Glencore Plc (GLEN) lodged an appeal after an arbitrator gave Vedanta Resources Plc (VED) 51 percent of a zinc sulfide deposit that adjoins their two mines in southern Namibia, according to a person with knowledge of the matter.
The Rosh Pinah zinc and lead mine, 80 percent owned by Glencore, was awarded the rest of the undeveloped Gergarub deposit earlier this year, entitling it to 49 percent of future earnings, said the person, who asked not to be identified because the matter is private. Both rounds of arbitration are taking place in South Africa, the person said.
The deposit, about 800 kilometers (497 miles) south of Namibia’s capital Windhoek, was discovered after Vedanta’s Skorpion zinc mine and refinery, then owned by Anglo American Plc (AAL), entered a joint-exploration agreement in 2004 with Rosh Pinah, which was controlled by South Africa’s Exxaro Resources Ltd. (EXX) at the time. Differing interpretations of that agreement prompted London-based Vedanta and Baar, Switzerland-based Glencore to seek arbitration, the person said.
Charles Watenphul, a spokesman for Glencore, declined to comment, while Vedanta didn’t respond to an e-mailed request for comment.
A decision on the development of Gergarub will be made in October after initial studies showed an ore body capable of supporting a mine for about 10 years.
Vedanta plans to create an integrated zinc and lead operation in Namibia and South Africa’s neighboring Northern Cape province, the location of its Black Mountain mine and undeveloped Gamsberg zinc deposit, Chief Executive Officer Tom Albanese said yesterday at a mining conference in London. Skorpion plans to prolong the life of its refinery by converting it to handle zinc sulfides, Managing Director Satish Kumar said in February.
While Vedanta would like to expedite the development of Gergarub, it’s not a priority for Glencore, the person said. The two companies also differ on whether to build a new concentrator at the deposit, or use an existing one at Rosh Pinah, 18 kilometers away.
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