Anil Agarwal-led Vedanta Ltd. is evaluating a proposal to buy the government’s 53.29% stake in Bharat Petroleum Corporation Limited (BPCL) and residual stake in Hindustan Zinc Limited (HZL).
Vedanta holds 64.92% stake in HZL while the government holds 29.85% stake in the company.
“We will aggressively bid in the forthcoming rounds of auctions for both bauxite and iron ores and possibly bid for BPCL, based on our evaluation. We look forward to the government correcting the inverse duty structure in the case of aluminium and decide on the sale of its residual stake in Hindustan Zinc,” said Mr. Agarwal, who expects the government to open more coal blocks for commercial mining. The government’s 53.29% stake in BPCL is valued at ₹56,817 crore and its 29.85% stake in HZL is worth ₹26,449 crore at Tuesday’s closing prices on the BSE.
Vedanta plans to start work on the two coal blocks of Jamkhani and Chotia that it had won through auction.
Mining share in GDP
According to Mr. Agarwal, the measures to open India’s mining sector will significantly raise its share in GDP from the current 3%, thereby boosting overall economic activity.
“We have always maintained that given India’s diverse topography and rich mineral resources, share of mining to GDP can easily rise to 10% from the current levels, that will also rein in imports for a number of metals and minerals. India has plenty of capacity for metals production and yet we are importing big amounts. To help ‘Make in India’ and the creation of jobs, government should use trade policy strategically,” he said.
He is also optimistic that the courts will consider the economic loss to India due to closure of mining operations in Goa and Sterlite Copper in Tamil Nadu and allow the firm to resume operations in both the locations. On investments, Mr. Agarwal said, “We have drawn up plans to spend $1.1 billion to ramp up crude oil production in our oil field in Barmer and a significant portion of that spend will happen in 2020.Further, we urge the government to extend the forward-looking policy regime for new oil and gas blocks to the ageing oil fields as well to reverse the steady decline in production in recent years.”
