Wednesday, November 5, 2008

India firm to invest $100 million in Zambia copper, oil

By Shapi Shacinda. 01/10/2008 , LUSAKA (Reuters)

India's Sandesara Group signed an agreement on Wednesday with Zambian authorities to invest an initial $100 million in the southern African country's copper mining industry and in oil exploration.

Commerce and Trade Minister Felix Mutati said the deal would see the Indian firm invest in copper mining and oil exploration, and came a day after authorities said parliament had passed a new law regarding oil resources.

Mutati said Sandesara was in talks with the government and some foreign mining companies in a bid to revive small mining operations at some existing copper mines before venturing into greenfield mining of copper and cobalt.

Officials say some copper units have been abandoned by larger mining firms which own huge mining areas, but which utilise small portions of those areas.

"This commitment we have entered into places Sandesara Group to invest an initial amount of $100 million in mining and related activities. This is a platform for their expansion in Zambia," Mutati told journalists in Lusaka.

Mutati said Sandesara Group would process copper initially from some abandoned units of foreign mining firms operating in Zambia and later commence exploration of the minerals to start new operations in the mineral-rich country.

"We are in discussions with (investors) whose assets are laying idle in order to bring them into production," Mutati said but he declined to name the foreign mining firms adding, 'it is premature for now.'

Nitin Sandesara, the chairman for the Sandesara Group, said his firm which operates oil and gas facilities in India and other countries, would also in the long term seek to invest in power generation in Zambia.

A subsidiary of Sandesara Group, which Sandesara said had assets worth $5 billion worldwide, Sterling Oil Exploration and Energy Production Co. Ltd., currently operates in Nigeria.

"We plan to start (our operations) with copper mining before we can move on to other minerals in Zambia. We will also look at oil and gas," Sandesara said.