London-based Vedanta Resources has said it would acquire 51 per cent controlling stake in Zambia-based Konkola Copper Mines for $48.2 million (over Rs 222 crore).
The agreement was conditional on Zambia Copper Investments Ltd's sharholders' nod and was expected to be completed by October 2004, Vedanta said in a press release in Mumbai on Friday.
Out of the total cash consideration of $48.2 million, $27.3 million is payable on completion.
The acquisition is expected to enhance earnings in the first full year of ownership and provide opportunities to improve operational efficiency and increase returns.
Vedanta said the acquisition was assessed on the basis of existing assets and reserves and without assuming any benefit from additional resources.
Vedanta chief executive Anil Agarwal said, "We have been negotiating with KCM shareholders and the Zambian government for a considerable time and I am delighted that we have been able to structure a deal that brings benefits to all parties."
"The outlook for copper demand remains positive over the medium term and Zambia is one of the great copper areas of the world. Our immediate task will be to stabilise the existing assets and enhance production."
KCM is currently 58 per cent owned by ZCI and 42 per cent by ZCCM Investments Holdings.
Vedanta has the right to exit KCM at any time after December 31, 2007, subject to a 12-month notice period, the release said.
