MAC: Mines and Communities

Anil Agarwal elected India's "Business Leader of the Year"

Published by MAC on 2012-09-24
Source: Press Trust India, Economic Times

(Just don't mention Vedanta's appalling socio-environmental record)

Anil Agarwal, chair of Vedanta Resources plc, has been elected "Businessman of the Year" by a panel put together by India's Economic Times.

It's a risible decision, even by the panel's own narrow criteria.

For Mr Agarwal  hasn't even been able to persuade his political allies in Orissa to rescue his company's faltering Lanjigarh aluminium enterprise.

Back in May, Anil Agarwal faced a similar situation when two Northern organisations withdrew an "ethica business" award they were about to give him. See: A Third Strike finds Anil Agarwal "Out"

Odisha says it cannot supply bauxite to Vedanta Aluminium Limited immediately

Press Trust India

18 September 2012

BHUBANESWAR: Odisha is not in a position to immediately supply bauxite to Vedanta Aluminium Limited (VAL), the state government said today while the company had sought permission to shut down its refinery at Lanjigarh due to scarcity of raw material.

"The state government is not ready at the moment to supply bauxite to Vedanta's refinery at Lanjigarh. VAL's case in the matter of bauxite mining is pending in the Supreme Court ... They (VAL) are trying to arrange raw material for the plant," Chief Secretary B K Patnaik told reporters after attending the High Level Clearance Authority (HLCA) meeting.

Though the state has a vast reserve of the mineral, it is not able to explore it due to different reasons including forest clearance and mining plan, he said.

The state government's stand was made known after VAL formally informed the administration to allow it to shut down the refinery from December 5.

When contacted VAL Chief Operating Officer Mukesh Kumar said "We have already informed about our problem to the state government. Now our 1 mtpa refinery plant is running with only 50 per cent of its capacity due to bauxite scarcity."

Kumar said despite the state government's commitment to supply raw material to the refinery, it not given 'even one gram' of bauxite so far.

Under the situation, the company had already incurred Rs 2500 crore loss to run the Lanjigarh refinery and was not in a position to procure bauxite from other sources.

"We have run the plant for five years by bringing in bauxite from states like Andhra Pradesh, Jharkhand, Chhattishgarh and Gujarat ... We get some bauxite from our BALCO mines. And that source is not sufficient," he said.

The VAL COO in his letter requested the state government to help it by providing the raw material for running the refinery plant after December 5.

"If the situation improves by December 5, the company may not shut down the plant."

VAL has so far invested Rs 9,000 crore in the project which employes about 7,000 people, including direct jobs to 3,000 persons, Kumar said.

Though the company had applied for 26 bauxite reserves in the state, nothing was finalised yet due to different reasons, company sources said.

The company required 10,000 ton of bauxite every day to feed its 1mtpa refinery plant.

ET Awards 2012: Anil Agarwal is the Business Leader of the Year

Economic Times

9 September 2012

Business Leader of the Year: Anil Agarwal, Vedanta Group

The award seeks to honour a leader who has clearly demonstrated a strategic direction for success, and pursued a vision

Anil Agarwal can't forget that day in the mid-1970s when he came to Mumbai and didn't find it easy entering one of the city's five-star hotels. Reason: the 19-year-young metal dealer from Patna couldn't speak English.

Today, the 58-year-old chairman of the $11.4-billion, London-headquartered Vedanta Resources uses the Queen's language to illustrate his ambition of creating a diversified natural resources conglomerate, with presence in metals, oil and gas, power and mining.

In end-June, Agarwal crossed a crucial barrier in his quest to assemble all his Indian assets under one roof. The approval of shareholders of Sesa Goa and Sterlite Industries to merge the two companies paves the way for Agarwal to make Sesa Sterlite the main operating company - or, as Agarwal says, "the growth vehicle of the group".

It's growth in trying times that tilted the balance in Agarwal's favour when the jury selected him as the Business Leader of the Year. They applauded Agarwal's effort to clinch the $8.7-billion acquisition of oil & gas company Cairn India in December 2011; the transaction got delayed by more than a year after the announcement due to a disagreement over royalty payments.

"In the natural resource space, our country offers so much potential and opportunity," said Agarwal, a day after the jury declared him Business Leader of the Year. "Cairn is a worldclass asset with the potential to play a very important role in the country's energy security."

Agarwal's growth story is different from typical first-generation entrepreneurs like Kishore Biyani and GM Rao, who have expanded within the country with domestic capital. It's not similar either to that of the established business houses like the Tatas and the Aditya Birla group, which grew beyond India through highticket acquisitions.

Agarwal expanded mostly in India - although he has bought assets overseas also - with the money raised in global markets. He has raised $12.5 billion overseas capital for investment in India over the past seven years.

His acquisition spree started in 1976 with a jelly-filled cable company, which he later renamed Sterlite Industries. After setting up a copper plant and a copper smelter through Sterlite, Agarwal bought a series of companies in India and abroad. With state-run undertakings like Hindustan Zinc and Balco and private companies like Malco, Sesa Goa and Cairn, Agarwal has proved his mettle at building an empire by buying assets.

Beyond Indian shores, Agarwal set up copper operations in Australia and Zambia, zinc in Namibia, Ireland and South Africa, and iron ore in Liberia. Net result: he is the world's largest integrated producer of zinc and lead, and amongst the biggest in copper, iron ore and silver.

However, his acquisition story is not unblemished. He made two abortive bids - first to acquire Kolkata-based Indian Aluminium, which eventually went to the Aditya Birla group; the other, an attempt to buy US copper miner Asarco, which its estranged parent Grupo Mexico took over.

An acquisition that didn't quite work out was that of India Foils, which Agarwal later sold to Ess Dee Aluminium.

The proposed merger of Sesa Goa and Sterlite Industries, which is expected to receive all regulatory nods by December, is not just of two companies; it collapses all the assets of Vedanta's listed and unlisted companies in India - Sesa Goa, Sterlite, Vedanta Aluminium, Malco, Balco and Hindustan Zinc - into Sesa Sterlite. The new company will also own the group's majority stake in Cairn India.

In 2011, the earnings before interest, depreciation, taxation & amortisation of the combined entity stood at $5.3 billion. Agarwal says that figure should hit $10 billion in two years.

Agarwal has his hands full battling criticism from another quarter: environmentalists, ranging from activists in Maharashtra, who forced him to relocate to Tuticorin in Tamil Nadu for a copper smelter, to tribals in Odisha, who delayed his plans for an alumina refinery.

"Only resources can help eradicate poverty," Agarwal had said when quizzed about environmental risks. "We (India) have to use our resources in a sustainable manner for our development."

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