Vedanta Partners with Saudi Arabia for $2 Billion Copper Expansion

27 Nov 2024 , 10:21 PM

Vedanta, in a proposal led by chairman Anil Agarwal, recommends an investment of US$2 billion in Saudi Arabia to start a greenfield copper smelter, refinery, and copper rod-producing facility. The investment made by Saudi Arabia falls under the vision of the country for Vision 2030: diversification of their economy and lessening reliance on fossil fuels.

On November 26, Vedanta Copper International signed a Memorandum of Understanding with Saudi Arabia. The projects will push the development of Saudi Arabian capacity for the copper supply chain by unlocking its previously untapped mineral resources.

Capacity of the copper smelter and refinery will be built at 400 KTPA. Rod production will be at 300 KTPA and commercial operation will start by Q4FY26. Projects will be based in Ras Al Khair Industrial City, Saudi Arabia. These projects will generate thousands of jobs, have a multiplier effect on the generation of downstream industries, and contribute around $19 billion to Saudi Arabia’s GDP.

The demand for copper in Saudi Arabia is anticipated to increase more than twice by 2035 as compared to the present level of 365 KTPA, which is primarily satisfied through imports.

Saudi Vision 2030 locks up mineral resource worth $1.3 trillion and targets an increase in the share of the mining sector of the GDP from $17 billion to $64 billion by 2030. Because mining has remained very minimal within the economy of the Saudi Kingdom, the massive effort is currently on the significant products such as bauxite, copper, zinc, phosphate, and precious metals.

The company’s projects form part of nine foreign investment deals worth $9.32 billion signed by Saudi Arabia, including deals with China’s Zijin Group.

Top officials from Saudi Arabia’s Ministry of Mines and National Industrial Development Centre had visited Vedanta’s Indian operations before signing the deal.

Saudi Arabia Vision 2030 was about overcoming the challenges arising both from low oil prices from a global perspective and oncoming transition from oil-based types of energy in 2016. The program enjoys economic diversification through tourist investment and renewable energy projects and large construction projects for instance Neom city. Projects by Vedanta contribute generally to efforts in sustainable transport which leads to an increased demand for electricity and consequently a demand for copper.

Saudi Arabia is targeting $100 billion in annual foreign investment as part of its Vision 2030 plan to transform its economy and society.