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Vedanta to Focus On Purse Strings Amid Aluminum Expansion – Mr Srinivasan

Metal News - Published on Thu, 08 Aug 2019

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Economic Times reported that India’s biggest aluminum producer Vedanta is prioritizing controlling costs as it embarks on expanding capacity, according to the chief executive officer. Mr Srinivasan Venkatakrishnan, who was the CEO of Johannesburg-based AngloGold Ashanti Ltd for five years before taking the helm at Vedanta in 2018, said that “Any expansion plans, we will do it with the strictest capital discipline and balance sheet focus. We will control the purse strings quite tightly.”

Mr Venkatakrishnan said in an interview that Vedanta plans to double alumina capacity at its refinery in the eastern state of Odisha to 4 million tonnes over the next 2.5 years and raise aluminum smelter production capability by 30% to 3 million tonnes “at an all-in cost of less than USD 1,500 a tonne.

He further said that “Every business has to earn its right to spend the capital before we spend the capital. Hence, we said let’s first drive the cost down before we actually go ahead with the expansion.”

Owned by billionaire Anil Agarwal, Vedanta plans to spend USD 7.8 billion to boost output across its businesses as it seeks to tap into the demand created by India’s ambitions of upgrading its infrastructure. Capital expenditure for the aluminum unit is estimated at $100 million in the year ending March, Venkatakrishnan said.

The company has been able to bring aluminum production expenses from USD 2,200 a tonne last year to about USD 1,764 largely due to lower alumina prices and higher coal supply security, he said. He added that “We are targeting coal security of around 90% of our requirement from around 72% now and that would see our cost come down.”

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Posted By : Rabi Wangkhem on Thu, 08 Aug 2019
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