Regulatory issues against vedanta group

Regulatory hurdles remain to be the major impediment for the Vedanta group companies. The market has responded to the continuous regulatory overhang across group companies and has brought down the stocks of two main listed entities of the group, Sterlite Industries and Sesa Goa. Sterlite is one of the major players in copper smelting with a capacity of 400,000 million tonnes per annum. The company has intended to double its capacity in the last couple of years, but failed due to pollution problems in Tuticorin, where the company has its major operations. The pollution issue has been in the backdrop right since 1990's and has also led to a temporary closure of the plant in 2010. Almost 20% of the total planned investment for doubling up the capacity has been made but the commissioning date is still uncertain. Vedanta Aluminium also recently announced the closure of its alumina refinery in Lanjigarh, Odisha. The reason for the same is unavailability of bauxite ores from the Niyamgiri hills where the company planned to source its ores from. The government had put a ban on mining form the Niyamgiri hills on the back of alleged threat to two major tribes of the region. The company continued to operate the refinery as it sourced from regions like Andhra Pradesh, Chhattisgarsh and Gujarat but due to falling supplies it was feasible to close the unit. The recent coalgate scam has also put the company's coal block in Rampia, Odisha under the scanner. The coal block was given to Sterlite along with 5 other players in January, 2008 to use coal for captive consumption. The power plants of Sterlite Energy which supply power to the aluminium plants and sell it at spot rates will continue to remain under pressure as the clearances related to the coal block is still on tenterhooks. Buying imported coal and coal at eauctions has led to an escalation in the cost of production for the company. The biggest sufferer of the regulatory overhangs has been its iron ore company; Sesa Goa. Initially its environmental clearance in Karnataka got reduced from 6 mtpa to 2.9 mtpa to keep the life of natural resources longer. This was followed by an illegal mining issue which put a total ban on its mining. The ban is still in place and will be for a longer duration as it has category B mines under its belt, which will get clearance once the category A mines are approved. The Goa government too banned iron ore mining in the state post the Shah Committee's recommendation that the mining executed in the state was illegal. This has left Sesa Goa with no mining activities. Sources believe that the ban will be

lifted soon and the Goa government will put a cap on mining. Sesa Goa which produces 14 mtpa of iron ore from Goa will be severely hit if the anticipated limit on iron ore production by the state government comes in place. The current brouhaha in the political arena has diverted the mind of government, partially, from the divestment program. Vedanta group recently made revised offers for the residual government stake in Balco andHindustan Zinc. Analysts believe that the offered price of Rs 21,635 crores for the residual 29.5% stake in HZL and 49% in Balco gives a sufficient premium to the fair value of the entities. However, with the Cabinet asking the Inter Ministerial Group to look into the deal is a positive development for the company and it will be hoping to get through the deal soon. http://articles.economictimes.indiatimes.com/2012-0921/news/34002137_1_iron-ore-coal-block-niyamgiri-hills

Vedantas human rights issues

Shareholders of Vedanta Resources are taking action to clarify issues about the mining company's operations in India over concerns about alleged breaches of human rights and environmental laws. Institutional investors have formed a coalition to investigate some of the issues that have dogged the company recently. Independently, shareholders including Aviva Investors are considering going to Vedanta's mining sites in India to assess the situation for themselves. They are also considering commissioning a report from an external consultancy. Vedanta has been the target of lobbying groups such as Amnesty International and celebrity campaigners including Bianca Jagger and Michael Palin. The Indian government recently accused the firm of violations of forest conservation, tribal rights and environmental protection laws. Vedanta is controlled by billionaire Anil Agarwal through Volcan Investments, a holding vehicle with a 61.7% stake in the business. The company was last month refused permission to develop a bauxite mineas the project was said to be a threat to local tribes and the environment. The mine was planned on a forested hill considered sacred by an ancient tribe. "Some [responsible investors] have disinvested because of concerns over stakeholder-related risks," said ethical investors group Eiris in a document recently presented to the company. "Shareholder engagement on such issues is increasing as a way to protect shareholder value in the long term."

Shareholders are waiting for a company's response to the document, where they asked the firm to create a committee to oversee the development of human rights and indigenous rights policies. The report also asked Vedanta to set up a panel of external experts to assess operations and to commission independent environmental and human rights impact assessments. "We are looking forward to the response in due course," said Steve Waygood, chief of sustainability research and engagement at Aviva Investors. Vedanta declined to comment. Shareholders also want clarity over the company's planned $8bn (5.2bn) expansion of its aluminium refinery, adjacent to the planned bauxite mine. "The era when mining companies could get away with destroying those in their path with impunity is thankfully drawing to a close," said Stephen Corry, director of Survival International. "The concerned public must remain vigilant about these so-called development projects companies simply cannot be trusted voluntarily to abide by human rights standards, particularly when dealing with tribal peoples who can't know what they're up against." Vedanta has also been stripped of international safety awards amid concerns that it won without declaring that a chimney collapse at one of its sites had killed at least 40 workers last September one of the worst industrial tragedies in India's recent history. Investors such as the Church of England, the Joseph Rowntree Charitable Trust, Norwegian Government Pension Fund and the Dutch pensions manager PGGM Investments have sold their shares in the company because of ethical and environmental concerns. PGGM said that with other investors it had tried to organise a meeting to discuss possible solutions to the problems in Orissa. According to the Eiris report, "Vedanta did not accept the invitation to participate in this roundtable." The company last month agreed to acquire a majority stake in Cairn Energy's Indian unit for about $9bn in cash. The move is aimed at securing oil and gas supplies to fuel the power plants the company controls in India.
http://www.guardian.co.uk/business/2010/sep/06/vedanta-human-rights-issues-india

VEDANTA IN NEWS
Vedanta is waiting for government decision on HZL, Balco stake sale(03/03/2012)
Vedanta group has said that the company is still waiting for the final decision from the government over the proposed purchase of residual government stakes in Hindustan Zinc (HZL) and Bharat Aluminium Company (BALCO) by Vedanta's subsidiary Sterlite. The remaining stake of the government in HZL and BALCO is estimated to be worth about Rs. 16,000 crore. The government has 49per cent stake in Balco and 29.5 per cent in Hindustan Zinc at present. Vedanta group chairman Anil Agarwal said, "We have given them the offer but we have not heard anything from them. We have to arrange so much of funds, so we are not sure where we are at the moment." Mr. Agarwal was speaking after holding a meeting with petroleum and natural gas minister S Jaipal Reddy. The offer from Vedanta comes at a time when the government is aiming to meet its divestment target for the quarter. The government get closer to achieving its target of generating Rs 40,000 crore from disinvestments. The Securities & Exchange Board of India has already said that it will allow the top 100 companies by market value in the country to raise money by selling stake. According to experts, the investors will be able to participate in the stake sale just like in any other secondary share offer, but the government would save time and money.

Vedanta to merge Sesa Goa and Sterlite Industries(22/02/2012)

Anil Agarwal led Vedanta Resources is planning to merge two of its units in the country, namely, Sesa Goa and Sterlite Industries. Sesa Goa is a leading iron ore while Sterlite Industries is involved in production of copper and aluminium. Vedanta Resources had earlier tried to merge its

copper, aluminium and iron ore business units in 2008 but it had to abandon the plans following stiff opposition from investors. The company is not planning to once again try to integrate all its operations under a single unit. According to rumors, Sesa Goa is likely to be merged into Sterlite Industries. Vedanta is also considering transferring its shares in Cairn India to Sterlite. Vedanta currently owns 59% stake in Cairn India, which is acquired last year. Company officials have not commented on the matter. Experts say that the merger is just an attempt by the company to improve its balance sheet figures. Vedanta, which is the parent company does notgenerate any dort of operating income and it only directly operates loss making Vedanta Aluminium. The company has been rising debt and consolidation will allow it to restructure it balance sheet and strengthen its financial position

Vedanta Purchase 10% Stake in Cairn India(13/07/2011)

A London-listed mining group, Vedanta Resources has acquired another 10% stake in Cairn Energys Indian subsidiary for $1.5 billion. Vedanta has purchased 191.92 million equity shares of Cairn India at Rs. 355 per share. Edinburgh-based Cairn Energy has revealed that it will sell another 30% of its stake in Cairn India, if it receives necessary consents and approvals from the government of India. After the acquisition of stake in Cairn Energy, Vedanta now owns 28.5% stake in Cairn India. Even after the deal Cairn Energy will remain the major stake holder with 52.2% shares. Vedanta Resources said in a statement, Vedanta continues to work with Cairn Energy to secure the necessary consents to complete the purchase of a further 30% of the fully diluted share capital of Cairn India and a further announcement will be made in due course. In August last year, Vedanta Resources agreed to buy a 40-51% stake in Cairn India but later lowered it to only 40%. Vedanta had to Rs. 405 per share to pay Cairn Energy, including a Rs. 50 per share non-compete fee. Last month, Cairn Energy decided to proceed the deal without the compete fee to make up for the loss of revenue, which the company may have to pay if the government conditions on royalty and payments are accepted.

Cairn India Deals With Vedanta Resources(01/07/2011)

The Cabinet Committee on Economic Affairs (CCEA) led some clauses that were to be fulfilled by Cairn India so as to carry out its stake deal with the Vedanta Resources. As per the guidelines, Cairn India will have to share a percentage of its income with Oil and Natural Gas Corp (ONGC), for getting the Rajasthan fields, the company was suppose to take back their cess negotiation case and seek a No Objection Certificate (NOC) from ONGC. As per a source, Cairn India was not going to pay the royalties instead it was ONGC who had to pay it on behalf of Cairn India and the amount was going to be deducted from the oil sale revenues, before the profits were distributed between the partners and government. With agreement on such clauses, the Vedanta was going to lower Cairn India's profit over the approved life of the life lasting 2020 from USD 7.43 billion to USD 5.75 billion. Vedanta paid USD 6.02 billion for a 40% stake in Cairn India at a reduced price of Rs 355 per share, down from the original USD 6.84 billion. Cairn India held 10 oil and gas blocks in India, including the huge RJ-ON-90/1 oil block, earning 125,000 barrels a day a 17% of Indias total crude production

SEBI to give final decision on Cairn-Vedanta deal(15/03/2011)

The union cabinet has not listed Vedanta Resources acquisition of Cairn India for $9.6-billion. This week there will be a discussion on this issue and Cairn possibly asked to resubmit applications seeking government approval for the deal excluding any conditions. On 23rd November, Cairn India had made an announcement of the sale of its majority stake in the company to Vedanta. It had also made conditional applications, which have entered for questioning after a Delhi High Court ruling. It had made this announcement in more than three months after its parent firm Cairn Energy. An Oil Ministry source has stated that from now onwards it is not listed on the memo of the Cabinet meeting which will held tomorrow.

However, complete support has been given by the Delhi High Court over the state's sovereignty on granting of consent in case of "any material change in the status of the companies or their shareholding". This was done for terminating Canoro Resources' contract for the Amguri oilfield in Assam by the government. Moreover, without having the permission from the government the Canadian firm had sold shares to Barbados-based MASS Financial Corp.

Cairn-Vedanta deal waits for ONGCs approval(08/03/2011)

The Cairn-Vedanta deal is now hinging on ONGCs approval. Though the Petroleum Ministry has approved the deal but until the no-objection from partner ONGC, this acquisition is not going to happen. This has been informed by one of the officials of ONGC. The mining group Vedanta Resources' acquisition of Cairn India has already received the approval of the government and the related authorities. The $9.6 billion deal now desperately needs ONGCs NOC so that Vedanta can buy a 51 per cent stake from UK's Cairn Energy. In the month of January this year, the ministry has watered down the 11 preconditions for Vedanta to acquire the UK firm. This has been informed by officials who had direct knowledge of the matter. They have informed that now Cairn India will have to get hold of the no objection certificate (NOC) from its Indian partner, Oil and Natural Gas Corp (ONGC). After that only, it can go for the stake sale to Vedanta. The State-owned Oil and Natural Gas Corp (ONGC) holds a stake in eight properties of Cairn India in India. Cairn India holds ten properties in the country.

Vedanta express optimistic a swell in aluminum refinery(22/10/2010)

On Friday, Britain's Vedanta Resources expressed that it was hopeful New Delhi might ultimately endorse development of the groups aluminium refinery; a day subsequent to the move was infertile.

The head of Vedanta unit Vedanta Aluminium Ltd in Orissa state, Mukesh Kumar, called for the denial of the development plans which are an unenthusiastic progress. However Vedanta is confident of receiving development consent subsequent to give in particular documents, Kumar expressed with the media, without intricating. On Thursday the Government discarded Vedanta's plea for consent to enlarge its aluminum processing plant in Orissa state to six million tons yearly through one million tones, stating environmental distress. The delay swayed in as Vedanta thrash about to succeed government endorsement of its designed 9.6-billion-dollar attainment of a calculating bet in Cairn India , a subsidiary of Edinburgh-originated Cairn Energy. Two months back, the environment ministry also cast off Vedanta's arrangement to excavate bauxite on land possessed by sacred by tribes people that was projected to nosh the Orissa refinery.

Ministry knocked for maintaining Niyamgiri statement under veil(19/09/2010)

The fault made by the National Environment Appellate Authority in regard to the environment ministry for the way in which environmental consent was given to Vedanta's Niyamgiri mining plan. In the order passed out by NEAA member J C Kala, formally locking the Niyamgiri episode of Vedanta's functions sketched awareness to the verity that the environment impact assessment report was on no account obtainable for public remark. The impact evaluation report is a vital document on the foundation of which environmental permission is provided. The report gives a direction to the type of counteractive action that project developers might need to take on. The order states that it is translucent that the Vimta Lab EIA of 2005, on the foundation of which the environmental consent was settled and was never in the public sphere for the public to articulate their opinions or trepidation during the two public trials held in Raigada and Kalahandi during the year 2003, guiding to non conformity of ministry's notification. It discovers that the impact assessment report arranged by Vimta Lab be deficient in analysis in order of human miseries that the project is likely to impose.

Vedanta hopeful about Orissa making arrangement for bauxite(29/08/2010)

The beleaguered mineral company, Vedanta Resources has said that the Orissa state government will consider of making alternative arrangement for its bauxite requirement. The situation arose after the Center refused to grant permission to the project of Vedanta sighting environmental reasons for the refusal. In a press release Vedanta has refuted all the allegations made by Centre and has said that it is not into possession of any mining activity in Niyamgiri and that no anti-environment activity has taken place there. It also clarifies in the release that Ministry of Environment and Forests has refused final approval to the Orissa Mining Corporation (OMC), and not Vedanta Aluminums' proposal for bauxite mining. Vendanta had signed a memorandum of understanding (MoU) with the Orissa government way back in 2004 for setting up an integrated alumina and aluminium complex in the state. It had also said that it would start a captive power plant. As per the deal, 150 million tons of bauxite was to be given to the company. Out of this, 78 million tons was to come from the Niyamgiri mines. But since then there have been various agitation by the local tribe which later on became a political issue.
http://www.topnews.in/companies/vedanta-resources