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Vedanta Resources (VED)

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Thursday 16 November, 2006

Vedanta Resources

Commercial Energy Business

Vedanta Resources PLC
16 November 2006


                                                                16 November 2006

            Vedanta Resources plc Enters Commercial Energy Business

The Board of Vedanta Resources plc ('Vedanta') has approved a project to enter
into the commercial energy business in India. The first phase of this project
involves the setting up a 2400 MW green field power plant in Jharsuguda, Orissa
at a total cost of $1.9 billion. The power business will be operated through
Sterlite Energy Limited (SEL'), a wholly owned subsidiary of Sterlite Industries
India Limited.

Demand for power in India to support its growing economy has in recent years
exceeded supply. Per capita consumption of power in India, despite having
increased significantly in recent years, continues to lag behind power
consumption in other leading developed and emerging economies by a large margin.
To sustain the strong recent economic growth in India, the Ministry of Power in
India has set an ambitious target of providing 'Power for All' with a target of
achieving an installed capacity of 212,000 MW by 2012 by adding approximately
100,000 MW of generation capacity. India has large thermal coal resources, and
the coal industry is in a process of government deregulation that is expected to
increase the availability of coal. We believe these factors make the power
generation business an attractive growth opportunity in India and that, by
leveraging our project execution and operating skills in building and operating
captive power plants, Sterlite may compete successfully in this business.

The Group proposes to set up a 4x600 MW coal based thermal power plant at
Jharsuguda, Orissa. SEL has commenced construction of the first phase of the
project. It will comprise 4 units of 600 MW each. The second phase of the
project, which has not yet been approved by the Board of Vedanta, is for 1200 MW
comprising 2 units of 600 MW each. The power generated will be sold to the State
Electricity Boards and power trading companies. It would require approximately
13 million tpa of coal to run the 2400 MW power plant, which would be obtained
from coal blocks to be alloted.

The total investment is based on the green-field nature of the project and is
estimated at US$1.9 billion, to be phased over 4 years. This investment includes
boiler and generating unit common facilities like coal handling systems, water
treatment plant, cooling water systems, instrumentation, control tower and all
necessary infrastructure including railway networks, water pipelines and a
township for employees. The investment will be funded through a combination of
internal resources and external financing.


For further information, please contact:

Sumanth Cidambi                                   sumanth.cidambi@vedanta.co.in
Associate Director - Investor Relations           Tel: +44 20 7659 4732 / +91 22 5646 1531
Vedanta Resources plc

James Murgatroyd                        
Robin Walker
Finsbury                                          Tel: +44 20 7251 3801


About Vedanta Resources plc
Vedanta Resources plc is a London listed diversified metals and mining group.
Its principal operations are located throughout India, with further operations
in Zambia, Australia and Armenia. The major metals produced are Aluminium,
copper, zinc, lead and gold. For further information, please visit
www.vedantaresources.com.

About Sterlite Industries India Limited
Sterlite Industries (India) Limited, a majority subsidiary of Vedanta Resources
plc, is one of India's leading diversified Metals and Mining companies with
interests and operations in aluminium, copper and zinc and lead. The company's
main operating subsidiaries are Hindustan Zinc Limited for its zinc and lead
operations; Copper Mines of Tasmania Pty Limited for its copper operations in
Australia; and Bharat Aluminium Company Limited for its aluminium operations.
The company operates its copper operations in India itself.

Disclaimer
This press release contains 'forward-looking statements' - that is, statements
related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance, and often
contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,'
'seeks,' or 'will.' Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. For us, uncertainties arise from the
behaviour of financial and metals markets including the London Metal Exchange,
fluctuations in interest and or exchange rates and metal prices; from future
integration of acquired businesses; and from numerous other matters of national,
regional and global scale, including those of a political, economic, business,
competitive or regulatory nature. These uncertainties may cause our actual
future results to be materially different that those expressed in our
forward-looking statements. We do not undertake to update our forward-looking
statements.




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