Tagged: Vedanta Resources

Another Big Blow to India-focused Vedanta Resources

Article first published as Another Big Blow to India-Focused Vedanta Resources on Technorati.

Vedanta-Resources Here is another big blow from India’s environment ministry to India-focused mining giant Vedanta Resources. The U.K. based company has received a letter that is also posted on environment ministry’s website (that can be found here and here) in which it has been asked to explain for its serious violations of country’s green laws made at Bauxite refinery in Orissa. The ministry asked Vedanta to explain why the environment clearance given to its one million tonnes a year factory in Orissa should not be cancelled. The government of India has recently rejected permission to mine at Niyamgiri hills in Orissa. A government panel has given a report to the government not to permit Vedanta to mine in forest area that would seriously endanger the existence of two tribal groups namely Dongria Kondh and Kutia gondh.

Vedanta is also facing hurdles in its bid to acquire Cairn India for $9.6 billion. ONGC has 30% stake in Cairn India’s Rajasthan oil field due to which Cairn India is subjected to get permission from the federal government in case of change of ownership.

The latest government notice puts Vedanta’s alumina refinery under cloud. The company has plans to expand the refinery’s annual capacity to six million tonnes. Vedanta’s project in Orissa is valued at about $9.5 billion. It is also come to known that the company has not taken permission to increase the capacity of the bauxite refinery. The latest violations were found by an environment ministry inspection team which said, among other breaches, the Vedanta

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Indian State-run Oil Firms Not to Offer Counter-bid for ‘Cairn India’

Article first published as Indian State-run Oil Firms Not to Offer Counter-bid for ‘Cairn India’ on Technorati.

Much touted counter-bid for ‘Cairn India’ by state run oil firms seem to run into troubled waters. Vedanta Resources has made an agreement with Britain based company Cairn Energy’s India wing ‘Cairn India’ to purchase its majority stake in India for $9.6 billion a week ago. State run energy firm ONGC (Oil and Natural Gas Corporation) owns 30% shares in Cairn India. It has been on the news that ONGC may not agree to the bid as it wants to exercise its right to ‘first reject’ and may offer a counter bid.

Yesterday Commerce Minister Anand Sharma also told the media while announcing annual Foreign Trade Policy (FTP) that the natural resources were strategic assets for the country and foreign companies might not be allowed to own India’s resources, as if they didn’t allow foreign private companies so far to own up any other natural resource in India. He also said ONGC should have a say on acquisition deal. Actually, the government has sanctioned several SEZs (supposed to be foreign territories on Indian soil as per SEZ act) throughout India and several more are waiting for approval.

It was also informed that ONGC, along with other state run energy firms GAIL India and Oil India may place counter-offer for Cairn India. Cairn India owns a large oil block in Rajasthan state in which ONGC has 30% stake. As Cairn Energy’s parent company has needed to finance its operations at some other region it has offered to

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Regulatory issues could delay Vedanta-Cairn deal

Reuters | Aug 17, 2010 | 2:40pm IST

Regulatory hurdles could delay Vedanta Resources’ purchase of a stake of up to $9.6 billion in Cairn India, but the buyer and analysts see them as unlikely to derail the deal. Vedanta, in its first move into the energy sector, is buying a controlling stake in India’s No. 4 oil and gas company from Britain’s Cairn Energy to capitalise on rising energy demand, economic growth and an expanding population. The deal will need the Indian government’s approval because Cairn India has production-sharing contracts (PSCs) with the government for its oil and gas exploration blocks. According to their agreement, any change of ownership would require the government approval. Approval from state-run explorer ONGC, which has a 30 percent stake in Cairn India’s Rajasthan oil block called RJ-ON-90/1, is also crucial for any change of ownership at British firm’s Indian unit. ONGC has not yet raised concerns on the Cairn India-Vedanta deal, Indian Oil Secretary S. Sundareshan said on Tuesday, adding the government would take into account ONGC’s views on the deal. Officials from ONGC were scheduled to meet with the Oil Secretary on Tuesday evening.


In an interview with the Economic Times newspaper, Vedanta founder Anil Agarwal said ONGC would continue to remain a partner in Cairn India. “Whatever approvals are needed, whatever needs to be done for such a deal, we’ll do,” said Agarwal, a billionaire former scrap metal dealer who built his mining empire through a series of bold acquisitions. Analysts expected the deal would go through. “There are regulatory issues and they can delay the process of the closing the deal, but I would be very surprised if they turn out to be deal-breaker,” said Saeed Jaffery, a sector analyst with Ambit Capital in Mumbai. “The key issue is if Vedanta is qualified enough to own a business that it has no experience in running. However, they are likely to retain the core management of Cairn India and if that comfort is given, it would not be a major concern,” he said. Cairn Energy Chairman Gammell on Monday said the entire management team of Cairn India would remain intact. Continue reading

Key facts about Vedanta Chairman Anil Agarwal

REUTERS | Aug 13, 2010 | 8:05pm IST

*India-focused Vedanta Resources is set to buy a 51 percent stake in Cairn Energy’s Indian unit, Cairn India, for between $8 billion and $8.5 billion, a  source familiar with the matter said on Friday. The following are some key facts about Anil Agarwal, who controls Vedanta Resources:

*Agarwal was ranked number 113 by Forbes in its list of the world’s billionaires. The magazine estimates he is worth $6.4 billion.

*Raised in Patna, in the eastern Indian state of Bihar, Agarwal reportedly quit school at the age of 15. He is now based in London, from where he runs a  mining and metals empire that spans the UK, India, Australia and Zambia.

*Agarwal started his business in Mumbai in 1976 as a scrap-metal dealer, and now controls UK-listed Vedanta Resources, whose interests include  non-ferrous metals producer Sterlite Industries and India’s largest iron ore exporter, Sesa Goa.

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Vedanta should not be given mining approval: Govt panel

Reuters | Aug 16, 2010 | 3:42pm IST

A government panel said on Monday UK-based mining group Vedanta Resources Plc should not be given permission for bauxite mining in Orissa. “This committee is of the firm view that allowing mining in the proposed mining lease area by depriving two primitive tribal groups of their rights…in order to benefit a private company would shake the faith of the tribals in the law of the land,” the N.C. Saxena Committee that was set up by India’s environment ministry said. The panel said such a move may have serious consequences for the security and the well being of the entire country.

A spokesman for Vedanta in India said he had no immediate comment as he was yet to see the panel’s report. Government sources said the environment ministry’s forest advisory committee would take up the panel’s recommendations and announce a final decision soon. India-focused Vedanta last month defended its human rights record at a shareholders’ meeting where some fund managers joined pressure groups to protest over its plans to build a bauxite mine in an area sacred to indigenous people. London-listed Vedanta had denied that building a mine to extract the raw material to make aluminium in Orissa state would harm the indigenous Dongria Kondh people.

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Cairn India – target of Vedanta Resources | Reuters

India-focused Vedanta Resources is set to buy a 51 percent stake in Cairn Energy’s Indian unit, Cairn India, for between $8 billion and $8.5 billion, a source familiar with the matter said on Friday. Here are some facts about Cairn India:

* UK’s Cairn Energy owns a 62.4 percent stake in Cairn India. Malaysia’s national oil company Petronas holds 14.9 percent, while institutions own 20.2 percent. Individuals own the rest.

* Cairn India is the country’s fourth-largest oil and gas company valued at $13.8 billion as per Thursday’s close. The shares hit a record high on Friday.

* The firm raised $1.2 billion in an initial public offering in late 2006, and listed in Mumbai in January 2007. The IPO valued the company at $6.3 billion.

* The firm hired Chief Executive Rahul Dhir in 2006 from Merrill Lynch, one of the managers of the firm’s IPO. Dhir held a senior position in Merrill’s energy investment banking unit.

* In August 2009, Cairn India began pumping crude from its block in the Mangala oil field in the western Indian state of Rajasthan, the first major crude oil discovery in the energy-hungry nation in two decades. Continue reading