‘We do have large investment plans spread over three to five years. We will put $10 billion in oil and gas, $3-4 billion in iron ore, and $3 to 4 billion in aluminium,’ says vedanta’s anil agarwal
Anil Agarwal’s Vedanta Resources was among the first companies to raise funds overseas (in 2003 Vedanta raised $876 million through an IPO on the London Stock Exchange). The company, which was forced to scale down its Odisha operations due to environmental concerns, is “looking at investing in Africa”. Speaking on the sidelines of the 13th HT Leadership Summit, Agarwal said: “My heart is in India, though I have not got my returns”. Excerpts from an edited interview:
What are your plans now after the setback in Odisha?
I think there is scope to raise $100 billion (about `6.6 lakh crore). Vedanta has created huge credibility in last 11 years as we raised money overseas, and invested here in oil and gas, aluminium, iron ore. We have given returns to shareholders. This government is creating capability in terms of opportunity because we are consuming only 10% of what China consumes. There is no option, but to invest. Either, you import or you produce. Today, the import bill is $600 billion and there is an aim to reduce it by $200 billion. We do have large investment plans spread over three to five years.
Commodities is seeing a downturn globally. When do you see it improving?
I think the cycle will turn in 2018 and the sector will soon see a revival. There is no new discovery of mines. And consumption is not going down. Even in China, it’s flat and not falling.
Will the group look to capitalise on the 2018 turnaround?
We can grow two to three times in our areas. We are also looking at different other sectors such as uranium, which is a big-growth area. Once the sector is open for private parties, we will definitely look at it.
In Odisha, where will you get the bauxite to run your aluminium operations since Niyamgiri has been shut?
Bauxite is in India. The government will have to think of something here. Niyamgiri is a national asset. The government has to make a move, and I am sure something will be done. About 80% of our revenue in resources goes to the government as taxes. We pay about ` 50,000 crore from our balance sheet.
In all the investments you mentioned, the maximum has been for oil and gas. Is the group looking at a shift in its focus?
In oil and gas, I have been there only for three years. But fundamentally, for any country to eradicate poverty, there has to be energy security. China has 50% security. Even in the US, there is self-sufficiency as they have opened up oil and gas, shale gas. India has to produce 50% of its own oil. You need 10 more such companies to produce 1 million barrels. I am the only person who says, ‘bring in more competition.’
Apart from India, are you looking at other regions?
Africa is one place that will see huge growth. There are 1.5 billion people in China, another 1.5 billion in India, 1.5 billion in Africa. What is left in the world? These are three regions that will grow and the whole world will work for these. There are various countries where we would like to invest and Nigeria is one such place.
Would you be looking at acquiring mines in Africa?
At the moment, we are holding on because the prices have to come down. But, yes African countries are phenomenal. We are looking at Nigeria and Uganda also. But for me my heart is in India, though I have not got my returns, but I still feel for India.
The merger of Cairn India with Vedanta has seen some opposition. There are concerns that shareholders of a cash-rich company like Cairn will lose out…
We are confident of resolving all such issues. The merger should be complete by March. The ratios were prepared by experts and were done after taking in all the factors. But, still, if there are any concerns, we are ready to address them immediately.
Anil Agarwal’s Vedanta Resources was among the first companies to raise funds overseas (in 2003 Vedanta raised $876 million through an IPO on the London Stock Exchange). The company, which was forced to scale down its Odisha operations due to environmental concerns, is “looking at investing in Africa”. Speaking on the sidelines of the 13th HT Leadership Summit, Agarwal said: “My heart is in India, though I have not got my returns”. Excerpts from an edited interview:
What are your plans now after the setback in Odisha?
I think there is scope to raise $100 billion (about `6.6 lakh crore). Vedanta has created huge credibility in last 11 years as we raised money overseas, and invested here in oil and gas, aluminium, iron ore. We have given returns to shareholders. This government is creating capability in terms of opportunity because we are consuming only 10% of what China consumes. There is no option, but to invest. Either, you import or you produce. Today, the import bill is $600 billion and there is an aim to reduce it by $200 billion. We do have large investment plans spread over three to five years.
Commodities is seeing a downturn globally. When do you see it improving?
I think the cycle will turn in 2018 and the sector will soon see a revival. There is no new discovery of mines. And consumption is not going down. Even in China, it’s flat and not falling.
Will the group look to capitalise on the 2018 turnaround?
We can grow two to three times in our areas. We are also looking at different other sectors such as uranium, which is a big-growth area. Once the sector is open for private parties, we will definitely look at it.
In Odisha, where will you get the bauxite to run your aluminium operations since Niyamgiri has been shut?
Bauxite is in India. The government will have to think of something here. Niyamgiri is a national asset. The government has to make a move, and I am sure something will be done. About 80% of our revenue in resources goes to the government as taxes. We pay about ` 50,000 crore from our balance sheet.
In all the investments you mentioned, the maximum has been for oil and gas. Is the group looking at a shift in its focus?
In oil and gas, I have been there only for three years. But fundamentally, for any country to eradicate poverty, there has to be energy security. China has 50% security. Even in the US, there is self-sufficiency as they have opened up oil and gas, shale gas. India has to produce 50% of its own oil. You need 10 more such companies to produce 1 million barrels. I am the only person who says, ‘bring in more competition.’
Apart from India, are you looking at other regions?
Africa is one place that will see huge growth. There are 1.5 billion people in China, another 1.5 billion in India, 1.5 billion in Africa. What is left in the world? These are three regions that will grow and the whole world will work for these. There are various countries where we would like to invest and Nigeria is one such place.
Would you be looking at acquiring mines in Africa?
At the moment, we are holding on because the prices have to come down. But, yes African countries are phenomenal. We are looking at Nigeria and Uganda also. But for me my heart is in India, though I have not got my returns, but I still feel for India.
The merger of Cairn India with Vedanta has seen some opposition. There are concerns that shareholders of a cash-rich company like Cairn will lose out…
We are confident of resolving all such issues. The merger should be complete by March. The ratios were prepared by experts and were done after taking in all the factors. But, still, if there are any concerns, we are ready to address them immediately.
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