By: OrePulse

Vedanta Zinc International says a proposed $1.5 billion zinc smelter at Gamsberg, in South Africa's Northern Cape province, hinges on the company securing an electricity tariff it considers commercially viable, with a final investment decision on the project still pending, the company said in comments reported October 12, 2026.

Chief executive officer Vijay Kumar said Vedanta needs electricity priced at about 60 South African cents per kilowatt-hour for the smelter to make commercial sense, compared with roughly 63 cents per kilowatt-hour currently under discussion with power suppliers. Kumar described the difference as a "small" gap that he expects can be bridged. He said Vedanta anticipates that preferential electricity tariffs already granted to existing smelters in South Africa will also be extended to the proposed Gamsberg facility.

As currently planned, the smelter would begin operating at a capacity of 500,000 metric tons of zinc a year, with the potential to eventually double to 1 million metric tons annually. That expansion path mirrors Vedanta's broader ambition for the site: the company aims to double Gamsberg's total zinc production to 1 million metric tons a year.

The smelter proposal follows the recent completion of a second expansion phase at the Gamsberg mining and concentrating operation, which doubled concentrate production capacity to 500,000 metric tons a year from an initial 250,000 metric tons. Kumar said that expanded capacity is expected to reach full output within about two months. The second-phase expansion cost approximately 10 billion South African rand, above an earlier estimate of roughly 7 billion rand; Kumar attributed the increase in part to the project's timing and to new safety and sustainability requirements imposed on its tailings storage facility.

Kumar also pointed to a global shortage of zinc concentrate as a reason for South Africa to process more of its own zinc domestically rather than export it in raw concentrate form, underscoring the rationale behind the proposed Gamsberg smelter. No timeline for a final investment decision on the smelter was given.