Africa-Press – Zambia. KCM’s assets are carried on VRL’s balance sheet at an inflated valuation of $2.7b, propped by manufactured and misleading DCF. Our on-the-ground investigations, review of the terms of KCM’s scheme of arrangement, and financial analysis reveal an asset in terminal decline
August 29, 2025 – Konkola Copper Mines (KCM), an 80% subsidiary of Vedanta Resources Limited (VRL), controls copper mining, smelting, and refining assets in Zambia.
It is a distressed asset: seized by the Zambian government in 2019 after Vedanta’s repeated failure to invest and returned only in July 2024 under legal pressure, political lobbying, and a renewed pledge of $1.4b in VRL investment.
Viceroy’s investigation drew on interviews with KCM personnel, site inspections, drone footage, satellite imagery and financial analysis.
We visited the Konkola Mine at Chililabombwe, the Nchanga Refinery and Smelter in Chingola, and the Nkana Refinery in Kitwe.
What we found were facilities operating far below capacity and in disrepair.
Many are kept running only by reprocessing waste dumps rather than producing copper from active mining.
▪ KCM is a distressed asset: once seized by the Zambian government for lack of investment, now returned to Vedanta in July 2024 on the back of legal pressure and a hollow $1.4b investment pledge.
▪ Operations are crippled: site visits and satellite imagery confirm plants are running at a fraction of capacity, with facilities sustained by reprocessing waste dumps rather than mining fresh ore.
▪ Physical decay is evident: the Konkola mine is flooded and power-starved, Nchanga’s smelter and refinery are gutted, and Nkana shows signs of dismantling instead of refurbishment.
▪ Production has collapsed: finished copper output has fallen more than 75% since 2018, with concentrate exports rising because domestic smelting capacity is incapacitated.
▪ Financials confirm the decline: FY25 results show negative EBITDA, operating losses of nearly $200m, and only $12m in sustaining capex, far short of what is needed to restore production.
▪ Valuation is overstated: Vedanta books its KCM PPE at $2.7b. KCM’s Liquidator last year reported PPE at $1.1b.
▪ DCF valuation support isfabricated: Under KCM’s scheme of arrangement any FCF profitability would cause liabilities which were written off as part of the scheme to come back on the balance sheet.
Any DCF valuation of KCM is completely fabricated and assumes that VRL will cheat its Zambian creditors.
▪ Borrower risk is rising: VRL carries over $13b of group debt with an effective cost exceeding 15%, making the $1.2b KCM commitment financially impossible without taking on unsustainable new borrowings.
▪ Liquidator’s notes: KCM’s liquidator explicitly stated that its demise was due to persistent delays in expansion projects and the cut off of maintenance capex by VRL.
▪ Asset stripping: liquidation and caretaker periods saw infrastructure dismantled and sold for scrap, meaning replacement costs are far higher than VRL acknowledges.
▪ Political risk is acute: Zambia has already expropriated KCM once, and with unrest in Chingola and Kitwe, the risk of renewed intervention or forced restructuring remains high.
Our analysis suggests that Vedanta’s $1.2b expansion commitment would not even be sufficient to restore KCM’s facilities to their 2018 production levels, let alone fund meaningful expansion.
For VRL’s bondholders there are only two paths forward for KCM.
Either:
VRL throws good money after bad, raising highly expensive debt (or pledging VEDL cash flows) to fund an asset that cannot deliver, or
It accepts defeat and risks the Zambian government once again seizing KCM.
In both scenarios, bondholders lose. Either through further leverage at punitive cost, or through the collapse of asset value on Vedanta’s balance sheet.
The short-seller Viceroy Research released a scathing report on the Vedanta Group, accusing its UK-based parent company, Vedanta Resources (VRL), of operating a “Ponzi-like scheme”.
Viceroy took a short position against VRL’s debt, alleging that the parent company is financially unsustainable and drains cash from its Indian subsidiary, Vedanta Limited (VEDL), to stay afloa
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