Vedanta will go ahead with its proposed $2-billion capex plan lined up for various businesses, including aluminium, oil & gas and zinc, for the current fiscal even as the metals and mineral prices considerably dipped as a fall-out of Russia’s Ukraine invasion and demand slowdown in China.
International base metal rates have plunged up to 32% between March and July, as mounting concerns over a demand slowdown in Covid-hit China put a lid on the commodity prices that had seen a spike immediately after the Ukraine war in late February.
“We are going ahead (with the capex target for the current fiscal). We cannot stop the project in between and these are all the brownfield projects where the returns are very good and this will make our operation more effective, more productive, more efficient,” Vedanta’s CEO Sunil Duggal told reporters at a Ficci-NMDC seminar.
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Duggal said metal prices have come down because of many geo-political events, but the fundamentals are still string and as a result, prices are “going to go up in the coming days”.
On whether Vedanta will take part in the proposed open offer through which the government intends to sell its residual 29.53% stake, Duggal said, “As per the law we cannot acquire more than 5% stake, but it’s a Board matter and the Board will decide.”
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In 2002, Vedanta (earlier known as Sesa Sterlite) bought a 26% stake in HZL, India’s largest zinc/lead miner. It exercised the first call option in 2003 and acquired an 18.9% additional stake in HZL. Vedanta later acquired another 20% stake in the company through an open offer, increasing its shareholding to 64.92%.
Addressing shareholders, Vedanta’s chairman Anil Agarwal had said on August 10 that the company was looking at building capacities across zinc, oil & gas and aluminium businesses with around $2-billion capex for the current fiscal.