By Ashutosh Joshi
MUMBAI--Vedanta Resources PLC (VED.LN) has a acquired a 24.5%
stake in a unit of Larsen & Toubro Ltd. (500510.BY) that holds
key licenses for aluminium ore mines in eastern Indian state of
Orissa, for INR2.01 billion, a filing with U.S. Securities and
Exchange Commission showed.
The India focussed mining group has offered up to INR18.11
billion (about $326.8 million) to take complete control of the
unit, Raykal Aluminium Co. Pvt. Ltd., a move that would give it
access to key raw material required for its aluminium plants in
Orissa state, the form 6-K filing showed.
Vedanta unit Sterlite Industries (India) Ltd. (500900.BY) has
acquired the minority stake in Raykal Aluminium and agreed to buy
the remaining stake in a phased manner. The company said the deal
is based on achievement of certain milestones, but didn't give any
details.
The filing, made on May 31 by Sterlite Industries, said the
company had entered into a tripartite agreement with Larsen and
Raykal on Feb. 23.
Larsen's website showed that Raykal is one of its subsidiaries,
but it wasn't clear how much of a stake it currently holds in the
unit, or if Raykal had any other investors.
Engineering major Larsen holds certain prospecting licenses for
bauxite mines located at Sijmali and Kurumali of Rayagad and
Kalahandi districts of Orissa, the filing said.
Following the pact, the entire bauxite excavated from the mines
will be available for the use of Raykal and to the company, it
added.
A spokesman for Larsen said the company had no comment on this
information, while Vedanta India executives couldn't be immediately
reached.
The deal is important for Vedanta's aluminium operations in
India as the company is now stepping up efforts to secure raw
material supplies for its aluminium plants, after the country's
environment ministry rejected its proposal to mine the remote
Niyamgiri hills in Orissa, in 2010.
The proposal, which was aimed at supplying bauxite to Vedanta's
alumina refinery in nearby Lanjigarh, had seen vigorous protests by
local and international activists who said that the project would
cause grave damage to the Dongria Kondh tribals who live in the
hills.
Several proposals for mining or setting up factories in the
mineral-rich states of Jharkhand and Orissa have been stalled as
the environment ministry has either delayed or denied approval.
Write to Ashutosh Joshi at ashutosh.joshi@dowjones.com