The chairman of Vedanta Resources said he is not looking to merge with Anglo American but rather has offered assistance to the company in efforts to expand into India.
The Financial Times reported that Anil Agarwal said he is confident with Anglo American’s leadership. He stunned the mining industry this year by buying an 11 percent stake in Anglo American, making him the second largest shareholder of the company.
“I have come in as a personal capacity,” he told the Financial Times. “There is no continuous dialogue of any nature [regarding a merger].” Agarwal, who controls Vedanta, became Anglo’s second-largest shareholder by agreeing in March to pay about £2 billion for the 11 percent stake.
“It would be a pleasure to introduce them in India, give them hand-holding so they can grow their business,” Agarwal said.
Vedanta has significant mining operations scattered across the world, many are located in India, where the company is the largest producer of industrial metals and a major power generator.
This year Vedanta completed a merger with India-focused oil producer and explorer Cairn India.
On May 24, Vedanta reported that it had returned to a profit in its latest fiscal year. Aided by higher commodities prices, Vedanta said profit before tax came to $1.4 billion in the year to March 31, compared with a loss of $5 billion in 2015-16, when it booked a string of charges.
Tom Albanese, Vedanta’s chief executive and a former top manager at Rio Tinto, announced in March his intention to step down when his contract expires in August. Agarwal said the new chief executive would be announced within three months, adding Vedanta was looking for someone who “brings technical knowledge and can do investor relations.”
This person also needs to embrace technology, he added.
A key project for Vedanta is its Gamsberg Mine in South Africa, one of the world’s largest undeveloped deposits of zinc. The mine will start operations in 2018 and produce more than 250 kt (275,000 st) of zinc a year. The price of zinc has increased 44 per cent over the past year, due to mine closures as well as solid demand in China. Agarwal said India’s zinc consumption represented about 15 percent of China’s, but would increase because of demand for galvanised steel. “I’m very bullish on zinc in the medium to long-term,” he added. “All the mines are depleting and there is no new production. We will capture the demand of India.”