HZL, Balco arbitration: Vedanta drops proceedings against government

Billionaire Anil Agarwal said that Vedanta has withdrawn the ongoing arbitration against the central government with regards to a second call option on the latter’s residual stake in erstwhile public-sector undertakings Hindustan Zinc and Bharat Aluminium Company (Balco).


The metals and mining conglomerate has done everything that the government asked of it and is now hopeful of the centre soon divesting its stake in both the companies, Agarwal told ET in an exclusive interview.


“In the agreement it was decided that within three years they will divest. It’s almost 15-16 years now. Hopefully, they will divest soon,” the Patna-born business magnate said. The government’s divestment will help both the companies expand faster, he said. Hindustan Zinc could also explore an alliance with Vedanta’s zinc assets in South Africa.

Vedanta has also committed to invest upwards of $1 billion at the Konkola Copper Mines (KCM) in Zambia to develop its mining assets and modernise the related infrastructure, Agarwal said.

The move can be viewed as the global mining conglomerate extending an olive branch to the government of the African nation amidst their ongoing legal dispute. The previous Zambian government put KCM into liquidation in May 2019, accusing Vedanta of failing to honour licence conditions. Vedanta has denied these allegations.

“It is very unfortunate that the last government (put KCM into liquidation). This government has come, and it believes that we are the most creditable people and we are working with them,” Agarwal said.

“Whatever investment is required (we will put in). Money will never be a constraint to starting this mine,” he said. It is the largest copper mine in the world.

Vedanta is also considering acquiring a nickel mine in Africa if it finds one that is already operational, Agarwal said. Meanwhile, it will develop its recently-acquired Nicomet in India to produce up to 40,000 tonnes of nickel and cobalt annually from 7,500 tonnes at present. Agarwal said that he preferred exploring for nickel deposits locally over acquiring global assets, but if an operational mine came Vedanta’s way, the company will consider acquiring it.

Commenting on Vedanta’s joint venture with Foxconn to manufacture semiconductors in India, the sexagenarian said that all the application has been submitted to the centre and are awaiting its approval to move further. The companies are yet to identify a location for the proposed plant. The 60:40 joint venture will entail $2 billion of investment and could start making chips in India in the next two years, Agarwal said.

Vedanta will also continue to look at acquiring assets that made strategic sense, he said. The company this week emerged as the highest bidder for the bankrupt Athena Chhattisgarh Power Ltd, which has two 600-megawatt power plants close to Balco’s manufacturing base.