Vedanta Resources positioning itself anticipating a hike in the demand for electric vehicles

The company;s portfolio is likely to allow it to improve and feed the demand for better battery technology and lighter, fuel efficient vehicles. To this end, its cobalt, zinc and aluminium mines in Zambia, Congo and India are likely to play key roles.

Vedanta Resources, a diversified mining company, is studying ways to use cobalt in batteries in anticipation of a boom in the demand for electric vehicles.

As per Tom Albanese, who will be stepping down as the company’s CEO in August, the rapid growth of electric vehicles has prompted the company to look at producing cobalt that is suitable for batteries rather than treating it as a by-product of copper. It plans on tapping its Zambian copper mines for this purpose.

However, the company is also betting on the continued usage of convention fuel. In this regard, earlier this year in April, it completed the merger of Cairn India Ltd , an oil and gas company with its Indian metals and mining group Vedanta Limited.

“As cobalt is becoming more exciting, we are looking to determine the right engineering solution to produce cobalt (for batteries) rather than a copper-cobalt alloy,” said Albanese.

He however did not want to provide a binding timeframe by when a study on this issue will be completed,

Following the release of its interim results last month, Vedanta disclosed during a conference call that it produces nearly 1,000 tonnes of cobalt-copper alloy per year and in addition aims to produce 3,000 to 4,000 tonnes of pure cobalt per year “going forward”.

Globally, the dominant cobalt miner in the world is Glencore. During the firts half of this year, its mines in the Democratic Republic of Congo produced 12,700 tonnes of cobalt. According to analysts, the company’s portfolio positions it well for any increase in demand for the materials needed by electric vehicles.

Similarly, Vedanta is also well placed, with its zinc mines in India, South Africa and Namibia. It has aluminum mines as well in India. These minerals will help fill the gap for increasing demand for light, low carbon materials for transport.

Investors are however cautious on Vedanta, whose share price has fallen nearly 20% this year while Glencore’s has risen by almost 20% outpacing many of its peers. As per analysts, this is in part due to its narrative on electric vehicles.

One of the challenges by Vedanta includes an ongoing legal action in connection with pollution in Zambia, where it is facing repeated demonstrations by local villagers over the issue.

Anil Agarwal, the company’s executive chairman stated during Vedanta’s AGM in that safety and sustainability were “a personal priority” for him. In reference to Albanese’s successor, he said an announcement would be made “in due course”.

Categories: Creativity, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy, Sustainability

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