Vedanta is bullish

Forecasting a sustained pick-up in the construction sector in India, Anil Agarwal, Chief Executive Officer of the London-listed Metals and Mining Group, Vedanta Resources Plc. and founder of Sterlite Industries Ltd., says he is bullish about the metal sector in the country.

"We are committed to investing Rs 10,000 crore in India over the next two years to two-and-a half years. The funds for this have been generated from our public listing in the United Kingdom last year. The investments would be used to strengthen our presence in the metal sectors, particularly alumina, zinc and copper," Anil Agarwal told reporters here.

Agarwal, who participated in the investors' interactive meet with Finance Minister P Chidambaram, said he would not dismiss the possibility of listing Vedanta in India in the next few years.

"Why not? The possibility exists in the future," he said. Asked on what measures should be taken by the government to boost investment in the mining sector, Agarwal said, "I am of the opinion that the government should consider duplicating the oil sector exploration model by issuing block licences with regulatory approvals from all concerned ministries." He added the revenue on the licences could be on a shared basis between the company and the government.

He said Vedanta would be investing close to $800 million in setting up an alumina refinery with a capacity of 1-1.4 million tonnes per annum in Lanjigarh district in Orissa.

The refinery is slated to be commissioned by March, 2006. The company is also setting up a 245,000 tonnes per annum greenfield aluminium smelter in Korba. The project, which includes setting up of a captive power plant, is estimated to cost Rs 4,000 crore.

"We have also asked the Chhattisgarh state government to set up an alumina park in the state since the state has a huge potential in the sector," he said, adding the company was also exploring the option to set up another steel plant in Orissa.

Already companies such as South Korean giant Posco, along with BHP Billiton of Australia, have presented a proposal to the Centre to undertake $10.8 billion investment in Orissa.

Vedanta, he said, had also hiked its holding in Sterlite to 78.8 per cent, up from 60.4 per cent in April this year. "We are happy with this holding for the time being," he said when asked if he intended to hike Vendanta's holding further.

Agarwal said that with the setting up of an aluminum smelter, Balco would become the biggest player in the aluminum sector in India, overriding Nalco, which presently controls 25 per cent share in the market.

Sterlite had acquired 51 per cent government equity in Balco for Rs 551 crore in 2001, with the option to buy the remainder 49 per cent stake.