Funds to be spent on expanding Jharkhand plant capacity from 1.5 mn tonnes now

Vedanta Ltd., the Indian subsidiary of Vedanta Resources Plc., is planning to invest more than $3 billion to expand the capacity of Electrosteel Steel’s plant in Jharkhand whose possession it secured earlier this year through an insolvency resolution process.

The investment is proposed to be made in two tranches.

Talking to the media here, Vedanta Resources Ltd. executive chairman Anil Agarwal said an initial investment of about $300 million would be made to increase Electrosteel’s capacity from the current 1.5 million tonnes. “It has an inherent capacity of 2.5 million tonnes,” he said, adding that this was likely to be done in two years.

This is proposed to be followed by another investment of between $3-4 billion to set up a 4.5 million tonne plant in the same area. Beginning with a feasibility report, this may be completed in four years with a direct employment potential of 60,000. Talks are on with firms in Korea, Japan and China for technology and equipment for this modern plant which would be like a ‘second Bokaro Steel Plant’.

‘Part of $8-bn plan’

This would be part of the $8 billion that Vedanta Ltd. plans to invest mainly in India (and in Africa) over the next three years, Mr. Agarwal said .

Funding would be mainly through internal resources — about $6 billion, while the rest would come from loans.

To questions on the Sterlite plant at Tuticorin, he said the National Green Tribunal had given a green chit to the company on this plant which was shut down due to complaints on environmental pollution. He indicated that resumption of operations would have to wait.

He said the investment climate was conducive in West Bengal now and the Deocha Pachami coal block (in Birbhum District) could be a game changer for the State.

He said while the group’s hands were full now, Vedanta Ltd. may put in a bid as and when the government floats tenders for the block.

To questions on his budget expectations, he said restricting imports, improving farmers’ incomes and a uniform GST rate would be good.

He also said that autonomy should be accorded to public sector units.