Mr Agarwal would probably like to think so and may yet prove to be. Having established his largely non ferrous metals focussed industrial group Vedanta Resources in the UK via a London listing and expanded internationally into Africa and more recently the USA (his Sterlite subsidiary purchased the assets of Asarco Copper for $ 2.6b following that company’s liquidation) Mr Agarwal can be said to be sitting on a global metals business valued at some $6b. Interestingly he is now turning his attention back to his roots with plans for investments of up to $20b in non ferrous metals mining and refining operations and power plants.
Demand for Copper in India is growing 8-10% a year, aluminum 10-12% and zinc 13-14%, Vedanta said. India produces 89 minerals and is one of the world’s most resource-rich countries, ranking third in the production of coal, fourth in iron ore, sixth in Bauxite ” used to produce aluminum ” and 10th in refined aluminum itself. However, due to insufficient investments in mining and a limited role for the private sector, less than 10% of the Indian land mass has been explored, Citigroup wrote in a recent report.
Faced with this level of demand and domestic resource opportunity Vedanta is not alone in targeting the Indian market for massive investments. Nalco the Indian state owned aluminum producer is also planning multi billion dollar investments in new mining and smelting facilities in Andhra Pradesh and Orissa states.
But not everyone is happy with these planned investments. Whereas environmental and cultural objections usually manifest themselves as sit-ins or banner waving crowds in the west, in India there is a 30 year running battle with Maoist rebels claiming to stand up for poor farmers rights and landless laborers which has resulted in hundreds of deaths and repeated damage to power lines and infrastructure. In addition, the government is not keen to see the development of a massive export market for raw commodities as the recent imposition of export duties on iron ore have shown the authorities have an eye on the long game and are keen to encourage the retention of resources for consumption by domestic industries.
Nevertheless Vedanta’s plans do underline the growing confidence in the long term opportunities for the Indian economy and a long over due but very welcome increase in private investments following decades of failed government inspired industrial development.