Mumbai: India-focused mining firm Vedanta Resources Plc. hopes to buy the government’s residual stake in Bharat Aluminium Co. Ltd (Balco) and Hindustan Zinc Ltd by the end of the year, according to Anil Agarwal, chairman of the London-listed firm. In an interview, Agarwal talks about his outlook on commodities and his strategy for mergers and acquisitions. Edited excerpts:
Raising stake: Vedanta chairman Anil Agarwal says the firm is gearing up to buy the government’s shares in Balco and Hindustan Zinc. Abhijit Bhatlekar / Mint
What is your take on global demand right now and how do you think prices will fare over the year?
The prices have come off 50% or more because the demand has gone down. The market is flat at this point in time, but the mining and natural resource assets are scarce...and the way China, India and some of the underdeveloped countries like Africa are coming up, a lot will be needed to build. So I am very hopeful that things will change. I feel that (in) another year to a year-and-a-half, this will be the situation and then market will definitely recover.
The government still has residual stakes in Balco and Hindustan Zinc. By when do you hope to buy that and what is the outgo likely to be for the group?
We are gearing up for this and we know that we have to buy this residual share. We believe within this year we will move forward and I am just estimating, it should be around Rs7,000-8,000 crore.
You hope this transaction will be completed by the end of the year?
Yes, or before that. This is a simple transaction. We have to be ready with the money. So we are gearing up and we are getting ready to move forward in that direction.
Sesa Goa Ltd, a subsidiary of Vedanta Resources, acquired Dempo group’s mines and mining rights. What other acquisitions are you looking at and in what geographies? What is the kind of war chest that you are putting aside to be able to carry out these acquisitions?
We are looking at copper and iron ore assets. Those two are on the radar and we are looking at the region of Africa and Central America. We looked at some parts of Eastern Europe also, but we are getting close to Africa and Central America, and we are thinking on the upper side of $2 billion (around Rs9,760 crore) to invest to buy these assets.