Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Metals to oil conglomerate Vedanta Ltd expects annual revenue of $50 billion in the next two to three years, roughly double projected revenues for fiscal year 2023, as it looks to ramp up production, including metals used in electric car batteries, its chairman said.
Vedanta reported 1.327 trillion rupees ($16.05 billion) in revenues in the fiscal year that ended in March, up from 880.2 billion rupees a year earlier.
“We’ll go to $50 billion in two years’ time and this will increase the production of copper, aluminium, zinc,” Chairman Anil Agarwal told Reuters on the sidelines of an energy industry conference in Abu Dhabi.
Vedanta and Taiwan’s Foxconn in September signed an initial agreement to invest $19.5 billion to set up semiconductor and display production plants in Gujarat, the home state of Indian Prime Minister Narendra Modi.
Agarwal said the choice of Gujarat was decided after input from consultants as well as Foxconn and Vedanta teams, which looked at incentives, manpower and logistics in several states.
It is not immediately clear when a final agreement would be signed for the semiconductor plant. When asked about this, Agarwal said: “Foxconn people are working, we are working, but this is all done.”
He said Vedanta had total debt of $12 billion.
“We will be in two years’ time zero debt – two or three years’ time,” he said.
Vedanta is interested in potential collaborations with Saudi Arabia’s mining sector and talent pools there, Agarwal said, adding that countries in the Middle East were “very keen” to create an undersea electricity link with the Indian subcontinent.
“I’m very bullish on Middle East,” Agarwal said.
($1 = 82.7125 Indian rupees)
(By Yousef Saba; Editing by Jane Merriman)
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