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मंगलवार, जनवरी 19, 2010

Vedanta Group $2-bn expansion plan

The Anil Agarwal-promoted, $6.6-billion, Vedanta Group is planning to expand its metals business and is set to spend $2 billion(around Rs 9,000 crore) over the next two to three years to significantly enhance capacity. The company is looking to increase its aluminium-making capacity by 25 times, zinc by five times and silver by about 12 times.

“Vedanta is moving ahead to become a global leader in zinc-lead production, as we commission our third phase of expansion at Rajpura Dariba in Rajasthan. We also plan to produce 2.5 million tonne of aluminium, which would position Vedanta among the top five global aluminium producers,” Vedanta Group CEO MS Mehta told ET.

The company has already invested over Rs 40,000 crore to expand its metal business and would be spending another Rs 9,000-10,000 crore over the next three years to complete the first phase of its metal expansion plan.

Besides zinc and aluminium, Vedanta is also planning to expand its copper production to 1.2 million tonne a year, which would position the group among top five global copper producers.

The company’s silver production would also go up to 550 tonne within a few years, placing the group among the top ten global silver producers.

Vedanta has metal producing units in Chhattisgarh, Orissa, Rajasthan and Tamil Nadu and a copper facility in Zambia.

With the acquisition of iron-ore producer Sesa Goa, the group is now also into mining ore in Goa. The capacity of Sesa Goa is also slated to increase from current 15 million tonne to 50 million tonne by 2014. “The group has bought around $9 billion of foreign capital for various projects for investment in the country and is moving ahead to invest a total of about $20 billion for its metal, mining and power businesses,” Mr Mehta said.

As of December 1, 2009, the company’s cash reserves stood at $7.1 billion. It has already raised close to $4-billion debt in the last one year to fund its expansion. Besides metal, the company is also expanding its footprint in the power sector. A substantial portion of the $20-billion investment (about $8 billion) would be invested in its power business to take up capacity from current 2,000 mw to 11,000 mw in the next three years.

The power initiative will be rolled out by Sterlite Energy (SEL), a 100%-subsidiary of Sterlite Industries. Sterlite Industries is part of the Vedanta Group. SEL would function as the commercial power generation arm of the parent. Other group companies under Vedanta include Hindustan Zinc, BALCO, MALCO, Sesa Goa.


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