Vedanta investing US$8.8B in base metal expansion

Having received the go-ahead from India’s Supreme Court, Vedanta Resources (VED-L), an India-focused resource giant, is proceeding with a bauxite project in Lanjigarh, in the state of Orissa. An alumina refinery is already in operation, and the complex will produce 1 million tonnes alumina per year, with the capacity to expand production to 1.4 million tonnes. Capital costs, including the refinery, come to US$800 million.

About half of the alumina will be sent to aluminum production facilities at Korba belonging to Balco, a company owned jointly by Vedanta and the government of India. Once a short siding to the main railway line is built, alumina could also be shipped to the port of Vizag for export.

The Lanjigarh alumina project is a part of Vedanta’s plan to invest US$8.8 billion to raise production of all base metals to 1 million tonnes per year, and the company is making progress toward this target.

The second phase of a 500,000- tonne-per-year aluminum project in Jharsuguda is in progress, after the first phase was completed a year ahead of schedule. Vedanta is also expanding its copper operations in Zambia. Konkola Deeps mine is in the process of raising capacity to 7.5 million tonnes per year, and a 300,000-tonne-per-year copper smelter is being built in Nchanga.

Integrated zinc and lead production will be raised to 1.07 million tonnes per year by 2012, through investments in Hindustan Zinc, another company jointly owned by Vedanta and the Indian government. At an investment of US$900 million, the expansion will make Hindustan Zinc the largest integrated zinc-leadproducer in the world. The expansion will involve a number of mines: production at Rampura Agucha will be raised to 6 million tonnes per year; production at Sindesar Khurd will climb to 1.5 million tonnes per year; and Kayar will start producing at 300,000 tonnes per year.

In April, Hindustan Zinc completed an 88,000-tonne-per-year zinc de-bottlenecking project at the Chanderiya and Debari smelters. Total metal production capacity is now 754,000 tonnes per year, and ore production 7.1 million tonnes per year. Hindustan Zinc’s reserves and resources (compliant with Australia’s JORC code) total 232 million tonnes containing a total of 27.5 million tonnes of zinc-lead metal.

A 170,000-tonne-per-year zinc smelter in Chanderiya was commissioned in December 2007, and two brownfield smelter projects,