Vedanta board announces capital spending, company to invest $1.5 bn across oil, zinc, steel business

Billionaire Anil Agarwal’s Vedanta Ltd on Friday said it will invest USD 1.5 billion across its oil and gas, zinc and steel businesses.

Its board at a meeting on Friday approved USD 687 million capital spending for drilling of new wells at the firm’s oil and gas unit, Cairn Oil & Gas, Vedanta said in a stock exchange filing.

See Zee Business Live TV Streaming Below:

It also approved a USD 466 million phase-2 expansion of the Gamsberg zinc project in South Africa and another USD 348 million for steel expansion.

The USD 687 million “capex investment is towards infill wells, development and exploration. The strategic priority for the Cairn Oil & Gas business is to increase near-term volume through infill wells and add resources through exploration,” the filing said.

It said that USD 360 million have been earmarked for infill wells in the prolific fields viz Mangala, Bhagyam, Aishwariya, Aishwariya Barmer Hill (all in Rajasthan block) and Ravva in eastern offshore.

“The exploration work programme with capex investment of USD 327 million shall be spread across the OALP blocks and PSC blocks including pilot wells for shale,” it said.

The company had bid and got some blocks for exploration of oil and gas under the Open Acreage Licensing Policy (OALP) over the last few years.

The Gamsberg Phase II Expansion Project at a cost of USD 466 million will double up capacity to 8 million tonnes per annum to produce additional 200,000 tonnes a year MiC Zinc. “This project will bring significant socio-economic benefit and will make Vedanta Zinc International as largest zinc producer of South Africa.”

Vedanta said it will invest USD 348 million in a 3 million tonnes project of its subsidiary ESL Steel Ltd.

“The steel expansion project with an investment of USD 348 million comes with additional blast furnace supported coke ovens, pellet plant, oxygen plant and other auxiliaries and infrastructure upgradation including railway siding to plant head,” it said. “This project also comes with a new 0.18 million tonnes Ductile Iron Pipe Plant which will help us to maximize VAP.”

This project along with debottlenecking will capacity to 3 million tonnes per annum with “the lowest quartile cost & premium product portfolio,” it added.