Billionaire Anil Agarwal-controlled Vedanta Resources has decided not to pursue a proposal to build a Rs 20,000-crore (Rs 200 billion) five-million-tonne steel project in Orissa in view of its strategy to focus on non-ferrous and iron ore businesses, two highly-placed sources in the company said on Tuesday.
The steel project found no mention in Vedanta's capital expenditure plan of $26 billion for three years nor was it mentioned in the organisational restructuring, both of which were announced on Tuesday. Significantly, the US copper maker Asarco, which is yet to be acquired by Sterlite, has found a place in the new structure.
The steel project was proposed in August 2004, when chairman Anil Agarwal met Orissa Chief Minister Naveen Patnaik, but little progress has taken place since then.
"The company announced the steel project in tune with the government policy to promote the value addition of important raw materials like iron ore. But now the steel business is no longer part of Vedanta's strategy," the source explained. Another top official said that the company may pursue the project in future depending on the conditions then.
For now, Vedanta, the holding company of Sterlite Industries, is concentrating on becoming a global mining major by increasing its iron ore production to 100 million tonnes by 2013 from the current 12.5 million tonnes, rather than getting into steel making.
Meanwhile, Vedanta Alumina is building a Rs 3,500-crore (Rs 35 billion) alumina refinery in Kalahandi and Rs 7,000-crore aluminium smelter project in Jharsuguda district, both in Orissa.
Anil Agarwal told the media that if the company gets a joint venture partner, it could complete the steel project in five years.
