Viceroy Research says the Skorpion Zinc Mine in southern Namibia, which has been under care and maintenance since 2020, is a defunct and dismantled asset.
In its report dated 11 August 2025, Viceroy Research says that a team was on the ground in Namibia to verify whether Vedanta Resources can restart the mine and refinery within 18–21 months, as stated in the 2025 financial report. The report says that Skorpion—once a cornerstone of Vedanta’s African operations—has been inoperative since 2020 and displays “textbook” signs of asset decay.
Vedanta Resources acquired the asset in 2010, integrating it into its Zinc International division alongside operations in South Africa. Skorpion Zinc, located near Rosh Pinah in the //Karas Region, was commissioned in 2003 as a unique integrated operation, combining an open-pit zinc mine with a refinery using the solvent extraction–electrowinning (SX-EW) process to produce high-purity zinc.
Developed by Anglo American at a cost of approximately US$454 million (N$8.1 billion), the mine was one of the few in the world to treat zinc oxide ore directly.
At its peak, Skorpion produced around 150,000 tonnes of refined zinc per year and was a major employer and contributor to Namibia’s mining sector.
However, the operation faced declining ore grades, technical challenges, and, in 2020, significant pit-wall failures that forced the suspension of mining.
With stockpiled ore exhausted, the refinery was placed on care and maintenance, and plans were later announced to convert the facility to process zinc sulphide concentrates.
Conversion plan deemed not feasible
Viceroy Research says that despite a stated budget of US$220 million (N$3.9 billion) and an 18–24 month construction timeline, there is no indication that the sulphide conversion is feasible, nor has it commenced in any form. The report also notes that repeated public timelines have slipped while site conditions have deteriorated, and that Skorpion should be considered a liability requiring rehabilitation rather than a candidate for restart.
Viceroy says management has repeatedly indicated that reopening was imminent, but the site inspection found no maintenance, rehabilitation, or preparation activities consistent with a restart. A long-serving worker recalled that “from the year they closed they are talking about opening this year coming, then opening next year.”
Technical differences require a rebuild
The proposed conversion from oxide SX-EW to sulphide processing is described as not credible. The report emphasises that oxide and sulphide processing routes are fundamentally different flowsheets, requiring a near-complete rebuild—new comminution circuits, flotation, concentrate handling, off-gas systems, and associated utilities—rather than incremental upgrades to the existing SX-EW plant.
Power supply absent since 2021
Since the end of the Eskom contract in January 2021, the complex has had no viable industrial power source. There are no solar backup systems, substations, generators, or battery storage. The current draw from the grid is insufficient, even for care-and-maintenance operations, and no agreement with NamPower or installed generation assets exists to meet the demands of a sulphide refinery.
The report describes extensive physical degradation: evaporation ponds are dry and mineral-encrusted; clarifier and thickener tanks are dry and sedimented; and process circuits are inactive with no leachate movement. Preservation measures such as power continuity and equipment cycling are absent.
According to the report, the plant is fully inactive and heavily degraded, with corroded tanks, dry circuits, sedimented clarifiers, and no power supply. There is no evidence of site preparation, contractor mobilisation, material deliveries, or infrastructure upgrades.
Mining pit inaccessible and unsafe
On the mining side, multiple slope failures and collapsed benches have left the pit largely inaccessible for dewatering. Satellite imagery shows water accumulation at the pit bottom since at least May 2023, with no pumps, pipelines, or drainage measures in place. Bench access roads are in a degraded state, with no signs of recent maintenance or stability work.
Viceroy reports that no mobile equipment remains on site—no haul trucks, excavators, dozers, or even light vehicles. The mining workshop and vehicle depot are deserted and stripped, with staging areas empty or used for scrap storage. Interviews suggest the equipment and vehicles were salvaged or sold.
Staffing is minimal, with fewer than 40 part-time personnel remaining, none of whom are assigned to operations or pit safety. There are no geologists, engineers, or skilled workers on site, and the workforce functions as a caretaker crew rather than an operational standby team.
Ore reserves insufficient to justify restart
An internal report cited by Viceroy confirms less than eight months of recoverable ore remain in the existing pit.
With a high strip ratio and marginal economics, the report argues that the remaining ore cannot justify the capital outlay to restart mining.
It dismisses as unrealistic the idea of mining briefly before switching to imported concentrate.
Vedanta’s plan assumes hauling concentrate from Black Mountain/Gamsberg in South Africa to Skorpion for processing. Viceroy argues there is no viable heavy-haul corridor to sustain the required truck movements over time.
It outlines two potential routes, including a coastal road via Oranjemund, Port Nolloth, and Springbok, but rejects them as unsuitable for long-term concentrate transport to Rosh Pinah.
Valuation and financial concerns
Viceroy notes that the Skorpion complex is carried on the books at around US$70 million (N$1.25 billion). Yet, the conversion narrative supports a valuation exceeding US$1 billion (N$17.8 billion) for Black Mountain/Gamsberg.
It claims Zinc International’s assets are encumbered and that loans are secured against Vedanta’s stake in Hindustan Zinc Limited.
The report further says that Skorpion requires rehabilitation that has not been adequately provided and should be treated as an unquantified liability.
Historic cash flows and financing structure
The report also reviews historic cash flows, stating that before the 2020 wall collapse, THL Zinc Namibia sent funds upstream through intercompany loans. After the collapse, a non-cash “buyback” arrangement offset these loans, avoiding any return of funds to the now-idle operation.
Viceroy cites THL Zinc’s FY25 annual report, indicating a planned reopening in FY27 with a 21-month execution timeline, implying that permits, contractors, and long-lead procurement are in place.
However, the investigation found no hiring surge, no EPC mobilisation, no long-lead procurement, and no visible groundwork to suggest a rebuild is imminent.
Vedanta’s response
Vedanta rejected Viceroy Research’s allegations in various media reports, saying Skorpion Zinc was acquired in 2010 with a limited life but kept operating through investment and exploration until 2020, when it went into care and maintenance.
The company said the mine is undergoing a structured evaluation and feasibility studies for a restart, calling it a strategic African asset.
Vedanta also dismissed Viceroy’s broader claims as “baseless and malicious,” accusing the short-seller of using public information to spread misinformation and disrupt markets.
