Vedanta sees metal prices stabilising, poised to take advantage of upcycle, says Chairman Anil Agarwal

Vedanta Limited expects the prices of metals to stabilize at the current levels, the metals and mining group company’s chairman Anil Agarwal said on Monday, amid a volatile market trend on the back of Russia-Ukraine geopolitical tensions.

“They (metal prices) will stabilize on this level – 10 percent plus-minus because the world is little mature; initially I thought there will be a lot of panic but I could see prices stabilizing around 10-15 percent plus-minus on these prices,” he told CNBC-TV18 in an exclusive interview.

Agarwal said Vedanta’s focus is on semiconductor ramp-up, for which it has a tie-up with Foxconn. The semiconductor plant will commence operations in two years, for which the company set a capex of $2 billion. Capex will be capped at $1.5 billion per year, he said.

“Semiconductor is an engine for India and for the world. We have a tie-up with Foxconn for semiconductor. In the first phase of the tie-up we will be about USD 2 billion. In two years’ time we are looking to produce semiconductors.”

The company is also focussing on ramping up silver and aluminium operations. It is looking to increase aluminium production to almost 3 mt from 2.4 mt. Meanwhile, Vedanta’s subsidiary Hindustan Zinc is producing zinc at a very competitive rate of $1,000/t, Agarwal said.

He claimed that renewable space will contribute to 25 percent of the company’s energy needs and added that Vedanta is well poised to take advantage of the upcycle in the metal space.

Agarwal also pointed to Vendanta’s interest in putting more investments into oil and gas. The company aims to produce 2 to 3 lakh barrels in the next two years and 5 lakh barrels in the coming years.

He, however, said supply chain disruption will continue for some time and that the market has not priced in higher crude prices yet.

According to Agarwal, Vedanta Limited is likely to pay out a dividend of approximately $2 billion, which will aid Vedanta Resources to repay its debt. He was confident that the company would meet debt obligations at the mining company and that there is no question of inter-corporate deposits (ICDs) from Vedanta Limited to promoter entities.