Vedanta Ltd.’s aluminium and steel capacity expansion plans are facing delays of more than a year due to holdups in Chinese equipment imports, top executives told analysts on an earnings call.
Project plans at the group’s Vedanta and Hindustan Zinc have been delayed on account of issues related to sourcing of experts and equipment from China.
An email query sent to Vedanta on May 15 was unanswered.
“The equipment movement from China caused bit of the delay, but more or less these projects are in full swing now and whatever commitment we have given we will be able to complete those projects on those timelines,” a top executive told the analysts on May 12 in response to a query on the delay in commissioning capacity expansion for steel and Bharat Aluminium Company (Balco), which is a part of Vedanta’s aluminium business.
In the steel division, Vedanta planned to double its hot metal capacity to 3 million tonnes per annum by the end of FY23. The new schedule, according to Vedanta’s investor presentation for the March quarter, now expects completion by June 2024. Out of the $349 million approved for the project, the company had already spent $88 million over the past two years, as of March.
Vedanta’s plan to expand aluminium capacity to 1 million tonnes per annum also faced a delay. Commissioning of the project has been pushed to June 2024 from the first quarter of FY24.
Plans to debottleneck aluminium capacities at Balco have been postponed by five quarters to March 2025 from December 2023. The company approved capex of $1.14 billion for the expansion planned at Balco, of which $1.04 billion was unspent as of March.
One of Vedanta’s mining projects has also been delayed. The company now targets to start production from the Radhikapur (W) mine in Odisha by the start of FY25 instead of by the end of the calendar year 2022.
In April, Hindustan Zinc, a subsidiary of Vedanta, reported similar woes for its fumer plant – to improve the recovery of zinc – in Rajasthan. The company plans to send its own team for training to China to complete the commissioning of its fumer plant as Chinese engineers were unable to visit India because of visa issues.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
