Vedanta Ltd’s international zinc operations in Southern Africa are in 'crisis', with its flagship Skorpion Mine and Smelter in Namibia described as 'a scrapheap beyond salvation' and its restart plans branded 'pure fiction', alleges US-based investigative financial research group Viceroy Research.
In a report released on Monday, Viceroy said its on-ground inspection of the Skorpion Complex—comprising the mine and its SX-EW refinery—revealed a site that has been abandoned since operations ceased in 2020 following a wall collapse. Despite repeated public assurances from Vedanta management over the past six years that mining and smelting would resume, the report claims no tangible investment has been made towards the promised 'smelter conversion' or 'mine expansion' projects.
The Skorpion facility, held by THL Zinc Namibia and valued at US$70mn (million) on Vedanta’s books, is described as propping up over US$1bn (billion) in valuation for its sister Black Mountain or Gamsberg mine in South Africa.
Viceroy disputes Vedanta’s claim that the refinery can be converted to process ore from Black Mountain, citing fundamental metallurgical differences between the oxide ore Skorpion was built for and the sulphide ore from BMM.
"Vedanta asserts that the Skorpion complex remains a strategic asset, explicitly holding a valuation of $70m on its balance sheet, but implicitly supporting a more than US$1bn valuation for the Black Mountain project through its smelter conversion project. The date for the reopening of the Skorpion complex has been pushed back repeatedly since its closure, with management consistently claiming that the reopening is less than a year away. This was confirmed by a long-serving worker at the mine who stated, 'from the year they closed, they are talking about opening this year coming, then opening next year',” the report says.
The investigative financial research group says such a conversion would require a complete rebuild, not a modification, and notes that there is no industrial power supply to the site, no preparation for construction and no viable transport route for the ore between South Africa and Namibia.
Photographs, drone footage and interviews with local residents and current and former employees from Viceroy show a pit compromised by slope failures, flooded with no dewatering in place and entirely stripped of mobile equipment. Less than eight months of recoverable ore remain, according to an internal report cited by Viceroy, making any restart uneconomic. The site, it says, has fewer than 40 part-time caretakers and no operational or technical staff, with utilities and process infrastructure offline since 2021.
The report also accuses Vedanta of grossly under-provisioning for environmental rehabilitation. Viceroy notes that while Australia’s Century zinc mine closure is estimated at US$750mn–US$1bn, Vedanta has set aside just US$16mn for Skorpion’s decommissioning and restoration, an amount it believes is 'wholly inadequate'.
Once remaining inventories are sold, the report warns, Vedanta could place Skorpion into liquidation without fulfilling even this minimal obligation, leaving the Namibian government without recourse.
Beyond the industrial decay, the report raises concerns over public health in Rosh Pinah, the nearby township that once housed Skorpion workers, which Viceroy says is contaminated with toxic lead dust from mining activity. Interviews describe worsening living conditions, health hazards, and economic decline since the mine’s closure, with the workforce reduced from around 400 to fewer than 40 people.
Viceroy concludes that Zinc International’s assets are severely overstated and that debt tied to these assets is cross-guaranteed against other Vedanta holdings, including its stake in Hindustan Zinc Ltd. “The Skorpion Complex is not an asset, it is an unquantified liability,” the report states, urging regulators, investors, and stakeholders to scrutinise Vedanta’s disclosures and the long-term viability of its Southern African operations.
Vedanta has not yet responded publicly to the allegations in the Viceroy Research report.
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