Image Source: Business Today
Vedanta Limited, one of India's leading diversified mining and metals conglomerates, has embarked on a landmark capital expenditure (capex) initiative, allocating more than 125 billion rupees (approximately USD 1.5-1.7 billion for FY 2025-26) to aggressively boost its metal manufacturing capabilities. This robust investment is designed to strategically support the burgeoning electric vehicle (EV) industry and India's broader industrial growth ambitions. The move focuses on expanding capacity, advancing backward integration, and reinforcing raw material security, all aiming to position Vedanta as a critical enabler of India's energy transition and industrial self-reliance.
Key Aspects of Vedanta’s Capital Expenditure Plan
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Capital Scale and Strategic Focus: Vedanta's planned capex surpasses 125 billion rupees (~USD 1.5-1.7 billion) for the 2025-26 financial year, with a predominant focus on aluminium, zinc, power, oil & gas, and steel business verticals. The aluminium and power segments alone are allocated around USD 700 million, emphasizing their role in the industrial ecosystem. This scale of investment is part of a larger three-year capex strategy totaling approximately USD 8.5 billion aimed at transformational expansions across metal manufacturing and energy sectors.
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Boosting Metal Manufacturing for EV Industry: Aluminium and zinc are among the core metals driving Vedanta's expansion due to their critical applications in EV batteries, lightweight vehicle components, and renewable energy systems. With aluminium catering to nearly half of India's total demand, Vedanta's capacity expansions are expected to double alumina refinery throughput to 5 million tonnes per annum by FY2026 and increase aluminium smelting to 3.1 million tonnes per annum by FY2028, placing it among the largest primary aluminium producers globally outside China.
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Power for Metal Production: The smelting and refining processes crucial to metal manufacturing are power-intensive. Vedanta plans to enhance merchant power capacity up to 4.78 GW, ensuring cheap and reliable electricity supply, significantly lowering operational costs and enabling competitive pricing on a global scale.
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Raw Material Security & Backward Integration: Vedanta is focused on securing its raw material supply chains through integrated operations—from bauxite and coal mining to captive power generation and downstream product manufacturing. This approach mitigates risks associated with global commodity price volatility and supports India's 'Make in India' and Atmanirbhar Bharat (self-reliance) initiatives.
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Industrial and Economic Impact: The investments are envisioned to substantially augment Vedanta’s medium-term annual EBITDA to USD 8-10 billion, reinforcing India’s industrial base and advancing the country’s strategic independence in critical minerals and metals. This is vital for infrastructure, defense, aerospace, automotive, and hi-tech manufacturing sectors increasingly reliant on these materials.
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Domestic Market Leadership: Vedanta holds dominant domestic market shares, including 77% in the primary zinc market and substantial shares in aluminium, silver, nickel, oil & gas, and steel sectors. Expanding production capacity supports growing domestic demand, insulates against international trade uncertainties, and sustains India’s ambitions in green energy transition technologies.
Supporting Projects and Recent Milestones
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Hindustan Zinc Expansion: Vedanta’s subsidiary announced a USD 1.4 billion investment to double capacity, highlighted by establishing a 250 KTPA integrated smelting complex in Udaipur, enhancing zinc production aligned with expanding industrial usage including EV batteries and electronics.
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Downstream Facility Enhancements: Investments in ecological and low-emission casthouse facilities, for instance at the Jharsuguda mega aluminium smelter, reflect Vedanta’s commitment to sustainable manufacturing practices alongside capacity growth.
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Transition Metals and Renewable Energy: Vedanta is advancing initiatives to supply transition metals like aluminium, zinc, nickel, and silver critical for renewable energy infrastructure and EV manufacturing. The company also targets expanding renewable energy capacity aligned with a 2.5 GW goal by 2030 to power its operations sustainably.
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Economic Sovereignty and Global Competitiveness: Vedanta positions itself to turn global trade disruptions into opportunities by aligning its operations with India's self-reliance goals, securing strategic raw materials domestically, and leveraging scale and integration for competitive advantage.
Conclusion
Vedanta Limited’s commitment of more than 125 billion rupees in capital expenditure to accelerate metal manufacturing marks a transformative step toward enabling India’s EV industry and broader industrial self-sufficiency. By focusing on capacity expansion, backward integration, power enhancement, and sustainable manufacturing, Vedanta is poised to support India's energy transition and emerging green technologies with reliable, cost-competitive critical metals. This major investment not only strengthens Vedanta’s market leadership but also positions India as a resilient, resource-secure economy ready to meet rising domestic and global demand in the decades ahead.
Source: alcircle, millenniumpost, Vedanta, wirecable.in
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