“I as well as Vedanta’s Chairman Anil Agarwal share the same long term vision that everyone nurtures for India, that is, to be one of the most powerful economies in the world…” Tom Albanese, CEO, Sesa Sterlite.

Sesa Sterlite, a Vedanta Group company is a global diversified natural resource conglomerates, with operations across aluminium, zinc-lead-silver, oil & gas, iron ore, copper and commercial power.

It was a privilege for AlCircle to speak to Mr. Tom Albanese, Chief Executive Officer and a director of Sesa Sterlite on the 1st day of the 3rd International IBAAS Conference at Vizag. Being a Mining Engineer and a Mineral Economist himself and with his valuable experience in the Mining industry with some of the top listed companies worldwide including Alcan, he has a lot to contribute towards the information needs of the industry. We are pleased to share with our readers his current and future agenda for Vedanta, his company’s vision for India and how he hopes to regain investor confidence on one of the leading energy, metal & mining groups.

Excerpts from the interview:

AlCircle: You have years of experience in the Mining industry with some of the top listed companies worldwide. Please share with us how you forayed into the mining sector?

Mr. Tom Albanese:I started in mining without much planning. I grew up in East Coast United States with a keen interest in backpacking and climbing. So at the age of 17, I started with mountain climbing in Alaska. Along the way I decided to take courses in geology and learn more about the rocks and that led to working for oil companies& exploring for copper in Alaska as a teenager. Those unusual experiences of flying around in helicopters exploring minerals earned me my first experience in the mining sector. This experience brought me into that sense of discovery looking for the next exciting prospectsand led me progressively into learning more about the mining industry. I would never have planned at the age of 17 that I would be the chief executive of a mining company. But I was enthusiastic and passionate about the business I was in and that is precisely the reason I am here today.

AlCircle: Being a Mining Engineer & Mineral Economist, what is your take on the restrictions imposed upon mining around the world including India? How do you think, it is affecting the mining industry and the aluminium industry as a whole?

Mr. Tom Albanese:On a global basis, with prosperity, people get drawn more towards things they can afford, like, clean air, clean water and a good environment instead of mere survival. And now with the dissemination of information through the internet & mobiles the awareness about environment is much stronger. This has put a pressure on the industry to do everything on the line of best practices that is expected in OECD nations. The industry is expectedfulfill all the commitments towards work-place health and safety or its environmental management, biodiversity management or the CSR programs. With that the companies will be able to succeed notwithstanding the increasing regulatory pressures.

Practically speaking, the increasing regulatory pressures around the world would make it more difficult to build and commission new projects. Over time, this will impact the flow of supply into the markets which could be a challenge in the near future. With the increase in consumption, there will be an increase in waste material. In India for example, over the next 10 to15 years, per capita GDP will double. If India’s economic reform takes place with the new government, and the GDP doubles, per capita consumption of aluminium or energy or steel or most of the other commodities will quadruple.It means that the Indian industry needs to be thinking now about how to increase its total production capacity by four times in the next 10-15 years whereas it may take 5-10 years just to get the permits. Otherwise, it will end up being a large importer of commodities it should be self sufficient in.

AlCircle: What is your view on the 20% export tax imposed on bauxite by the current budget? Do you think it is going to help domestic aluminium producers in sourcing raw material for their plants?

Mr. Tom Albanese: On a global basis, fewer restrictions in exports and imports mean that you have freer movement within the country. However one has to be careful as intermediate products may have a different approach than a finished product and you may have unintended consequences.

AlCircle: Vedanta has recently faced a number of operational issues over permits to operate their mines and this is more or less affecting their business as well. We would like to know how you are planning to regain investor confidence on the group.

Mr. Tom Albanese: In many ways, the challenge we faced over the past several years in getting projects approved or gettingfeed stock for running projects has been typical for much of Indian Industry. As I meet with investors in North America, Europe, UK and the rest of Asia, even the Indian investors, the first question I usually get is whether the Modi government is “for real”, that is, whether is it really going to make the needed reforms so that the industry can once again thrive in the country? I am very positive in that respect. As far as Vedanta is concerned, we are going with the momentum. We are not going to solve all the problems overnight but trying to take one step at a time and create a positive momentum.Like for example, commissioning 50 new pots atJharsuguda or accessing the new laterite bases in Odisha. For me, that is a pragmatic and realistic strategy.

AlCircle: It is unfortunate that SesaSterlite’s alumina refinery at Lanjigarh is running at a reduced capacity due to absence of raw material. What is your plan for the refinery in near future?

Mr. Tom Albanese: We had a successful public hearing for an expansion a few months ago and we are looking forward to receive the needed environmental permits from the Ministry of Environment for the expansion Lanjigarh refinery to 5 million tonnes or more. With that expansion we would then promptly begin taking our existing facility and ramping up its capacity to 2 million tonnes per year. We will then look at, with proper economic evaluation, resuming the construction of the 3 million tonne facility, the construction of which had been suspended two years ago. Realistically, we won’t do it all in one go but we look at sequencing the stages as we identify the necessary bauxite and laterite resources within the region. We made it quite clear that those bauxite resources will not only need to meet the geologic tests and the economic test but they will also need to meet the consents of the surrounding communities.

AlCircle: What is Vedanta’s long term vision as an Aluminium Producer as well as a Mining and Metals company?

Mr. Tom Albanese: I as well as Vedanta’s Chairman Anil Agarwal share the same long term vision that everyone nurtures for India, that is, to be one of the most powerful economies in the world, to be a great manufacturing hub, to eliminate poverty and to develop communities. I think with that you will see GDP per capita growing quite dramatically and simultaneously we hope to see a tremendous increase in the demand for metals and for energy and that is where our business lies - in producing metals for the future generations or the future Indian economy.

AlCircle: Where would you like to see India on the world Aluminium Map by 2020 and 2030, considering its population, low per capita Aluminium Consumption, Abundant Bauxite, Thermal Coal, and low cost skilled manpower?

Mr. Tom Albanese: We look forward to supporting others who would want to be in the aluminium industry. We actually want to collaborate with people that provide us the necessary contractual services, technical services.We also work closely with the state government to set up special development areas near our facilities so that we can encourage downstream production and R&D. We are not necessarily, a metal fabrication business but we want metal fabrication businesses and manufacturers to be near us. From an efficiency standpoint, with my experience from Alcan, the most efficient thing is to keep your metal in a molten state rather than making billets and ingots. We can save energy by avoiding reheating. We can put it into a truck and that truck goes into a nearby Special Economic Zone so that molten metal can be immediately utilized in manufacturing aluminium products. This is a very sustainable and energy friendly approach.

AlCircle: So, is Vedanta planning to do something in that line?

Mr. Tom Albanese: We would like to be in a position, where downstream manufacturers will see the economic benefit of being located next to our facilities so that we can provide them molten material which is the cheapest source of aluminium feed stock.

AlCircle: Does Vedanta have any plans for Bauxite, Alumina and Aluminium Investments outside India?

Mr. Tom Albanese: At present, our main focus for our aluminium sector is to take the 8 billion dollars of investment we made in this sector and see it generate as much capacity as is needed for India.

AlCircle: What is your suggestion to the Government of India in respect of Mining and Metallurgical Industry if India is to achieve a sustained 7-8% GDP Growth?

Mr. Tom Albanese: I started my career looking for minerals and because of that I have the optimism of a geologist. So my advice would be to stick to the ‘Make in India’ agenda and find it in India, so that those raw materials can then be used in manufacturing finished goods in India.So ‘Find in India ‘would be the best stepthough I do not want to trademark that.

AlCircle: AlCircle is an information and B2B portal for the aluminium industry and we aim to be the reference point for aluminium industry players in that domain. As a metal and mining professional; do you think e-commerce & digital media can work well in the aluminium sector?

Mr. Tom Albanese: Most of the daily information I get about the world of business is on my mobile. I don’t like to carry paper so if you can convince me that a particular app will provide me with the information I need, it will be on my mobile. Anything I find attractive and useful, I will use it. And I think, it works the same way for any other industry professional.

Disclaimer: “The information presented herein is neither intended nor implied to be a substitute for professional advice. The views and opinions shared in the interview section of www.alcircle.com are unique to the interviewees and do not necessarily reflect the viewpoint of www.alcircle.com.”