By Ashutosh Joshi
MUMBAI--Vedanta Resources PLC (VED.LN) has a acquired a 24.5% stake in a unit of Larsen & Toubro Ltd. (500510.BY) that holds key licenses for aluminium ore mines in eastern Indian state of Orissa, for INR2.01 billion, a filing with U.S. Securities and Exchange Commission showed.
The India focussed mining group has offered up to INR18.11 billion (about $326.8 million) to take complete control of the unit, Raykal Aluminium Co. Pvt. Ltd., a move that would give it access to key raw material required for its aluminium plants in Orissa state, the form 6-K filing showed.
Vedanta unit Sterlite Industries (India) Ltd. (500900.BY) has acquired the minority stake in Raykal Aluminium and agreed to buy the remaining stake in a phased manner. The company said the deal is based on achievement of certain milestones, but didn't give any details.
The filing, made on May 31 by Sterlite Industries, said the company had entered into a tripartite agreement with Larsen and Raykal on Feb. 23.
Larsen's website showed that Raykal is one of its subsidiaries, but it wasn't clear how much of a stake it currently holds in the unit, or if Raykal had any other investors.
Engineering major Larsen holds certain prospecting licenses for bauxite mines located at Sijmali and Kurumali of Rayagad and Kalahandi districts of Orissa, the filing said.
Following the pact, the entire bauxite excavated from the mines will be available for the use of Raykal and to the company, it added.
A spokesman for Larsen said the company had no comment on this information, while Vedanta India executives couldn't be immediately reached.
The deal is important for Vedanta's aluminium operations in India as the company is now stepping up efforts to secure raw material supplies for its aluminium plants, after the country's environment ministry rejected its proposal to mine the remote Niyamgiri hills in Orissa, in 2010.
The proposal, which was aimed at supplying bauxite to Vedanta's alumina refinery in nearby Lanjigarh, had seen vigorous protests by local and international activists who said that the project would cause grave damage to the Dongria Kondh tribals who live in the hills.
Several proposals for mining or setting up factories in the mineral-rich states of Jharkhand and Orissa have been stalled as the environment ministry has either delayed or denied approval.
Write to Ashutosh Joshi at [email protected]