South African President Cyril Ramphosa inspects new technology at the Gamsberg operation after the ribbon cutting
ceremony. (Photo: Vedanta Zinc)

The project is being driven by Vedanta Zinc International, the India-based industrial and mining firm under their Black Mountain Mining complex. At its first phase, the mine employed more than 3,000 people at the height of construction. Around 800 to 850 people will be employed permanently, once Gamsberg is in production. The mine was officially opened in early March by South African President Cyril Ramaphosa, at a time when greenfield projects are rare in the country.

“The Vedanta Gamsberg project is an important step in our shared journey to revive our mining industry,” Ramaphosa said. “It confirms our view that with an effective regulatory framework, improved collaboration between all stakeholders and sustained investment, mining has the potential to be a sunrise industry.” The South African mining sector has struggled to lure investments, as government policy over the past five years pursuing local ownership kept capital away. Ramaphosa took office in early 2018 and has reversed most of this policy direction. He said as policy certainty was introduced, further projects would follow. “We are confident that we will see more mining projects of this magnitude as many more investors, like Vedanta, see the great potential not only in mining, but also across the South African economy,” Ramaphosa added.

Vedanta meanwhile said Gamsberg sits atop of one of the world’s largest unexploited zinc ore bodies. It has a reserve and resource of more than 214 million tons, with a grade of between 6% and 6.5% zinc. Vedanta plans at least two expansion phases beyond the current operation. Ore mined will be increased to 8 million t/y and production of zinc-in-concentrate to 600,000 tons annually. This will cost another US$400 million. Further, the orebody is rich in sulphide, which opens the possibility of sulphuric acid produced as a byproduct. Combining the sulphuric acid with known phosphate reserves in the area could lead to the creation of a regional fertilizer industry, Vedanta said.

A significant challenge the new operation will face is a consistent electricity supply. South Africa is undergoing critical energy shortages that lead to scheduled blackouts, known locally as “loadshedding.” This could interfere with productivity. “We need to be able to depend on stable electricity,” CEO of Vedanta Zinc International Deshnee Naidoo said. The company has plans to partner with independent energy producers, she added, without going into details. However, the Northern Cape is already home to numerous solar farms, which could be a likely source of power to Gamsberg.

Demand for zinc is expected to grow over the next four years, according to analytics company GlobalData. Vinneth Bajaj, senior mining analyst at GlobalData, said production was also on the uptick. “After declining substantially in 2016, global zinc mine production increased in both 2017 and 2018, respectively,” Bajaj said. “However, the market has remained in a severe deficit.”