Mining company Vedanta Resources has announced that it is reviewing operations at its Zambian copper unit, citing a slump in metal prices and the introduction of higher royalties.

According to Vedanta, the revival of operations at its Konkola copper mines unit is due to lower copper prices, the VAT refund issue and changes to the country’s royalty regime.

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In January, Zambia introduced a new tax system that will take mineral royalties up from 6% to 20% for open pit operations and to 8% for underground mines, Bloomberg reported.

The Zambia Government is said to have committed more than $600m in VAT refunds to various mining companies, including Vedanta.

"I’ll be speaking to government officials next week on how we can try to implement some of those projects to maintain our cashflows."

Konkola copper mines unit CEO Steven Din told Bloomberg: "We are looking at restructuring assets and I’ll be speaking to government officials next week on how we can try to implement some of those projects to maintain our cashflows."

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Vedanta noted that the increased royalties would have an impact of about $15m on pre-tax profit in the three months through 31 March.

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Vedanta, which may plan any production or staff cuts at its Konkola copper mines unit, did not reveal what the operation review entailed or how long it would take.

The company said: "We continue to engage with the government to resolve the issues relating to VAT refunds.

"We are also reviewing our operations in the light of lower copper prices, the VAT refund issue and the changes to royalty regime."

London listed diversified global natural resources company Vedanta Resources produces aluminium, copper, zinc, lead, silver, iron ore, oil and gas and commercial energy.

The company has operations in India, Zambia, Namibia, South Africa, Ireland, Liberia, Australia and Sri Lanka.