MIRA INFORM REPORT

Report Date :

15.06.2007

IDENTIFICATION DETAILS

Name :	KONKOLA COPPER MINES PLC

Registered Office :	Stand M/1408, Fern Avenue, P. O. Box Private Bag KCM (C) 2000, Chingola

Country :	Zambia

Date of Incorporation :	31 March 2000

Com. Reg. No.:	43628

Legal Form :	Public Limited Liability Company

Line of Business :	Mining of copper, cobalt, pyrite and anode slimes.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	KWACHA 10,000,000,000

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

COmpany NAME

KONKOLA COPPER MINES PLC

ADDRESS

Street : Stand M/1408, Fern Avenue

Town : Chingola

Country : Zambia

Telephone : (260 2) 350 000 / 350 026 (Corporate Relations) 350 087 (Finances) / 353 082

Fax : (260 2) 351 223 / 350 433

E-Mail : vinod.bhandawat@kcm.co.zm / samuel.equano@kcm.co.zm

Shortform Name

KCM

SENIOR COMPANY PERSONNEL

Name Position

Board of directors

1. N. Agarwal Chairman - Vedanta Resources Plc

2. K.K. Kaura Deputy Chairman - Vedanta Resources Plc

3. D. Bandyopadhyay Director - Vedanta Resources Plc

4. C.V. Krishnan Director - Chief Executive officer KCM

5. C. P. Baid Director - Vedanta Resources Plc

6. S. Georgala Director - ZCI

7. T.D. Kamwendo Director - ZCI

8. J.M.D. Patterson Director - ZCCM-IH

9. J.M. Chirolwa Director - ZCCM-IH

10. L.S. Nkhata Director - GRZ

11. S. Muwamba (Ms) Company Secretary - KCM

Executive Management

12. Kuldip K. Kaura Chief Executive Officer

13. Deb Bandyopadhyay Resident Director

14. Pramod Unde Chief Commercial Officer

15. Sophie Masupha Vice President - Human Resources

16. Samuel Equamo Vice President - Corporate Relations

17. Vinod Bhandawat Vice President - Finance

18. Maxwell Mutale General Manager - Nchanga IBU

19. Keith Kapui Operations Manager - Konkola IBU

20. David Ngandu General Manger - Nkana

21. Raj Kulkarni General Manager - Konkola Deep Mining Project

22. Dr Sixtus Mulenga Safety and Environment Officer

Total Employees

14,903

PAYMENTS

No complaints have been heard regarding payments from local suppliers or banks.

Subject was established in 2000 and is a subsidiary of Vedanta Resources Plc, of UK, which company is listed in London Stock Exchange since December 2003. The group is a diversified and integrated FTSE 250 metals and mining group with annual sales for 2006 of US DLRS 3.7 billion. The Group operations are located in India, Zambia and Australia.

Subject operates through business unit divisions : Konkola division, Nchanga division, KCM Nkana Division and KCM Smerterco Division.

In view of the company's ownership and we consider it is acceptable to deal with subject for LARGE amounts.

Opinion on maximum credit : KWACHA 10,000,000,000

Trade risk assessment : Normal

It is normal accepted practice for international suppliers to deal on secured terms with Zambian importers.

TRADE REFERENCES

NAME : TRADE IMPORT & EXPORT

PO Box : 6793

Town : Rogge Baai 8012

Country : South Africa

NAME : SHELL CHEMICALS

PO Box : 748

Town : Saxon Wold 2132

Country : South Africa

NAME : CYTEC

Street : Bowling Park Drive

Town : Bradford BD4 7TT

Country : UK

NAME : COGNIS

Town : Little Island

County : Cork

Country : Ireland

NAME : TRADEDRIVE LIMITED

Street : 9 Market Street

Town : Windsor

County : Berkshire SL4 1pB

Country : UK

PRINCIPAL BANKERS

NAME : STANDARD CHARTERED BANK ZAMBIA LTD

Branch : Excel Banking Centre

Street : Kwacha Road, ZNCB Building

P.O. Box : 10136

Town : Chingola

Telephone : (260 2) 313 827 / 312 088 / 312 271

Fax : (260 2) 312 636

Account Number : 8700211453100

The company also has an account with the following banks :

1. Barlcays Bank of Zambia Ltd

2. Citibank Zambia Ltd

3. Stanbic Bank Zambia Ltd

FINANCIAL INFORMATION

Consolidated balance sheets * as at 31 December 2003 showed :

Goodwill : US DLRS 55,995,000 - 2002 - exact

: 0 - 2003

Tangible fixed assets : US DLRS 206,794,000 - 2002 - exact

: US DLRS 290,345,000 - 2003 - exact

Deferred secondary development : US DLRS 29,159,000 - 2002 - exact

expenditure : US DLRS 25,771,000 - 2003 - exact

Deferred tax assets : US DLRS 87,453,000 - 2002 - exact

: US DLRS 87,520,000 - 2003 - exact

Total non current assets : US DLRS 379,401,000 - 2002 - exact

: US DLRS 398,636,000 - 2003 - exact

Stocks : US DLRS 88,308,000 - 2002 - exact

: US DLRS 87,864,000 - 2003 - exact

Debtors : US DLRS 46,658,000 - 2002 - exact

: US DLRS 46,924,000 - 2003 - exact

Bank and cash balances : US DLRS 37,695,000 - 2002 - exact

: US DLRS 2,553,000 - 2003 - exact

Total current assets : US DLRS 272,661,000 - 2002 - exact

: US DLRS 137,341,000 - 2003 - exact

Trade creditors : US DLRS (40,321,000)- 2002 - exact

: US DLRS (19,525,000 - 2003 - exact

Other creditors and : US DLRS (12,410,000)- 2002 - exact

accrued expenses : US DLRS (39,826,000)- 2003 - exact

Short term loans and : US DLRS (5,824,000)- 2002 - exact

bank overdraft : US DLRS (25,933,000)- 2003 - exact

Taxation : US DLRS (123,000)- 2002 - exact

: US DLRS (33,000)- 2003 - exact

Total current liabilities : US DLRS (58,678,000)- 2002 - exact

: US DLRS (85,317,000)- 2003 - exact

Net current assets : US DLRS 113,983,000 - 2002 - exact

: US DLRS 52,024,000 - 2003 - exact

Total assets less current : US DLRS 493,384,000 - 2002 - exact

liabilities : US DLRS 450,660,000 - 2003 - exact

Long term loans : US DLRS (35,033,000)- 2002 - exact

: US DLRS (35,142,000)- 2003 - exact

Deferred taxation : 0 - 2002

: US DLRS (747,000)- 2003 - exact

Provisions for liabilities : US DLRS (92,632,000)- 2002 - exact

and charges : US DLRS (89,429,000)- 2003 - exact

Total Liabilities due after : US DLRS (127,665,000)- 2002 - exact

more than one year : US DLRS (125,318,000)- 2003 - exact

Net assets : US DLRS 365,719,000 - 2002 - exact

: US DLRS 325,342,000 - 2003 - exact

Share capital : US DLRS 64,784,000 - 2002 - exact

: US DLRS 64,784,000 - 2003 - exact

Share premium : US DLRS 473,568,000 - 2002 - exact

: US DLRS 473,568,000 - 2003 - exact

Deficit on revenue reserves : US DLRS (180,133,000)- 2002 - exact

: US DLRS (216,774,000)- 2003 - exact

Capital reserves : US DLRS 7,500,000 - 2002 - exact

: US DLRS 7,500,000 - 2003 - exact

Other reserves : 0 - 2002

: US DLRS (3,736,000)- 2003 - exact

Shareholders interest : US DLRS 365,719,000 - 2002 - exact

: US DLRS 325,342,000 - 2003 - exact

CONSOLIDATED PROFIT & LOSS ACCOUNT

Turnover : US DLRS 394,096,000 - 2002 - exact

: US DLRS 356,308,000 - 2003 - exact

: not given - 2004 -

: US DLRS 249,200,000 - 2005 - exact

: US DLRS 703,400,000 - 2006 - exact

Cost of Sales : US DLRS (352,139,000)- 2002 - exact

: US DLRS (286,251,000)- 2003 - exact

Gross profit : US DLRS 41,957,000 - 2002 - exact

: US DLRS 70,057,000 - 2003 - exact

Other operating expenses : US DLRS (69,207,000)- 2002 - exact

: US DLRS (75,350,000)- 2003 - exact

Goodwill write back/ : US DLRS (1,806,000)- 2002 - exact

(amortisation) : US DLRS (1,806,000)- 2003 - exact

Negative goodwill written off : 0 - 2002

: US DLRS 474,000 - 2003 - exact

Depreciation : US DLRS (30,272,000)- 2002 - exact

: US DLRS (29,539,000)- 2003 - exact

Operating loss : US DLRS (59,328,000)- 2002 - exact

: US DLRS (32,552,000)- 2003 - exact

Other income : US DLRS 4,696,000 - 2002 - exact

: US DLRS 2,011,000 - 2003 - exact

Net exchange gain : US DLRS 271,000 - 2002 - exact

: US DLRS 68,000 - 2003 - exact

Impairment adjustment : US DLRS (104,611,000)- 2002 - exact

: 0 - 2003

Write back of provisions : US DLRS 7,676,000 - 2002 - exact

: 0 - 2003

Loss before finance costs : US DLRS (151,296,000)- 2002 - exact

and taxation : US DLRS (30,473,000)- 2003 - exact

Interest expense : US DLRS (8,152,000)- 2002 - exact

: US DLRS (1,121,000)- 2003 - exact

Loss before taxation : US DLRS (159,443,000)- 2002 - exact

: US DLRS (31,594,000)- 2003 - exact

: not given - 2004 –

Profit before taxation : US DLRS 76,000,000 - 2005 - exact

: US DLRS 206,300,000 - 2006 - exact

Taxation (charge) credit : US DLRS 58,899,000 - 2002 - exact

: US DLRS (5,047,000)- 2003 - exact

Loss for the year : US DLRS (100,549,000)- 2002 - exact

: US DLRS (36,641,000)- 2003 - exact

* The above figures apply to the subject and its former subsidiary, KCM Smerteco Ltd, now subject's division.

The following consolidated financial information as at 31 March applies to Vedanta Resources Plc, subject's parent company :

2006 2005

(in millions of US DLRS) ASSETS

Non-current assets

Goodwill 12.1 12.2

Property, plant and equipment 2,763.0 2,288.6

Interest in associate 1.8 3.3

Financial asset investments 27.1 24.8

Other non-current assets 27.3 34.6

Other financial assets (derivatives) 63.2 -

Deferred tax asset 71.9 90.0

2,966.4 2,453.5

Current assets

Inventories 535.0 337.7

Trade and other receivables 593.0 339.6

Other current financial assets 49.0 -

Liquid investments 244.4 262.0

Cash and cash equivalents 1,847.3 1,185.6

3,268.7 2,124.9

TOTAL ASSETS 6,235.1 4,578.4

LIABILITIES

Current liabilities

Short term borrowings (239.8) (194.7)

Convertible loan notes - (23.7)

Trade and other payables (942.5) (675.0)

Other current financial liabilities (114.7) -

Provisions (12.2) (37.0)

Current tax liabilities (34.7) (15.1)

(1,343.9) (945.5)

Net current assets 1,924.8 1,179.4

Non-current liabilities

Medium and long term borrowings (1,236.0) (1,303.5)

Convertible loan notes (600.4) -

Trade and other payables (15.6) (41.2)

Other financial liabilities (derivatives) (93.4) -

Deferred tax liabilities (286.9) (234.9)

Retirement benefits (38.2) (38.6)

Provisions (222.5) (208.6)

Non-equity minority interests (59.4) (59.4)

(2,552.4) (1,886.2)

Total liabilities (3,896.3) (2,831.7)

Net assets 2,338.8 1,746.7

Equity

Share capital 28.7 28.7

Share premium account 18.6 18.6

Share based payment reserves 4.1 2.5

Convertible bond reserve 123.3 -

Hedging reserves (29.1) -

Other reserves 213.1 43.9

Retained earnings 1,058.4 1,016.8

Equity attributable to equity holders of1,417.1 1,110.5

the parent

Minority interests 921.7 636.2

Total equity 2,338.8 1,746.7

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Group turnover : US DLRS 1,289,500,000 - 2004 - exact

: US DLRS 1,884,200,000 - 2005 - exact

: US DLRS 3,701,800,000 - 2006 - exact

Cost of sales : US DLRS (973,900,000)- 2004 - exact

: US DLRS(1,414,800,000)- 2005 - exact

: US DLRS(2,591,400,000)- 2006 - exact

Gross profit : US DLRS 315,600,000 - 2004 - exact

: US DLRS 469,400,000 - 2005 - exact

: US DLRS 1,110,400,000 - 2006 - exact

Administrative expenses : US DLRS (60,100,000)- 2004 - exact

: US DLRS (112,000,000)- 2005 - exact

: US DLRS (127,000,000)- 2006 - exact

Other operating income : US DLRS 17,200,000 - 2004 - exact

: US DLRS 25,900,000 - 2005 - exact

: US DLRS 41,500,000 - 2006 - exact

Group operating profit : US DLRS 237,100,000 - 2004 - exact

: US DLRS 331,800,000 - 2005 - exact

: US DLRS 943,800,000 - 2006 - exact

Profit before taxation : US DLRS 233,400,000 - 2004 - exact

: US DLRS 332,300,000 - 2005 - exact

: US DLRS 934,700,000 - 2006 - exact

Tax on profit : US DLRS (76,000,000)- 2004 - exact

: US DLRS (97,600,000)- 2005 - exact

: US DLRS (280,400,000)- 2006 - exact

Profit for the financial : US DLRS 72,300,000 - 2004 - exact

: US DLRS 120,300,000 - 2005 - exact

: US DLRS 654,300,000 - 2006 - exact

Financial year ends 31 March.

LEGAL STATUS AND HISTORY

Date Started : 31 March 2000

History : The company was established in Zambia on 31 March 2000 following the privatisation of ZCCM’s Konkola, Nchanga, and Nampundwe mines, when Anglo American plc, UK (AAplc) led a consortium of the International Finance Corporation (IFC) and the Commonwealth Development Corporation (CDC) and acquired 80% of shares in the subject company. On 16 September 2002 subject undergone restructuring and a change of ownership, ended in 2004. Since 5 November 2004 the subject's shareholders are: Vedanta Resources plc (51.0%) ZCI Holdings S.A. (28.4%) and ZCCM-Investment Holdings Plc (20.6%).

C.R. No. : 43628

Authorised Capital : US DLRS 300,000,001

Paid up Capital : US DLRS 70,386,775.73

Public Limited Liability Company with the following shareholders :

Percentage

1. Vedanta Resources Holdings Limited (VRHL) 51.0 %

(Holding company)

(wholly owned by Vedanta Resources PLC listed

on London Stock Exchange)

2. ZCI Holdings S.A. 28.4 %

Luxemburg

3. ZCCM-Investment Holdings Plc 20.6 %

4. Government of the Rupublic

of Zambia 1 special share

Parent Company

Vedanta Resources PLC

Berkeley Street No. 16

London W1J 8DZ

Tel: (44 20) 7499 5900

Fax: (44 20) 7491 8440

Affiliates of Parent Company

1. Bharat Aluminium Company Limited (BALCO) (38.7%)

India

2. Sterlite Copper Mines of Tasmania Pty Limited (CMT) (75.9%)

Australia

3. Hindustan Zinc Limited (HZL) (49.3%)

India

4. The Madras Aluminium Company Limited (MALCO) (80.0%)

India

5. Monte Cello BV (MCBV) (75.9%)

The Netherlands

6. Monte Cello Corporation NV (MCNV) (100.0% )

Netherlands Antilles

7. Sterlite Industries (India) Limited (Sterlite) (75.9%)

India

8. Sterlite Opportunities and Ventures Limited (SOVL) (75.9%)

India

9. Sterlite Paper Limited (SPL) (75.9%)

India

10. Thalanga Copper Mines Pty Limited (TCM) (75.9%)

Australia

11. Twin Star Holdings Limited (Twin Star) (100.0%)

Mauritius

12. Vedanta Alumina Limited (VAL) (92.9%)

India

13. Vedanta Resources Holdings Limited (VRHL) (100.0%)

14. Vedanta Resources Finance Limited (VRFL) (100.0%)

15. Vedanta Resources Cyprus Limited (VRCL) (100.0%)

Cyprus

16. Vedanta Finance (Jersey) Limited (VFJL) (100.0%)

Jersey

ACTIVITIES

The Company is involved in the following activities :

Mining of copper, cobalt, pyrite and anode slimes.

Subject operates the following integrated business unit divisions :

1. Konkola Division

2. Nchanga Division (including the Chingola refractory ore stockpiles)

3. KCM Nkana Division (KCM Nkana Integrated Business Units) :

It comprises four operating units namely, Smelter, Refinery, Acid Plant and Support Services specific to KCM-Nkana.

The Nkana Smelter is the largest primary copper production plant in Zambia. The plant treats concentrates mainly from Nkana, Nchanga and Konkola mines which are wholly owned by KCM to produce up to 150,000 tonnes of new copper.

Nkana Smelter:

The smelter produces high grade anodes, which are electrolytically refined. Sulphur dioxide gas produced by the Converters is converted into sulphuric acid which is then used at the Tailings Leach Plant, Nchanga for recovering oxide copper. The smelter also produces discard slag from the reverbs that is rich in cobalt which is stored for future reclamation.

Nkana Refinery :

The Nkana Copper Refinery produces electrolytically refined copper in the form of cathodes. The copper meets the LME premium quality grade.

The tankhouse has a capacity of about 180,000 tonnes of finished copper per annum.

Nkana Acid Plants :

There are two single contact sulphuric acid plants at Smelterco, namely No. 3 and No.4 plants. No.3, the largest is still operational.

The plant has a design capacity of 1,050 tonnes per day acid.

4. KCM Smerterco Division

Production capacity :

Refined copper 220 00MT p.a.

Pyrite 90 000T p.a.

Anode slime 250 250T p.a.

Production : copper cathodes: 68,000 tonnes - 2005 (5 months)

164,000 tonnes - 2006

mined metal : 99,000 tonnes - 2006

Imports from South Africa, UK, France, Sweden, Canada, USA, Australia and India.

Exports to China (including Hong Kong), Egypt, Saudi Arabia, Thailand, Pakistan, South Korea and India.

FACILITIES

The Company has the following facilities :

Rented head office premises located at the heading address and additional offices in Lusaka and in Chililabombwe (see "Branch Offices" below).

Subject has 3 mines : Konkola Mine, Nchanga Mine and Nampundwe Pyrite Mine.

BRANCH OFFICES

1. Konkola Integrated Business Unit (IBU)

Chililabombwe

Tel: (260 2) 350 001-3

Fax: (260 2) 351 234

Comprises four operating units, namely No 1 shaft, No 3 shaft, the

Concentrator and Support Services specific to Konkola Mine.

2. KCM Nkana Integrated Business Unit (IBU)

Kitwe

Tel: (260 2) 350 001-3

Fax: (260 2) 351 234

Comprises four operating units namely, Smelter, Refinery, Acid

Plant and Support Services specific to KCM-Nkana

3. Nchanga Integrated Business Unit (IBU)

Chingola

Tel: (260 2) 350 001-3

Fax: (260 2) 351 234

Comprises five operating units, namely, Nchanga Open Pit, Nchanga

Underground, Nchanga Concentrators (East Mill and West Mill) the Tailings Leach Plant (TLP) and Support

Services specific to Nchanga Mine.

4. Nampundwe Integrated Business Unit (IBU)

Lusaka

Tel: (260 2) 350 001-3

Fax: (260 2) 351 234

Comprises three operating units namely, Underground Mine,

Concentrator and Support Services specific to Nampundwe Mine.

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions