Vedanta Zinc International, a unit of diversified miner Vedanta Resources, has not been deterred from investing in an energy intensive zinc smelter in South Africa despite regular power shortages in the country.
Struggling state-owned utility Eskom, which provides 95% of the power to Africa’s biggest economy, last week implemented controlled power cuts due to its power system coming under strain.
Vedanta plans to invest up to $800 million in a zinc smelter in Gamsberg in the Northern Cape province. It has already completed a first phase of a zinc mine there, which is expected to produce 4 million tonnes of ore per year.
“If you just look at grid capacity there is surplus power available,” said Vedanta Zinc International chief executive officer Deshnee Naidoo.
Deshnee said the firm would also look at generating some of its own power to supplement power from Eskom for the energy-intensive smelter.
“We are absolutely looking at building our power plant here as well,” said Deshnee.
The firm said it will require around 200 megawatts of additional power for the refinery.
Eskom cut supply to one of BHP Billiton’s aluminum smelters in 2013 after nation-wide demand outstripped supply.