Vedanta plans Rs 7,000-cr aluminium smelter in OrissaPublished by MAC on 2005-02-10
Vedanta plans Rs 7,000-cr aluminium smelter in Orissa
Hindu Business Line
10 February 2005
Vedanta Resources Ltd, the London-based holding company of Sterlite group, on Thursday announced plans to invest Rs 7,000 crore in India to set up a five-lakh-tonne-per-annum greenfield aluminium smelter in Orissa. The project also includes a 1,000-MW power plant.
This investment is in addition to Vedanta's ongoing investments of Rs 10,000 crore in Sterlite (copper), Balco (aluminium), Hindustan Zinc (zinc) and Vedanta Alumina (alumina).
Vedanta, which raised $825 million last year through a London Stock Exchange listing, is currently setting up a 1.4-million tonne per annum alumina refinery in Orissa.
Announcing the new investment plans, Mr Anil Agarwal, founder and CEO of Vedanta, said: "This is a major step in our vision to create 1 m.t. of aluminium capacity to meet the growing demand and establish India as a major player in the global resource industry."
The group has sufficient resources to fund this project, although the debt-equity ratio would be 40:60, officials said.
"We have brought in foreign direct investment of $1.5 billion to fund our existing projects. The success of these projects will attract international investors to India's metals and mining industry," Mr Agarwal said.
"The company's ongoing expansion projects of Rs 10,000 crore are fast approaching completion as scheduled. After taking over the state-owned Hindustan Zinc Ltd, its cost of production declined to $560 per tonne from $800 per tonne," he said.
The new aluminium smelter project in Orissa marks the beginning of the next phase of Vedanta's strategy in the aluminium sector, as the project would be implemented in two phases over the next 3-5 years.
The first phase will include setting up a 2,45,000-tpa smelter with associated power facilities. Initial project development work, including land acquisition, feasibility studies and Government approval, is under way, he said.
The plans include increasing copper production from 1.80 lakh to 3 lakh tpa in Tuticorin (Tamil Nadu); zinc production from 2.20 lakh to 4 lakh tpa at Chanderiya in Rajasthan; aluminium production from 1 lakh to 3.45 lakh tpa at Korba in Chhattisgarh and the greenfield project of the 1-1.4 million-tpa alumina refinery at Lanjigarh in Orissa.
After the completion of these projects, Vendanta will be among the top five producers of refined copper, top six producers of zinc and top 10 producers of aluminium in the world, he said.
"We have invested $652 million of our $2.2-billion capital programme and further significant progress will be made in the remaining period of this financial year. The copper expansion is ready to start production on receipt of environmental clearance and the zinc expansion is due to be commissioned in the first half of the next financial year, followed by the expansions at Balco and Vedanta Alumina in 2006 and 2007 respectively," Mr Agarwal said.
Vedanta recently acquired a 51-per cent stake in Zambian copper company Konkola Copper Mines, which produces 2 lakh tpa of refined copper with captive mines.