Type | Public (LSE: VED) |
---|---|
Industry | Mining and Resources |
Founded | 1976, Bombay, India |
Headquarters | London, United Kingdom |
Key people | Anil Agarwal[1] (Executive chairman) Navin Agarwal[1] (Deputy Executive chairman) M. S. Mehta[1] (CEO) |
Products | Copper, aluminium, zinc, lead, gold, iron ore, pig iron and metallurgical coke |
Revenue | $7.9 billion (2010)[[1]] |
Operating income | $1.7 billion (2010)[AR 2010] |
Net income | $1.5 billion (2010)[AR 2010] |
Employees | Over 30,000 (2010) [[2]] |
Subsidiaries |
Sterlite Industries |
Website | vedantaresources.com |
Vedanta Resources Plc is an LSE-listed diversified FTSE 100 metals and mining company, and India’s largest non-ferrous metals and mining company based on revenues. With assets and operations in India, Zambia and Australia, it is primarily engaged in copper, zinc, aluminium and iron ore businesses. Recently, it has ventured into commercial power generation business.
It is the first Indian manufacturing company to be listed on the London Stock Exchange. It is on on track to become a million-tonne per annum producer at the lowest decile costs in aluminum, copper and zinc by 2010.
It has experienced significant growth in recent years through various expansion projects for copper, zinc and aluminium businesses and acquisition of Sesa Goa in April 2007, which enabled it to enter the iron ore business. Revenue from businesses increased from $3,701.8 million in fiscal 2006 to $7,930.5 million in fiscal 2010, representing a compound annual growth rate of 21%.
Contents |
The Group
Copper
Sterlite Industries (India) Ltd.: Sterlite is headquartered in Mumbai. Sterlite has been a public listed company in India since 1988, and its equity shares are listed and traded on the NSE and the BSE, and are also listed and traded on the NYSE in the form of ADSs. Vedanta owns 53.9% of Sterlite and have management control of the company.
Konkola Copper Mines: Vedanta own 79.4% of KCM’s share capital and have management control of the company. KCM’s other shareholder is ZCCM Investment Holdings Plc. The Government of Zambia has a controlling stake in ZCCM Investment Holdings Plc.
Copper Mines of Tasmania Pty Ltd.: CMT is headquartered in Queenstown, Tasmania. Sterlite owns 100.0% of CMT and has management control of the company.
Zinc
Hindustan Zinc Limited: HZL is headquartered in Udaipur in the State of Rajasthan. HZL’s equity shares are listed and traded on the NSE and BSE. Sterlite owns 64.9% of the share capital in HZL and has management control. Sterlite has a call option to acquire the Government of India’s remaining ownership interest.
Aluminium
Bharat Aluminium Company Ltd.: BALCO is headquartered at Korba in the State of Chhattisgarh. Sterlite owns 51.0% of the share capital of BALCO and has management control of the company. The Government of India owns the remaining 49.0%. Sterlite exercised an option to acquire the Government of India’s remaining ownership interest in BALCO in March 2004.
Vedanta Aluminium Ltd.: Vedanta Aluminium is headquartered in Lanjigarh, State of Orissa. Vedanta owns 70.5% of the share capital of Vedanta Aluminium and Sterlite owns the remaining 29.5% share capital of Vedanta Aluminium.
Iron ore
Sesa Goa Limited: Sesa Goa is headquartered in Panaji, India, and its equity shares are listed and traded on the NSE and BSE. Vedanta owns 57.1% of Sesa and have management control of the company.
Commercial power generation business
Sterlite Energy Limited: Sterlite Energy is headquartered in Mumbai. Sterlite owns 100.0% of Sterlite Energy and has management control of the company.
Madras Aluminium Company Ltd.: MALCO is headquartered in Mettur, India. MALCO’s equity shares are listed and traded on the NSE and BSE. We own 93.9% of MALCO’s share capital and have management control of the company.
History and milestones
1979
- Anil Agarwal acquires, through a family firm, Shamsher Sterling Corporation.
1986
- Sterlite Cables Limited, acquires the Shamsher Sterling Corporation business and changes its name to Sterlite Industries (India) Limited.
1993
- Commissions a plant for the manufacture of aluminium sheets and foils.
2000
- MALCO acquires 38.8% interest in India Foils Limited.
- Telecommunications cables and optical fibre business is de-merged into a new company, Sterlite Optical Technologies Ltd.
2001
- Acquires a 51% interest in BALCO from the Government of India
2002
- Acquires a 26% interest in Hindustan Zinc Limited, from the Government of India and a further 20% interest through an open market offer.
2003
- Acquires a further 18.9% interest in HZL following exercise of a call option granted by Government of India.
- Becomes the first Indian Company to list on London Stock Exchange.
2004
- Announces $500 mn global bond offering. This year Vedanta Resources also acquired 51% stake in Konkola Copper Mines in Zambia
2006
- Acquires Sterlite Gold
2007
- Sterlite successfully completes its $2 bn ADS issue in the United States and lists on the NYSE
2007
- Vedanta acquires 51% controlling stake in Sesa Goa Limited, India's largest producer-exporter of iron ore
2008
- Sterlite enters into agreement to buy certain operating assets of US based copper producer Asarco LLC
Criticism
Environmental damage
Vedanta has been criticised by human rights and activist groups, including Survival International and Amnesty International, due to their operations in Niyamgiri Hills in Orissa, India that are said to threaten the lives of the Dongria Kondh that populate this region.[2] The Niyamgiri hills are also claimed to be an important wildlife habitat in Eastern Ghats of India as per a report by the Wildlife Institute of India[3] as well as independent reports/studies carried out by civil society groups.[4] In January 2009, thousands of locals formed a human chain around the hill in protest at the plans to start bauxite mining in the area.[5]
Vedanta's Alumina Refinery in Lanjigarh was critiqued by the Orissa State Pollution Control Board (the statutory environmental regulation body) for air pollution and water pollution in the area. According to Amnesty International, local people reported dust from the plant settling on clothes, crops and food. An environmental impact assessment by the government found dust pollution was within acceptable limits.[citation needed] Vedanta officials claimed there was no dust pollution from the plant at all.[6] An environmental inspection of the plant reported water pollution by the plant including increasing the pH value of the river Vamshadhara below the refinery and a high level of SPM in the stack emissions.[7]
In October 2009 it was reported that the British Government has criticised Vedanta for its treatment of the Dongria Kondh tribe in Orissa, India.[8] The company refused to co-operate with the British Government and with an OECD investigation. They have rejected charges of environmental damage, saying it may be related to the increased use of fertiliser by farmers.[6]
Safety concerns
2007 Mining Deaths
Unsafe mining operations led to 1,246 injuries and 26 deaths involving own employees and contractors.[9]
Balco, Korba, Chhattisgarh
A chimney under construction by Gannon Dunkerley & Company at the Balco smelter in Korba, Chhattisgarh collapsed on 23 September 2009 killing at least 40 workers.[10] Balco and GDCL management have been accused of negligence in the incident.[11]
Litigation
Armenia
In early 2007, the Armenian government began an investigation of AGRC, a subsidiary of Vedanta Resources, vis-a-vis compliance with licensing and tax regulations following independent media claims that AGRC submitted incorrect data in production reports relating to royalty payments and was in violation of licensing laws. AGRC was also served a preliminary notice of penalties and fines to the tune of about $50 million (or 80 per cent of its net assets).
India
In respect of bauxite mines at Lanjigarh, Orissa, public interest litigations were filed in 2004 by Indian non-government organisations led by the Peoples Union for Civil Liberties to the Supreme Court sub-committee regarding the potential environmental impact of the mines. The Ministry of Environment and Forests received reports from expert organisations and has submitted its recommendations to the Supreme Court.
The sub-committee has found "blatant violations" of environmental regulations and grave concerns about the impact of the Niyamgiri mine on both the environment and the local tribal population. The committee recommended to the Court that mining in such an ecologically sensitive area should not be permitted.[12]
Vedanta chairman Anil Agarwal rejected allegations of maltreatment of locals. Agarwal said that the mining project at Niyamgiri has been approved by the Indian Supreme Court based on a process that included consultation with the locals carried out within the bounds of the law, attesting that the majority of the locals supported their industrial efforts.[13] An anonymous official of Vedanta Resources blamed the NGO's attacking Vedanta of being funded by competing foreign mining corporations.[13]
Human rights
In February 2010, the Church of England decided to disinvest from the company on ethical grounds.[14] According to indigenous rights organization, Survival International, the Church’s decision is extremely unusual, as it almost always prefers a policy of 'constructive engagement’ to disinvesting.[15] The Church stated that "we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect" and that "[it] would be inconsistent with the Church investing bodies’ joint ethical investment policy".
The Director of Survival International, Stephen Corry, said, "The Church’s unprecedented and very welcome decision sends a strong signal to companies that trample on tribal peoples’ rights: we will not bankroll your abuses. Anybody that has shares in Vedanta should sell them today if they care about human rights."[15]
Vedanta responded by expressing disappointment at the Church's actions, and that they are "fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights".[6]
The NGO Amnesty International has also come to criticize the company's record on human rights.[6][16] It has stated, "[I]t is clear that Vedanta Resources and its subsidiaries […] have failed to respect the human rights of the people of Lanjigarh and the Niyamgiri Hills." They add, "The proposed bauxite mine […] threatens the survival of a protected Indigenous community […] However, these risks have been largely ignored and consultation with and disclosure of information to affected communities have been almost non-existent."[17]
Following this controversy, several shareholders have joined in selling their shares due to human rights concerns. This includes the Joseph Rowntree Charitable Trust, the Marlborough Ethical Fund, Millfield House Foundation and PGGM. The British and Norwegian governments have both condemned the project, and Martin Currie Investments has also disinvested following pressure from Survival. The BP Pension Fund has reduced its shareholding over similar concerns.[18] The Economic Times criticized the project in their editoral, stating that if the mine goes ahead it will "impoverish a defenceless populace, perhaps to extinction."[19] On July 2010, the Chief Secretary of the Indian state of Odisha has ordered a new investigation into the rights of the Dongria Kondh tribe affected by Vedanta Resources bauxite mine, in what Survival International characterized as a "third major blow to Vedanta in a month". The announcement came two weeks after the Indian Minister of Environment and Forests ordered an investigation on the same topic. A government investigation published in March concluded that Vedanta’s mine ‘may lead to the destruction of the Dongria Kondh’.[20]
A four-member panel set up by Government of India in the Ministry of Environment and Forests investigated the bauxite mining proposal over Niyamgiri near Lanjigarh in the districts of Kalahandi and Rayagada in Orissa. The area has been traditional habitat of two particularly vulnerable tribal groups, the Dongria Kondh and the Kutia Kondh. The Committee submitted their report on 16th August 2010, stating "The Vedanta Company has consistently violated the Forest Conservation Act [FCA], the Forest Rights Act [FRA], the Environment Protection Act [EPA] and the Orissa Forest Act in active collusion with the State officials. ..Allowing mining … by depriving two primitive tribal groups of their rights over the proposed mining site to benefit a private company would shake the faith of the tribal people in the laws of the land ". [21]
Full text of the report can be seen at Panel reportBased on this panel report,Government of India has served a show cause notice on the Group on why their Stage I environment clearance should not be cancelled.
Legal violations
In July 2010, Sterlite Industries, a subsidiary of Vedanta Group was slapped a tax notice of about Rs. 324 crore on the company, and charged with violating several rules by the excise department in India.[22]
On 21st August 2010, the customs and excise department charged Vedanta group's Tuticorin-based Sterlite Industries (India) Ltd for evading duty by mis-declaration of export consignment. The company officials, however, charged the customs officials as being vindictive.
Charging Sterlite Industries for misdeclaration, excise officials said the company tried to ship out copper waste for separating gold and silver whereas the waste also contained other precious metals like platinum and palladium.
References
- ^ a b c "Executive Directors". Vedanta Resources. http://www.vedantaresources.com/executive%20directors.aspx. Retrieved 2010-01-20.
- ^ "British mining company threatens sacred mountain". Survival-international.org. http://www.survival-international.org/tribes/dongria. Retrieved 2010-08-01.
- ^ "Studies on impact of proposed Lanjigarh Bauxite Mining on biodiversity including wildlife and its habitat". Freewebs.com. http://www.freewebs.com/epgorissa/WII%20Report%20on%20Niyamgiri.pdf. Retrieved 2010-08-01.
- ^ "A brief report on Ecological and Biodiversity importance of Niyamgiri Hill and implications of Bauxite Mining". Freewebs.com. http://www.freewebs.com/epgorissa/niyamgiri.pdf. Retrieved 2010-08-01.
- ^ Sahu, Sandeep (27 January 2009). "Indians protest over mining plans". BBC News. http://news.bbc.co.uk/1/hi/world/south_asia/7854369.stm. Retrieved 2009-09-30.
- ^ a b c d "India refinery 'threatens health of local community'". BBC News. Tuesday, 9 February 2010. http://news.bbc.co.uk/2/hi/south_asia/8505250.stm. Retrieved February 9, 2010.
- ^ Nayak, C.R., Inspection Report on M/S. Vedanta Alumnimum Limited, Lanjigarh, Dist: Kalahandi
- ^ "UK Government blasts Vedanta for mistreatment of Oriya tribals". Thaindian.com. 2009-10-12. http://www.thaindian.com/newsportal/world-news/uk-government-blasts-vedanta-for-mistreatment-of-oriya-tribals_100259570.html. Retrieved 2010-08-01.
- ^ "Vedanta Annual Report 2007" (PDF). http://www.vedantaresources.com/uploads/VedantaRA07.pdf. Retrieved 2010-08-01.
- ^ "Balco chimney crash deaths climb to 26, dozens still trapped". Thaindian.com. 2009-09-24. http://www.thaindian.com/newsportal/uncategorized/balco-chimney-crash-deaths-climb-to-26-dozens-still-trapped-fourth-lead-2_100251989.html. Retrieved 2010-08-01.
- ^ "India chimney collapse kills 22". BBC News. 2009-09-23. http://news.bbc.co.uk/1/hi/world/south_asia/8271423.stm. Retrieved 2010-08-01.
- ^ Indian Supreme Court's Central Empowered Committee (2005) Report in IA No. 1324 regarding the alumina refinery plant being set up by M/S Vedanta Alumina Limited at Lanjigarh in Kalahandi District, Orissa
- ^ a b "Vedanta Resources caught in web of allegations". Economictimes.indiatimes.com. 2010-02-08. http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals-mining/Vedanta-Resources-caught-in-web-of-allegations/articleshow/5546599.cms. Retrieved 2010-08-01.
- ^ "Church of England sells Vedanta shares over Orissa human rights". News.in.msn.com. http://news.in.msn.com/business/article.aspx?cp-documentid=3610604. Retrieved 2010-08-01.
- ^ a b "Church takes ‘unprecedented’ step to sell stake in Vedanta". Survivalinternational.org. http://www.survivalinternational.org/news/5518/. Retrieved 2010-08-01.
- ^ "Don’t Mine Us out of Existence - Amnesty International". Amnesty.org. 2010-02-09. http://www.amnesty.org/en/library/info/ASA20/004/2010/en. Retrieved 2010-08-01.
- ^ "Amnesty slams Vedanta Resources". Survivalinternational.org. http://www.survivalinternational.org/news/5546. Retrieved 2010-08-01.
- ^ "Survival applauds Rowntree decision to sell Vedanta shares over ethical concerns". Survivalinternational.org. http://www.survivalinternational.org/news/5563. Retrieved 2010-08-01.
- ^ Stop the Vedanta Project in Orissa The Economic Times 17 Mar 2010
- ^ "Third blow for Vedanta in a month as mine faces new probe". Survivalinternational.org. http://www.survivalinternational.org/news/6224. Retrieved 2010-08-01.
- ^ ((cite web|url= http://www.thehindu.com/todays-paper/article574882.ece |title= Don't clear Vedanta's Mining Project: Panel |publisher=The Hindu newspaper |date= |access date=2010-08-17))
- ^ PTI (2010-07-26). "Business / Companies : Sterlite Industries facing tax demand of Rs. 324 cr". The Hindu. http://www.thehindu.com/business/companies/article534970.ece. Retrieved 2010-08-01.
External links
- Vedanta Resources
- Vedanta Resources profile on the Business & Human Rights Resource Centre
- London Stock Exchange company listing 88
- Environmental Protection Group, Orissa
- Survival International - Mine story of a sacred mountain
- Mountain and mine (video) - report by Al-Jazeera English on the Vedanta mining operations in the Niyamgiri hills