Vedanta Invests $600M to Double South Africa Zinc Capacity to 500,000 Tons Amid Rising Prices

Vedanta Ltd has announced an investment of nearly $600 million to double annual zinc production capacity at its Gamsberg mine in South Africa to 500,000 tonnes, the company said in a press release filed with the BSE on October 18.

The expansion marks a significant step in Vedanta's efforts to increase its zinc production base in South Africa amid a sharp rise in international zinc prices over the past year, driven by mine-supply constraints, smelter disruptions and demand from steel galvanising and infrastructure-related industries.

South African President Cyril Ramaphosa and Vedanta Ltd Director Priya Agarwal-Hebbar inaugurated the expanded capacity at Gamsberg, located in the Northern Cape province. Vedanta operates in South Africa through its subsidiary Vedanta Zinc International (VZI), which manages the group's zinc mining and processing operations, including Gamsberg and Black Mountain Mining.

South Africa accounted for approximately 3% of global zinc reserves in 2024, according to figures cited by Natural Resources Canada. The Gamsberg deposit has estimated resources of 186 million tonnes of ore across two ore bodies, according to South Africa's Department of Mineral Resources and Energy. This figure refers to ore resources rather than contained zinc metal or proven and probable reserves.

Vedanta aims to achieve annual zinc production of 3 million tonnes across India and South Africa. Its subsidiary Hindustan Zinc Ltd is targeting annual production of 2 million tonnes, while VZI aims to contribute 1 million tonnes, according to the company. The Gamsberg expansion will increase VZI's annual capacity to 500,000 tonnes, with further growth required to reach its longer-term target.

Zinc prices rise amid supply concerns

LME three-month zinc prices rose approximately 23% from the October 2025 monthly average of $3,007.87/mt to $3,699/mt on October 16, 2026. Prices climbed above $4,000/mt in September before easing, reflecting concerns over mine output, concentrate availability and disruptions at smelters.

Demand from steel galvanising, construction and infrastructure has provided additional support to prices. Global refined zinc demand rose 1.9% year on year to 13.86 million tonnes in 2025, according to preliminary data from the International Lead and Zinc Study Group. Refined production increased 2.1% to 13.89 million tonnes, leaving a preliminary market deficit of 33,000 tonnes.

More recently, LME three-month zinc prices fell to $3,699/mt on October 16 from $3,842/mt on September 30. LME warehouse stocks rose to 158,275 tonnes from 121,600 tonnes over the same period, easing some concerns over immediate metal availability.

Vedanta said the Gamsberg investment builds on its commitment of 21 billion South African rand, or nearly $1.5 billion, announced at the 2018 South Africa Investment Conference. The expansion is expected to strengthen the company's position in the global zinc market and support its longer-term production ambitions.