Anil Agarwal-led mining and metals giant Vedanta Resources Ltd (VRL) has been hit with sharp allegations from US-based short-seller Viceroy Research LLC which has described the company’s Black Mountain Mining (BMM) unit in South Africa as a 'US$1 billion fiction'.
In a
report published on 18 August 2025, Viceroy accused Vedanta of inflated valuations, failed project execution, commercial insolvency and exploitative labour practices, raising fresh concerns about the conglomerate’s governance and long-term sustainability. The research group, known for taking strong short positions against global companies, claimed its on-the-ground investigation revealed BMM to be financially distressed, operationally mismanaged and deeply unpopular among workers and local communities.
At the centre of the report is Vedanta’s decision to carry the BMM asset on its books at more than US$1bn (billion). According to Viceroy, that valuation rests on 'fictional' assumptions of project completion and operational viability that have not materialised. Instead, BMM is facing endless project delays, a ballooning capital expenditure (capex) bill and even a winding-up petition filed by a major contractor who alleges the mine is unable to pay its debts.
BMM’s expansion projects were originally budgeted at about US$500mn (million), but Viceroy says the company has already spent US$566mn over the past four years with little to show in terms of operational outcomes. “Despite the overspend, projects remain years away from completion. Substantially every other project in VEDL’s pipe-dream pipeline has suffered similar delays,” the report noted.
The watchdog posed a stark question: Is this execution incompetence or capex fraud? Either way, it concluded that Vedanta’s shareholders and bondholders face significant risk from capital being sunk into ventures that are unlikely to deliver promised returns.
The allegations go beyond inefficiency. Viceroy cited legal filings showing that BMM faces a formal winding-up petition from a contractor claiming non-payment. If upheld, the petition could trigger insolvency proceedings in South Africa, complicating Vedanta’s already stretched financial position. Vedanta has been carrying a high debt load globally, with rating agencies and investors closely watching its refinancing abilities.
The Viceroy report also pointed to what it called 'promotion of failed leadership'. It singled out VRL chief executive officer (CEO) Deshnee Naidoo, now the group’s public face to investors. Ms Naidoo previously oversaw Vedanta Zinc International (VZI), which includes BMM. Her tenure, Viceroy alleged, was marked by operational disasters: a worker fatality at BMM and a slope collapse that forced the shutdown of the Skorpion zinc mine in Namibia.
Despite this track record, Ms Naidoo has been elevated to the top leadership role, a move Viceroy argues reflects a lack of accountability within Vedanta’s governance framework.
Perhaps the most damaging part of the report relates to Vedanta’s fraught relationship with its South African workforce. The National Union of Mineworkers (NUM), one of South Africa’s largest and most influential labour groups, has accused the company of engaging in 'modern-day corporate colonialism' and 'economic sabotage'.
The immediate flashpoint is Vedanta’s plan to outsource large parts of the BMM workforce, a move unions say would strip employees of housing, pensions, and other benefits. The plan has triggered mass protests, with workers warning of severe consequences if management pushes ahead.
For Vedanta, already struggling with reputational issues in India and elsewhere, the charge of 'corporate colonialism' resonates deeply in South Africa, where mining has long been entwined with social justice struggles.
Viceroy’s findings strike at Vedanta’s self-presentation as an ESG (environmental, social, and governance) champion. The company frequently highlights its sustainability commitments in investor presentations and corporate reports. Yet, Viceroy says its investigations painted a 'starkly different reality', one of unsafe conditions, community disputes, and questionable environmental practices.
This is not the first time Vedanta has faced accusations of greenwashing. In India, the company’s Tuticorin copper smelter in Tamil Nadu was shut down in 2018 after mass protests over environmental pollution, which turned deadly when police firing killed 13 demonstrators. In Namibia, the Skorpion zinc mine has been dogged by safety concerns and environmental risks. These incidents continue to haunt Vedanta’s global reputation.
“Any value that could be derived from BMM/Gamsberg will not be via Vedanta,” Viceroy concluded, suggesting that even if the mine can eventually be turned around, Vedanta may not be the company to do it.
For long-time observers, the allegations about BMM fit into a broader pattern of Vedanta’s troubled overseas ventures. The group, controlled by billionaire Mr Agarwal, has frequently pursued aggressive acquisitions and expansion projects that later ran into operational, regulatory, or social hurdles.
In Zambia, Vedanta’s Konkola Copper Mines became embroiled in a bitter dispute with the Zambian government, which accused the company of tax evasion and environmental damage before moving to seize control of the asset in 2019. In Liberia, Vedanta faced criticism over iron ore concessions. And in India, beyond Tuticorin, communities around Vedanta’s mining operations in Odisha have opposed its expansion, citing environmental degradation.
The Viceroy report comes at a sensitive moment for Vedanta. The group has significant refinancing obligations due in the next two years. Credit rating agencies have flagged its elevated leverage and reliance on dividends from subsidiaries as risks. Against this backdrop, any doubts about the viability of a billion-dollar overseas asset like BMM could spook lenders and investors further.
In its conclusion, Viceroy cast the BMM saga not just as a financial misstep but as a multi-stakeholder failure. “VEDL has failed its shareholders, bondholders, employees, the South African government and its mining authority, the local community, and the environment,” the report declared.
The weight of such accusations—spanning financial mismanagement, governance lapses, labour exploitation and environmental risks—underscores the scale of Vedanta’s challenges in South Africa. For a company already carrying the scars of multiple global controversies, the Black Mountain blowout may prove one of its most damaging reckonings yet.
Last week, market regulator Securities and Exchange Board of India (SEBI) issued a warning letter to VEDL for non-compliance in relation to the modification of the scheme of arrangement filed with the stock exchange with respect to the withdrawal of part V of the scheme without prior written consent of SEBI. The regulator has warned the company to exercise caution in the future and forward the board’s comments to SEBI on satisfaction of corrective actions undertaken to ensure future compliance.
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