Vedanta Ltd.’s Anil Agarwal said aluminium prices could rise around 50 percent after U.S. sanctions on Russia’s United Co. Rusal, the biggest producer of the base metal outside China.
Prices should vary between $2,500 and $3,000 a metric tonne from the current minimum average of $2,000-2,200 if the situation (sanctions on Rusal) continues, Agarwal, chairman of metals-to-mining conglomerate Vedanta, told BloombergQuint in an interview. “India will have a great advantage due to the sanctions.”
Aluminium has gained around 8 percent on the London Metal Exchange in the past two trading sessions to $2,207 a metric tonne. That came after the U.S. slapped sanctions on 12 Russian companies, including Rusal and seven other firms linked to billionaire Oleg Deripaska, to punish the country for actions in Crimea, Ukraine and Syria. Rusal accounts for 13 percent of the global aluminium output outside China.
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India imports about 1.5 million tonnes of aluminium and that has to change, Agarwal said. Vedanta plans to expand its aluminium capacity in India to 3 MT from 2 MT. The company will continue to focus on the domestic market and is not interested in an overseas acquisition, he said.
Agarwal is bullish on the metals sector in India. Vedanta is the only company in India with natural resources—30 percent of oil of the country, more than 50 percent of copper, 80 percent of zinc, 95 percent of silver and almost 60-65 percent of aluminium, he said.
“We have abundant natural resources for every metal which I talked about,” he said. Increasing domestic capacity “will have the biggest impact” on job creation, he said.