A major chunk of this capex would go into oil and gas business. “About $2 billion has been earmarked for oil and gas business and the balance for aluminium, copper, steel and zinc where about $500 million each (at least) would be used as capex,” Agarwal, founder and chairman of Vedanta Resources Limited, said on Thursday at a virtual press conference.
Vedanta’s capex for three years to FY20 stood at Rs 20,000 crore, according to the company’s annual report for the year. In FY21, it spent Rs 7,286 crore, which is a 14 per cent increase over the previous year’s Rs 6,385-crore capex.
The company plans to push up its overall capacity by 50 per cent in the coming years through higher capex despite the pandemic. “This year (FY22) we may also have a profit of $7 billion and so aim to have good allocation for our businesses,” Agarwal said without elaborating whether the profit is for Vedanta Limited or parent Vedanta Resources.
Agarwal said that Vedanta was the only low-cost producer of oil in the country and given the dependence India had on the commodity, more low-cost domestic oil producing companies were needed.
“We are selling oil to the government for one-third cost of imported crude oil at about $20-$25 a barrel, as against $70 a barrel imported price. We need to have more oil producing companies in the country and focus on economic development is the only way this can happen,” Agarwal added.
Sunil Duggal, chief executive officer of the company, said the mining sector’s contribution to the country’s gross domestic product (GDP) was just about 1.5 per cent. “There is a strong scope for job generation in the mining sector, which currently even at 1.5 per cent contribution to GDP generates 2 crore (20 million) jobs. So if the mining sector is developed, there is ample scope for job generation,” Duggal said.
Vedanta is into iron ore mining business in Goa and Karnataka.
Agarwal said Vedanta Limited had witnessed the least impact of the Covid-19 second wave in terms of production as well as operations due to the precautionary measures taken at plant sites.
Vedanta Limited is a diversified natural resource company with business operations in India, South Africa, Namibia, and Australia. The company is into production of oil and gas, zinc, lead, silver, copper, iron ore, steel, aluminium and power.