Vedanta to cut costs by 25% amid global slump

Vedanta Resources Plc, India’s biggest producer of aluminium, copper and zinc, plans to cut costs by as much as 25% as it battles a global slump that sank industrial metal prices to a six-year low, chairman Anil Agarwal said.

The London-listed mining firm will “tighten” capital spending and “do whatever is necessary” by way of innovation to help boost profit margins, he said in an interview in Jaipur.

The prices of the three metals have dropped at least 25% in the past year as latest factory output data from China, the world’s biggest consumer, signalled the rout is deepening.

“This is the worst I’ve ever seen,” said Agarwal. “We have to reinvent ourselves to cut costs, bring more efficiency. The fittest will survive and we believe we are the lowest cost quartile in the industry.”

Apart from retreating prices, Vedanta has also been slammed by environmental regulations in India. Its inability to mine enough bauxite has forced its aluminium smelters to operate below capacity, while courts have limited the amount of iron ore it can mine.

Shares of Vedanta Resources have dropped 50% in the past year in London, compared with the 37% decline in the Bloomberg World Mining Index.

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