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Vedanta Announces USD 6 Bn. Investment, Expects USD 7.5 Bn. EBITDA by FY-27

Vedanta Logo

Vedanta Limited, a major Indian Metals and Mining company, has announced plans to invest over USD 6 billion (approximately Rs. 50,000 crore) in its various business verticals including Aluminium, Zinc, Iron ore, Steel and oil and gas.

Through this investment, the company expects to attain an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of USD 7.5 billion by FY-27.

This investment will be made in Vedanta’s assets in India as well as overseas.

Vedanta’s Project Pipeline to Boost Incremental Revenue and EBITDA

Vedanta has outlined a pipeline of more than 50 projects and expansion initiatives. As per Vedanta’s management, these projects are expected to generate an incremental revenue of about USD 6 billion and will help boost EBITDA from an estimated USD 5 billion in FY-24 to USD 6 billion FY-25 and up to USD 7.5 billion by FY27.

Highlighting the company’s project pipeline, Mr. Naveen Agarwal, Vice Chairman of Vedanta, said, “We currently have several high-impact projects in execution mode across all our businesses. These will further contribute to our cost leadership while substantially increasing our operating capacities”.

Major Expansion Plans Across Vedanta’s Operations

Vedanta’s Expansion Plans in Aluminium Vertical

Aluminium Flat rolled products plant

Vedanta will utilise investment in expanding production capacity at its Lanjigarh Aluminium facility in Odisha from 2 Million Metric Tonnes Per Annum (MMTPA) to 5 MMTPA.

Additionaly, Bharat Aluminium Company Ltd. (BALCO), a subsidiary of Vedanta, is set for an expansion that will bring its production capacity to 1 MMTPA from its current capacity of about 570 Kilo Tonne Per Annum (KTPA). This expansion will be done through the establishment of a 435 KTPA smelter, and a 180 KTPA Rolled Products (RP) project.

Apart from this, the company has planned a new Carbon plant and a new cast house at Vedanta Aluminium’s 1.8 MMTPA Jharsuguda facility.

These expansion operations are expected to be complete by FY-27.

ESL Steel’s Capacity to be Expanded by 1.3 MMTPA

ESL Steel Logo

Moreover, Vedanta will expand its steel business by adding 1.3 MMTPA capacity in its subsidiary, ESL Steel Ltd., which has a 2.5 MMTPA integrated steel plant in Bokaro, Jharkhand.

Vedanta will execute these expansion operations by or before FY-27.

Vedanta to Operationalise Athena & Meenakshi Power Plants

Sembcorp thermal power plant

Vedanta will be commissioning its 1,200 MW Athena power plant and 1,000 MW Meenakshi power plant. Operationalising these plants will take the company’s commercial power portfolio to 5 GW.

Athena power plant had been acquired by Vedanta in July 2022, at a cost of Rs. 565 crore. Whereas, in August 2023, Vedanta had received the approval of National Company Law Tribunal (NCLT) to acquire Meenakshi Energy Ltd. for Rs. 1,440 crore.

The company expects these thermal power plants to be commissioned by FY-26.

Iron Ore & Ferro-Alloys Production to be Expanded

Vedanta’s iron ore production is also slated for a boost, with a target of increasing production volume from 5.3 million tonnes to 13 million tonnes. This increase in production is expected by FY-25.

Further, Ferro Alloys Corporation Limited (FACOR), Vedanta’s Odisha-based subsidiary engaged in the production of High Carbon Ferro Chrome or Charge Chrome, will also undergo expansion through the addition of a 300 KTPA Ferro-Chrome plant by FY-27. Currently, FACOR has the capability to churn out 142 KTPA of Charge Chrome/Ferro Chrome. Additionally, Vedanta has planned to expand its Chrome ore mining operations by 1.5 MMTPA by FY-27.

Vedanta’s Other Expansion Plans in India

Apart from the aforementioned plans, Vedanta is in the process of establishing a fertiliser plant and a zinc roaster plant. It is to be noted that Hindustan Zinc Limited (HZL), Vedanta’s 64.9% subsidiary, is in the process of establishing a 0.5 MMTPA fertiliser plant in Rajasthan with an investment of about Rs. 2,200 crore, which is expected to be operational in 2024. Moreover, HZL is also in the process of setting up a Zinc roaster plant with an investment of about Rs. 800 crore. The company expects its Indian zinc capacity to reach 1.2 MMTPA by FY-25.