'Now we are bleeding'

The view from Anil Agarwal's corner room in his suburban Mumbai office best tells his story. The steady stream of powerful jets taking off from the Chhatrapati Shivaji International Airportsymbolises his desire to take wing and soar.

Despite building a natural resource powerhouse with a market capitalisation of $9 billion from practically nothing, the chairman of Vedanta Resources is still not taking it easy.

His uncluttered office reflects his state of mind. Having put his company on the world map of base metals and iron ore, he's now eyeing the oil and gas sector.

Days after his company announced the acquisition of Cairn India and his aluminium refinery project in Orissa got a thumbs-down from the environment ministry, he looks unperturbed. Those who have been tracking him know that he's seen worse. The glass and chrome in his office reflects his steely resolve to forge ahead no matter what the obstacles.

In a heart-to-heart chat with Editor Prabhu Chawla and Deputy Editor Malini Bhupta over coffee and sandwiches, he talked about his journey from Patna to London via Mumbai, the issue of development and the reasons behind the travails his companies seem to run into. Excerpts:

Apart from acquisitions, have you built anything on your own?

Lots. The copper smelter was our first. Our capacity is four lakh tonnes. We doubled the capacity of MALCO from 25,000 to 50,000 tonnes. BALCO's capacity was 1,00,000 tonnes which we increased to 3,50,000. Hindustan Zinc was at 1,60,000 tonnes when we acquired it; today its production capacity is 11 lakh tonnes.

What is the background of the controversy in Orissa?

People say that India is resourcerich and is often termed the "golden bird". The country has two sources of wealth - one is agriculture and other is natural resources which are under the ground. Earlier the Government controlled everything. Orissa has 2.4 billion tonnes of bauxite reserves and 253 billion tonnes of coal reserves.

The Government has decided that aluminum is a natural industry as it's a green metal. If we have to look at a replacement for wood, then it can be done with aluminum.

The government wanted to attract private investment. It asked us to set up factories in Orissa and offered to privatise mines. Through Orissa Mining Corporation (OMC), bauxite mines were given to corporates.

Not many companies were willing to go there but we dared to. OMC was committed to give us bauxite. We spent Rs 11,000 crore on building plants, roads and a refinery in Lanjigarh. Vedanta Aluminium was given the understanding that OMC would get the mining lease from the central Government and transfer it to Vedanta.

Is there politics behind Vedanta?

Why should we pollute our mind? I don't know about all this. India has bauxite and that's the fundamental issue. Foreign NGOs are not targeting us; they are targetingIndia. They don't want development here. NALCO is merely two kilometres away from the site and they too take bauxite from there; but nobody says anything.

How will you solve this problem?

If India has to open the sector, Vedanta is in the queue. We have not committed any crime. If Orissa has to develop, then investments have to happen. It's an issue of how the international community will view us. The state is committed to give us bauxite which they have to.

What happened to the refinery?

We invested Rs 11,000 crore to develop the refinery and set up a smelter plant at Jharsuguda too. The OMC agreed to supply 150 million tonnes of bauxite to us and filed for approvals for its mining project along with an environment impact assessment report in 2005.

At this stage, the impact that mining would have on the hills and the ecosystem surrounding Kalahandi was discussed. Some activists filed a petition in court alleging that tribals would be displaced. If this plant comes up, we will be able to produce aluminum at $1,000 per tonne while global companies produce it at $2,000. The plant is ready but we have not got the bauxite.

We had an agreement with the state Government wherein we were promised bauxite. An entrepreneur who has put in money is now told that no bauxite will be given. We went there only because of the backward linkages and a commitment from the state. Now we are bleeding. The objections to the refinery are over its expansion from one million tonnes to six million tonnes. Almost 1,00,000 people depend on this refinery.

Do you think that you are caught between the Centre and state? Why are you being targeted?

It could be because of many things. Some don't want large projects to take off. This happens all the time. I am caught between the Centre and state. I don't think the issue is mines. It's a question of controversy, votes and tribals. Everybody wants to build a company like Vedanta. Everything is about crossfire. We have no notice from the Government on anything related to this issue. But we wouldn't have come this far without the support of the government.

What is the issue on the ground as far as you are concerned?

After much enquiry, nothing much came out; so the ministry came back, objecting that the expansion was done without its permission. The report that last came out has been compiled after one-and-half days. It's like first you bring a daughter-in-law and then after she joins the family, you ill-treat her. Before we invested, we were promised a lot. Whenever you do a big project, there will be noise; but we should not be swayed by international voices.

What is your mission?

I will give 75 per cent of my wealth to charity. I enjoy big businesses. Our companies own aircraft because they need it. But I am happy living in a three-bedroom flat. We have brought $20 billion into India which is unheard of. Why is nobody speaking of that?

You are slated to enter the top league in the mining and metals business? Do you think you are ruffling feathers?

Why don't you look at it this way: So far India was nowhere in metals and mining, but now we are producing and that too at low costs. So we should be proud of our achievements. We have 17 sites across nine states and we are among the largest investors in some states. In all our businesses, we believe that the competition should remain healthy. There is work to be done all over the world, in South Africa, in Namibia. Nobody has achieved what we have in India as a group.

What is your big dream?

I don't want anything. I want to leave a legacy of a clean and great company. And create an institution.

When you acquire a company what do you see?

A lot of people go and buy cheap assets but we focus on business first. We don't have any issue with culture.