India can't be the dumping ground for aluminium scrap. We have to produce more and more aluminium in India because we have huge bauxite and huge coal deposits, Anil Agarwal, Chairman, Vedanta, tells ET Now.
A 90-day ceasefire has been declared in US-China trade wars. Metal prices have rebounded the world over. What does mean for companies like Vedanta?
The world is getting wiser. Leaders want to sit down and sort out things across the table. The 90-day cooling off period to think through is good. I am a very positive person. I believe whatever happens will be for good. As far as India is concerned, I am concerned about increasing imports. We have nearly 2 billion people and we are completely dependent on imports for crude, aluminium, iron ore as well as coal. But we have huge capabilities.
Do you fear that the markets may have run ahead of themselves? The Trump-Xi truce is a temporary one. it is not as if the higher tariffs are being rolled back. They are being rolled back for maybe auto and not for metals or steel. Is that not an area of concern?
No it is not. The bounce back is not big. Percentage-wise, it is about 4-5% which is not that great but it is a a positive development. As far as India is concerned, we were very concerned about the import of aluminium scrap. We have never before seen 60% rise in the import of scrap. Whole world was dumping in India. When we import scrap, it is all-dollar payment and when we produce aluminium or aluminium scrap in India, it is 100% domestic. We have our own coal. We have our own bauxite. It is a great advantage for us to produce more in India than import this scrap. So, this was definitely a concern. As metal prices go up globally, India will no longer be a dumping ground.
You, Hindalco, the Aluminium Association have all asked for imposition of import duties. There has been a series of meetings. Finance Minister Arun Jaitley on the other hand has talked about breaking down trade tariffs. Crude prices have started rebounding after falling 40%. Brent is back above $60. What is it going to mean for your oil and gas business? Are you looking at realigning any of your businesses?
I have always said crude price is going to be around $60-70 and that is what is we should be hovering around. Last time, Prime Minister had a meeting with the Aramco chairman. I was present there. The Prime Minister told him, Opec is in your hand, production is also in your hand. A country like India cannot afford more than $50-60 price and the Saudi Aramco chairman said that their cost was $40-50. I got up and said Cairn produces oil for $6. India has a huge capability to produce oil. ONGC, Cairn and other companies can come forward.
You were in Houston. Cairn has won more than 40 oil and gas fields. You are looking for partners. Give us an update on Indias crude production.
We are looking for a partner. I have taken a huge risk to take on 41 blocks and we are going to start the work. I was personally in Houston where I have spoken to companies. They could not believe that India can open up like this. I am putting as much as effort as possible. Thank's to technology, what used to be done in 10 days can be done in 5 days now. I am very hopeful on these blocks and I am looking forward to see whether we can produce 50% oil in this country.
You had taken a personal stake in Anglo American and there was a lot of speculation on whether it could ever be merged with Vedanta. Today when things are looking brighter for metals, could a merger of Anglo American with Vedanta be back on the table?
I am very pleased with a close to 22% shareholding which makes us the largest shareholder in Anglo. Anglo American is the largest player in iron ore, coal, diamond and we have all these opportunities in India. I am persuading them to come to India. There will be lowest cost of production and there is no red tapism today. The government is welcoming. We have come up on the ease of doing business index from 177 to 70. So, I will try to make them come to India and open up some of the projects. The company is doing extremely well after we have come in.
India can't be the dumping ground for aluminium scrap. We have to produce more and more aluminium in India because we have huge bauxite and huge coal deposits.