The Anil Agarwal-led Vedanta Ltd. may have faced a blow when one of its operations in India was shut down earlier this year, but that is not stopping it from investing more money in the country.
Navin Agarwal, chairman of the company, has said they are planning invest as much as about $8 billion (Rs 56,000 crore) to expand its oil and energy businesses in India.
“As India’s largest private sector oil producer, Vedanta Limited contributes 27% to the domestic production and aspires to take it up to 50%,” he was quoted as saying.
About U.S. $4 billion will come in within the next two to three years in various growth projects. The remaining will be in zinc, lead, silver and aluminum businesses.
Of these earmarked funds, Vedanta said it will be investing $2.3 billion towards capex on its oil and gas activities in the “near term” to increase the reserve base by around 375 million barrels. According to its latest annual report, Vedanta aims to increase production from the current 200,000 barrels per day (bpd) to 300,000 bpd over the next few years.
“Our rich project portfolio is comprised of enhanced oil recovery projects, tight oil and gas projects and exploration prospects. As well as boosting production, this investment will generate sustainable employment opportunities, directly and indirectly and bring cutting edge solutions to community needs,” Vedanta stated.
For FY 2019, Vedanta expects to achieve growth in production, with total volumes in the range of 220-250 bpd, through execution of growth projects with operating expenditure of sub-$7/boe (barrel of equivalent).
This year, Vedanta has posted record zinc and lead production. In May, Vedanta had said it had received an order from the Tamil Nadu provincial government to close the company’s 4 lakh ton per annum copper smelter plant in Tuticorin with immediate effect. At least 13 people were killed after local police opened fire on people protesting against the plant’s operations.
Vedanta has always supported its Tuticorin operations, emphasizing the copper smelter complied with all environmental norms and is amongst the best, globally.
Vedanta has often advocated for policy change on the mineral mining front in India. The chairman reiterated this, saying encouragement to explore and produce natural resources in India would lead to greater self-reliance and save billions of dollars in imports.
But in what is seen as a further blow to the company’s operations in India, the Goa Directorate of Mines and Geology (DMG) has issued an approximately U.S. $13 million (Rs 97.48-crore) demand notice to Vedanta towards non-payment of royalty for FY 2011-2013.
The company is alleged to have illegally mined iron ore to the tune of 20,76,746 tons during this period, according to the DMG, a charge hotly denied by Vedanta.
The principal royalty amount is about U.S. $7.6 million (Rs 54.48 crore), while the interest of about U.S. $6 million (Rs 43.03 crore) has to be paid up in the next seven days.