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Vedanta CEO focuses on cost cutting as company plans aluminum expansion

Vedanta Ltd. aims to double alumina capacity at its refinery in India's Odisha state to 4 million tonnes over the next 2.5 years, Bloomberg News reported Aug. 6, citing CEO Srinivasan Venkatakrishnan.

The company also plans to boost aluminum smelter production capability by 30% to 3 million tonnes at an "all-in cost" of less than US$1,500/t.

Vedanta will spend 550 billion Indian rupees to boost output across its businesses, but its main priority will be to reduce costs, Venkatakrishnan said.

The CEO said the company has been able to cut aluminum production expenses to about US$1,764/t, from US$2,200/t in 2018, mainly due to lower alumina prices and higher coal supply security.

Vedanta is targeting further coal security of about 90% of its requirement, compared to about 72% currently, to further decrease costs.

The company estimates capital expenditure of US$100 million for its aluminum unit for the fiscal year ending in March 2020.

Referring to the fall in profit for its first fiscal quarter, Venkatakrishnan said he sees it as an "opportunity to pull the costs down even further, improve efficiencies and widen margins."

As of Aug. 5, US$1 was equivalent to 70.84 Indian rupees.