Vedanta Ltd, a diversified mining and metals giant, has announced a $10 billion three-year capital expenditure plan to significantly expand its aluminium, zinc, and energy business. The investment is expected to drive the company’s medium-term annual EBITDA to $8-10 billion, with aluminium being a major driver of growth. The majority of the investment will go into the aluminium business, which is expected to add $4 billion to the company’s future top-line earnings.
The expansion strategy includes doubling the capacity of Vedanta’s alumina refinery to 5 million tonnes per year by FY26 and boosting its aluminium smelting capacity to 3.1 million tonnes per year by FY28. This will make Vedanta one of the largest primary aluminium producers globally outside China. The company is focusing on backward integration, taking control of the entire value chain from mining bauxite and coal to captive power generation and final smelting. This will enable the company to achieve cost leadership and protect itself from fluctuations in global commodity prices.
The investment plan also includes a significant boost in merchant power capacity to 4.78 gigawatts, which is essential for the aluminium vertical as smelting is a power-hungry process. The company is betting on India’s future industrial growth, with demand for aluminium expected to increase by 6-7% per year until 2030. Vedanta is committing its resources to making high-value products for this demand, including recent investments in downstream facilities such as a new low-emission casthouse at its Jharsuguda mega-smelter.
By investing heavily in the aluminium value chain, Vedanta is positioning itself to be a cost-competitive dominant player in the global arena. The company’s investment plan is also aligned with the Indian government’s “Make in India” program, which aims to promote domestic manufacturing and economic growth. Overall, Vedanta’s $10 billion investment plan is expected to drive significant growth and expansion for the company, with aluminium being a key driver of this growth. The company’s focus on backward integration, cost leadership, and high-value product manufacturing is expected to enable it to achieve its medium-term EBITDA targets and establish itself as a major player in the global aluminium market.