This year looks like one of our best years ever. We have plan to invest the next $8-10 billion in the next two-three years, Navin Agarwal, Executive Chairman, Vedanta, tells ET Now.
Edited excerpts:
What according to you is the state of the economy in general and Vedanta in particular?
Broadly speaking, the economy in general is like a seesaw. Suddenly you see people talking about micro looking good but macro not looking good and then suddenly in the last few weeks, the whole air is changing. The general perception is that even the macro is looking good.
As far as Vedanta is concerned, we continue to see ourselves in a sweet spot. This year looks like one of our best years ever. We have plan to invest the next $8-10 billion in the next two-three years mainly in hydrocarbons, in oil and gas and we are looking forward to that investment.
On the commodity cycles itself, oil prices will range between $60 and $85 and we focus more on our cost of production but at the same time, other than what is happening to our volumes, costs and balance sheet, what is fundamental to Vedanta is our pillars. These pillars are around sustainability, leveraging technology, digital, innovation and people practices. We think we have got those pillars right. The cycles will come and go but as long as our pillars are in place, we are in good shape.
You have kept the cost of production so low that irrespective of what global oil prices are, you will be in the green. What kind of volume numbers are you targeting over three-four-five year period?
We have recently won some 41 new blocks and we believe that we have an opportunity to get half a million barrels of production a day from currently about 200-225 thousand barrels a day. Half a million barrels a day is what we are looking for in the next three-four years time.
What about aluminium and copper business? How are the realisations and what is the outlook?
The realisations for mining and metal products are with the LME. On LME, at this point of time, the rate is $2000 for aluminium and about $2600 for zinc. These are decent prices. We do not really like very high prices. From here, we will see some upside in aluminium prices going forward.
You are looking at a lot of distressed asset in India. There is very stiff competition both locally and globally for those assets. Are you aggressive about acquiring these assets?
I do not think we want to be aggressive. The good thing for us is that our balance-sheet is in a very good shape. Our net debt to EBITDA is less than one and we are going to protect our balance sheet. At this point of time, we have acquired Electrosteel. We are looking to grow Electrosteel from its current level of 1.5 million tonne to 3 million tonnes and as far as other assets are concerned, opportunities will come and we want to be selective and look at assets that have value.
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ET Markets
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