FY16 challenging for natural resources sector, says Vedanta

The liquidity for the group remains strong, with Rs 52,000 crore of cash and cash equivalents, Vedanta chairman said

Financial year 2015-16 was challenging for the natural resources sector due to falling commodity prices, said Navin Agarwal, chairman, Vedanta Ltd (earlier Sesa Goa), while addressing its 51st annual general meeting on Wednesday in Goa.

“During the year, Vedanta strengthened its ability to withstand volatility with record production and capacity ramp-up. Zinc, lead, aluminium, power and copper achieved record production.

In line with our focus on simplifying our corporate structure, the completion of the Vedanta Ltd and Cairn India merger remains a strategic priority,” Agarwal said.

During 2015-16, the cash flow was a little over Rs 11,000 crore, a threefold rise over a year. “This helped us reduce our net debt by over Rs 6,000 crore. The liquidity for the group remains strong, with Rs 52,000 crore of cash and cash equivalents,” he added.

Cairn India, Vedanta’s subsidiary, has started an enhanced oil recovery project at its Mangala oilfield in Rajasthan.

“We continued to maintain our standing as one of the lowest cost oil producers in the world. We see significant potential to increase gas production from the upcoming Raageshwari Deep Gas Project, where the recent hydro frack campaign was quite successful,” Agarwal said.

Vedanta was the first company to resume iron ore mining in Goa last year, after the earlier ban was lifted. “Going forward, we expect a much stronger contribution from our iron ore business,” he said.