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Vedanta announces that Skorpion Zinc goes into Care and Maintenance

Vedanta announces that Skorpion Zinc goes into Care and Maintenance

The unstable morphology of the open pit and the extensive losses from labour strikes are cited by the owner of the Skorpion Zinc mine and smelter, Vedanta Zinc International, as two of the major reasons why they have decided to place the mine on Care and Maintenance, starting with the process next month.

Vedanta Zinc International acquired the mine and smelter in 2011 as part of the acquisition of Anglo American’s zinc portfolio. The mine is located in Namibia’s deep south, just a few kilometres north of the Orange River, the border with South Africa.

Vedanta said at the time of the acquisition, the mine’s end of life was projected for 2014. Since Vedanta became the new owner, it has invested more than US$1.6 billion to extend the life of the pit and to explore for new deposits. US$25 million was spent on exploration alone.

This investment helped to implement a mine-life extension project which started in April 2017, with the intention that end of life will be reached in May 2020. At this point, Vedanta planned to close the mine and put the smelter under Care and Maintenance.

“However, significant events (pit stability) and inefficiencies (including labour disruptions) during this period have resulted in intermittent stoppages and/or delays which have in turn unfavourably extended the project timeline and significantly eroded project value,” Vedanta stated this week.

A major failure in the structure of the open pit last year, coupled with smaller failures, resulted in an ore gap of more than 10 months, despite the failures being mined out safely. In the meantime, further technical studies have indicated that more failures can occur at depth. The last such failure happened earlier this year in January.

“The safety of all employees is our first value. As a result, 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,” said Vedanta.

The decision to cease mining affects about 1500 employees whose futures will be determined by the negotiations between Vedanta and the Mineworkers Union of Namibia.


 

About The Author

Daniel Steinmann

Brief CV of Daniel Steinmann. Born 24 February 1961, Johannesburg. Educated at the University of Pretoria: BA, BA(hons), BD. Postgraduate degrees are in Philosophy and Divinity. Editor of the Namibia Economist since 1991. Daniel Steinmann has steered the Economist as editor for the past 29 years. The newspaper started as a monthly free-sheet, then moved to a weekly paper edition (1996 to 2016), and on 01 December 2016 to a daily digital newspaper at www.economist.com.na. His editorial focus is on economic analysis based on budget analysis, disecting strategic planning and assessing the impact of policy formulation. For eight years, he hosted a weekly talk-show on NBC Radio, explaining complex economic concepts to a lay audience in a relaxed, conversational manner. He was a founding member of the Editors' Forum of Namibia. Over the years, he has mentored scores of journalism students as interns and as young professional journalists. He often assists economics students, both graduate and post-graduate, to prepare for examinations and moderator reviews. He is the Namibian respondent for the World Economic Survey conducted every quarter for the Ifo Center for Business Cycle Analysis and Surveys at the University of Munich in Germany. He is frequently consulted by NGOs and international analysts on local economic trends and developments. Send comments to [email protected]