Anil Agarwal, the visionary founder of Vedanta Group, has articulated a strong belief that India is poised to achieve self-sufficiency in metals. In a recent interview, Agarwal emphasized India's immense potential in natural resources and Vedanta's strategic role in harnessing these for the nation's economic development.
Agarwal, 72, spoke from his Mumbai home following the successful restructuring of Vedanta into five distinct entities. He underscored that while India is largely self-sufficient in 'above ground' resources due to attractive PLI schemes, the focus must now shift to 'below ground' — the vast mineral wealth currently imported.
Boosting Domestic Production and Capacity
Vedanta's expansion plans are ambitious. Agarwal noted that the company's aluminium manufacturing capacity has grown 60-fold to 3 million tonnes and aims for 6 million tonnes, despite persistent shortages. In zinc, capacity is set to double to 2.2 million tonnes. He highlighted the significant progress in silver, moving from an import-dependent scenario to anticipated self-sufficiency.
The company is also exploring the fertilizer opportunity in Rajasthan, planning India's largest plant leveraging local rock phosphate and sulphuric acid. Furthermore, Vedanta is actively working on critical metals at Hindustan Zinc (HZL) and has acquired rare earth mines, seeking government support for these ventures.
"This will be a difficult journey for India, be it on oil and gas or bauxite. At the end of it, we are speaking of brick-and-mortar businesses. We lose foreign exchange in natural resources, and that must change." - Anil Agarwal, Founder, Vedanta Group
Strategic Demerger and Low-Cost Model
The recent demerger of Vedanta Ltd. into five separate companies is designed to unlock greater value and facilitate fundraising, which Agarwal describes as a "new Vedanta." He explained that this move will enable each entity, including power, metals, and steel, to pursue growth independently and attract specific investors.
A cornerstone of Vedanta's strategy is its low-cost operating model, driven by technology. Agarwal stated that technology allows the company to extract 25-30% more from existing assets and stay ahead of competition. He anticipates a further 20% cost reduction in aluminium production through alloy manufacturing, with similar efficiencies across other businesses.
Navigating Challenges and Future Vision
While acknowledging geopolitical uncertainties and debt challenges, Agarwal remains focused on Vedanta's core mission: natural resources. He views the current period as one of significant transformation for the group, emphasizing that the story has just begun.
Regarding the closure of the copper plant in Thoothukudi, Tamil Nadu, Agarwal expressed that it was a learning experience, and while the company has made efforts, the decision ultimately rests with the government. He clarified that this issue represents a small part of Vedanta's broader operations, and the group remains committed to creating value and acting as an ambassador in international markets.