Diversified natural resources company Vedanta Limited finds itself in a "sweet spot", enthused by reforms such as GST, as it gets ready to ramp up capacity with an aim to produce 50 per cent of India's oil output, its chief Navin Agarwal said today.
Based in India, the company said it will soon name its new CEO as the contract of the incumbent, Tom Albanese, ends next month.
"Vedanta is in a sweet spot. Our robust portfolio of tier-1 assets combined with a low cost model have successfully delivered exponential growth. We are on track to achieving over 1.5 million tons of zinc-lead capacity... We aspire to grow production and meet 50 per cent of India's oil production," Chairman Agarwal said while addressing the company's annual general meeting.
The company that reduced its gross debt by more than Rs 10,000 crore over the last 15 months and has one of the strongest balance sheets in the industry expects its 2,50,000 ton Gamsberg project in South Africa to go on stream next year.
As India aspires to be one of the top three economies in the world, it is important to bring down huge raw material import bill and the company is keen to contribute to this by boosting output of natural resources, he said.
"We are encouraged by reforms, including the Goods and Services Tax (GST), initiatives to develop infrastructure, and the focus on providing affordable housing for all. Several supportive regulatory reforms have been initiated. For instance, the auctioning of 300 mineral blocks in the current year. These are all transformative steps, designed to strengthen the country and unleash its full economic potential," Agarwal said.
In line with Prime Minister Narendra Modi's broader vision, there is a visible growth in the economy, which augurs well for the resources sector, and especially for Vedanta's resources portfolio, he added.
Hindustan Zinc, majority owned by the Vedanta group, is increasing its integrated production to 1.2 million tons (mt) and that of silver to over 700 tons. The company's oil and gas business continues to deliver on the expected lines, with gross production for the year at 1,90,000 barrels equivalent per day, Agarwal said.
"We are making strong progress towards achieving our full production capacity of 2.3 million tons for aluminium," he said.
Agarwal was addressing the shareholders in Mumbai at the maiden AGM of Vedanta Ltd, the sixth largest diversified natural resources company in the world, post Cairn India and Vedanta merger.
He also pitched for greater efforts to encourage exploration in India, calling for supportive regulatory reforms. "While the government has made a start, exploration is still not sufficiently incentivised, and this is true for minerals as well. We look forward to continuing our engagement with the government to encourage exploration," he said.
Agarwal further said Vedanta continued to focus on cost optimisation and productivity enhancement while also benefiting from the global commodity recovery.
Source: Economic Times