You have invested billions of dollars in the Indian oil & gas and mining sectors. Yet, the group is under attack from politicians, court cases and environmental groups. Does this frustrate you?
There are issues but I am quite bullish on India. The government has taken steps in the past few months to kickstart the economy. The only way forward is to auction natural resources and let market forces play. India has huge resources of iron ore, gold, and oil & gas. There is no reason why we should not have 10 more steel plants in the country, each with 10-mt capacity. The global aluminium production cost is $2,200 a tonne. India can produce at half the price, at around $1,200-1,300. The country also has its own gold mines in Kolar and Hutti and we should exploit these, instead of importing gold.
After Cairn India, will you bid for more oil & gas assets and other natural resources in India?
Yes. It is absolutely necessary for us to keep on investing in the Indian oil & gas sector. When I go abroad, I see people talking about Rio Tinto, Billiton and other big resources firms. We are striving to be in the same league in India. We want Sesa Sterlite to represent India across the world as a metal giant. We are also bullish on copper in Africa. Cairn will raise its production in a big way, to close to 215,000 barrels of oil a day. From Cairn alone, the Indian government will earn taxes and royalties of close to Rs 60,000 crore a year in the next few years.
I am expecting close to $12-13 billion of earnings for Vedanta in the next two-three years, compared with around $5.6 billion now. The cost of production in oil & gas for us is around $3 a barrel in India. So, we should be investing more in developing Indian oilfields. We will be bidding for oil & gas assets in India, besides coal assets to feed our power plants that are generating 10,000 Mw of power each year. We also want to bid for iron ore in India.
Vedanta invested around Rs 10,000 crore in Odisha’s Kalahandi district but the project is not getting any raw material due to environmental issues. When do you expect the work to restart?
The matter is in the Supreme Court, so I can’t comment. But the Odisha government is taking steps to allocate bauxite from other mines. Former prime minister, Rajiv Gandhi, always wanted Kalahandi to prosper and that’s why we invested Rs 10,000 crore in setting up a world-class aluminum plant. When we went there, there was nothing — no roads, schools or hospitals. Today, everything is there. I hope to restart work in the next few months. According to the Indian mythology, Sita was put to test once. But we are being put to test again and again.
You have made an offer to buy back the government’s share in Hindustan Zinc and in Balco. What’s the status of the buy-back plan?
When we took over the government’s stake in Hindustan Zinc, the company had a residual life of less than five years, as it was losing money. Today, the company has turned around and is making high profits. We have made a Rs 17,000 crore offer to the government to buy the HZL stake. This is against the call option under which the government could sell us the residual stake at Rs 500 crore. We are expecting the government to take a step by March this year. Even if the government wants to remain equity investor in the company, we will be happy.
You are now 60, and you have already made plans to retire from the group… what will you do next?
Yes, I will retire in the next three years as the executive chairman of the group and will continue as a non-executive chairman. I want a professional CEO to run the operations of Vedanta. I will be spending a lot of time in social work in India. I would like to partner with the Indian government which is spending close to Rs 20,000 crore in children welfare schemes. We are already running 50,000 Balwadis in India in which 700,000 children are getting education. I also want to set up a world class university in India on the lines of Yale and Harvard. And I will also invest a lot of time in issues related to women empowerment. These three issues are close to my heart.