Vedanta to invest Rs 43,000 cr in expansion

The group also has plans to spend Rs 50,000 crore on power generation.

Vedanta Resources, billionaire Anil Agarwal’s metal and mining company, has planned large expansions and acquisitions to enter the top five league in the global production of aluminium, copper and zinc by 2013.

The London-listed giant will spend Rs 43,000 crore to enhance its capacity, in addition to its Rs 50,000 crore plan in power generation.

Hindustan Zinc, its subsidiary, will achieve the first position in that sector by next year, beating the current largest player, Xstrata, which is based in Switzerland. Vedanta Aluminium, currently the 14th biggest player in the world, is adding capacity in Orissa and Chhattisgarh to become fourth largest globally. With the proposed acquisition of Asarco and new mine projects, the group’s copper production would increase to one million tonnes by 2012, making it third largest in the world.

“By 2013, the Vedanta group would be among the top five metal producers in the world, as per our expansion plan,” said chairman Anil Agarwal. The company has $6 billion cash on its books.

At present, Xstrata has a zinc production capacity of 7,36,000 tonnes per annum (TPA), while Hindustan Zinc is the second with a capacity of 6,69,000 TPA. As the Indian major is adding another 2,10,000 TPA capacity at Rajpura Dariba in Rajasthan, to be completed by early next year, the total capacity will shoot up to 8,79,000 TPA, said company officials.

In aluminium, Rio Tinto is the largest producer, after the acquisition of Alcan in 2007, with 4.32 million TPA capacity. UC Rusal, Alcoa and Chalco are the next three. With the proposed doubling of the capacity of Balco, a Vedanta subsidiary, and Vedanta Aluminium’s new project in Orissa, the group aims to produce 2.5 million TPA by 2013.

“Vedanta has 8,00,000 TPA copper production capacity, including its Zambian facility. If the group could acquire Asarco, the capacity will rise to 1.05 mt, which will ensure it third place in the world top list,” said sources.

The group, which acquired Sesa Goa and Dempo’s iron ore assets, is planning to produce 25 million TPA of ore in India. Currently, it has a capacity of 16 mt. The production capacity of Dempo, not yet defined, will further enhance the figure, cementing its position as the largest private producer in the country.