The Vedanta Threat IncreasesPublished by MAC on 2004-02-23
The Vedanta threat increases
As predicted on this web-site in January (London Calling Special) Vedanta, the new mining company launched with such clamour last year on London's Stock Exchange, isn't letting the grass grow under its feet (or that of many other people). This week, the company's chief architect, Anil Agarwal of Sterlite Industries, announced that, Vedanta/Sterlite is to up the capacity of its planned Orissa alumina refinery by another 400,00 tonnes per year, in the teeth of growing opposition from local people and human rights activists (see Tribal Villages Bulldozed as the Shadow of Vedanta Looms).
Even while the Indian Supreme Court debates whether or not it was legal for Sterlite to take over formerly government-owned Hindustan Zinc five years ago, Agarwal now threatens to bid for the 49% he doesn't yet own of Balco - the other publicly-owned minerals company which Sterlite came to control at around the same time.
Meanwhile Vedanta's London-based financial officer announces that the company intends to increase its holding of Sterlite to 75%, so long as it can raise new funds.
This is despite the fact that Vedanta's share price fell 11% in late January, when US investment bank Morgan Stanley warned that Vedanta was over-reaching itself.