Vedanta Limited, the largest Indian investor in South Africa’s mining industry, recently signed two agreements with the state of Gujarat of India to set up a semiconductor fabrication plant, commonly referred to as a fab unit, a display fab unit, and a semiconductor assembling and testing unit in Ahmedabad in western India.
The project is anticipated to attract electronics ecosystem players across the value chain which entails manufacturers of highly sophisticated and sensitive equipment, materials (high purity gases, chemicals, wafers, photomasks), and equipment service providers, among others, that will put the state of Gujarat on the global silicon map. The project envisages a total investment of US$22 billion that is expected to provide employment to around 100 000 people.
The decision to set up the project in Gujarat comes after Vedanta and Foxconn announced in February they will form a joint venture in India. Vedanta will hold 60% of the equity in the joint venture while Foxconn will own 40%. The joint venture will look at setting up a semiconductor manufacturing plant in the next two years.
Speaking on the signing of the agreement, Vedanta chairman Anil Agarwal said: “We are delighted to announce that Gujarat will be the location for our display and semiconductor fab ventures. The state is well-known globally for being a manufacturing hub and I hope that India’s upcoming, cutting-edge electronics ecosystem will thrive, with every state benefitting to develop their electronic manufacturing hubs. We are privileged to take one step further in supporting Prime Minister Modi’s vision of Aatm Nirbhar Bharat in this strategic sector.”
In southern Africa, Vedanta Limited is represented by Vedanta Zinc International (VZI), which is a grouping of zinc assets located in South Africa, Namibia and Zambia. Black Mountain Mining (BMM) and Gamsberg Mine, both located in the Northern Cape Province, represent VZI’s South African operations. VZI has invested R6.5 billion into Gamsberg Phase I and has created around 1 000 permanent jobs in South Africa. VZI’s future in South Africa remains bright with a recent R7 billion investment into the expansion of Gamsberg Mine and a R650 million investment into their newest Iron Ore project at the Black Mountain Mining Operations. Both projects are promising to create around 1 500 jobs once fully operational. Also commenting on the agreement, VZI’s executive director and CFO, Pushpender Singla, said: “We are proud to be part of an organisation that is focused on growth, diversification and transforming communities. Vedanta is always open to new investment opportunities such as this one in other international locations like South Africa, Namibia and Zambia in partnership with the government. We are looking forward to leveraging some of the knowledge and resources from India’s joint venture investment and applying it to the southern African market. Vedanta is committed to all its current and future growth projects in southern Africa and is continuously looking for investment opportunities that will contribute to the region’s economic success.” Brian Ho, the VP of Foxconn Semiconductor Group, who was also present at the signing ceremony, said: “I am delighted that the semiconductor plant will come up in the industrial state of Gujarat. We applaud the efforts made by the Government of Gujarat, home of Prime Minister Narendra Modi, to attract semiconductor development and upgrade government efficiency. Located in the western part of India, Gujarat has been recognised for its industrial development, green energy, and smart cities. The improving infrastructure and the government’s active and strong support increases confidence in setting up a semiconductor factory. We look forward to working with our partners and the Gujarat leadership to further enhance the infrastructure required to cater to the ambitious semiconductor project.”