Vedanta may cut India investment plans

LONDON: Global mining major Vedanta Resources Plc today said it may reduce its investment in India by USD 5.1 billion and resort to cut in production in response to falling metal prices and slump in demand as it had an over 9 per cent dip in profit for the first half of FY '09.

NRI billionaire Anil Agarwal-led company has taken several initiatives to lower the size of investment lined up for a number of projects in India, including its aluminium and alumina project in Orissa, the company said in a statement.

The company had planned to invest about USD 14 billion in the country for over four years. "We have reviewed our capital expenditure programme and believe that we have the opportunity to reduce the announced investments by USD 5.1 billion through various initiatives," Agarwal said.

The company may reduce capital expenditure by 20 per cent on the alumina, aluminium and zinc-lead expansion projects in India, amounting to USD 1.5 billion. "We have cut the cost of our projects by reducing our capital expenditure without impacting the size of our projects including the 2.6 million tonne aluminium plant or one million tonne zinc and copper projects," Vedanta Resources Executive Vice-Chairman Naveen Agarwal told the media.

The mining major has also deferred its USD 2 billion investment in the 1,980 MW captive power plant at Jharsuguda, the statement said. The company may also lower the capital expenditure in the USD 2.1 billion Talwandi Sabo power project in Punjab to USD 500 million, it added.

Moreover, the company said it would also resort to temporary cuts in production to bolster the falling prices of metals, which have plummeted due to the slump in demand.