’s zinc business. The takeover will be funded from the $2.3bn of cash reserves the Indian unit has accumulated.

The deal itself highlights Vedanta’s bullish view regarding the future of the zinc market, basing its purchase on a belief that global demand for zinc and steel will remain strong. This has been supported by the fact that zinc prices have risen more than a third from the $1595 per tonne it averaged throughout last year.

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