Vedanta Resources is a FTSE 250 company headed by Non Resident Indian Anil Agarwal, formerly one of Britain’s richest people and 46th top Tory donor in 2016, and 69.99% owned by him and his family (as of May 2015) through a series of tax havens and holding companies. It was launched on the London Stock Exchange in 2003 with the assistance of BHP Billiton’s Brian Gilbertson and the UK’s Department for International Development (DfID) and Department of Trade and Industry (DTI), who continue with their support for the company. Vedanta is a high debt company with debt currently 2.5 times its EBIDTA. The company had $8.5 billion net, and $16.7 billion gross debt as of June 2015.
Blood on Vedanta’s hands:
Vedanta has mines, refineries and factories in various states in India – including Odisha, Chhattisgarh, Tamil Nadu, Rajasthan and Goa – as well as in Zambia, Liberia, South Africa, Namibia, Australia and Ireland. It has historically focused largely on aluminium but has now expanded to Iron ore, copper, zinc and now even oil which it is drilling in Sri Lanka, Rajasthan and African blocks. The company is being opposed everywhere it operates for violations of law, pollution and human rights abuses. Some of these abuses are detailed below.
In Korba, Chhattisgarh, India between 40 and 100 workers died at Vedanta subsidiary BALCO’s aluminium smelter complex when a chimney under construction collapsed on them in September 2009. The subsequent judicial inquiry into the incident found Vedanta guilty of negligence and using sub-standard materials and construction methods. However, Vedanta’s lawyers suppressed the report which was leaked by activists in 2014. Vedanta bought BALCO’s alumina refinery, smelter and bauxite mines from the Indian government for Rs 551.5 crores in 2001 when it was worth between Rs 3500 and Rs 5000 crores . 7000 workers opposed the sale by holding a landmark 61 day strike. Since privatisation work conditions have worsened – wages have been slashed, unionised workers are losing jobs in favour of contract labour and there are more accidents.
In Odisha, India a ten year struggle by indigenous communities and farmers led to a historic victory in 2014 when Vedanta was stopped from mining the sacred Niyamgiri hills for bauxite, costing the company up to $10 billion in lost investment. Vedanta Aluminium Ltd had built the 1 mtpa Lanjigarh refinery at the base of the Niyamgiri hills in 2004, and even expanded it six fold, despite having no permission to mine bauxite from the hills above. Vedanta’s launch on the London Stock Exchange in 2003 was based on the impression given to financiers that they had permission to mine Niyamgiri. Foil Vedanta was closely involved in this unique struggle.
In Zambia Vedanta bought subsidiary Konkola Copper Mines (KCM) from Anglo American in 2004 for just $25 million in cash. In the first three months of operation they had made profits of $26 million. The true valuation of KCM’s 79.4% share in the mines and factories is estimated at between $705 and $1460 million. Vedanta have long claimed that they are making a loss on Konkola Copper Mines and hence pay virtually no tax. Their 2013 accounts show a $6.3 million loss. However in April 2014 a video released by Foil Vedanta showed Anil Agarwal bragging to the Jain International Trade Organisation in Bangalore that he was making between $500 million and $1 billion a year from KCM. Subsequent investigations discovered how Vedanta was hiding its profits by selling copper vastly underpriced to its own subsidiary – Fujairah Gold in Dubai, run by Anil Agarwal’s son Agnivesh. This is called ‘transfer pricing’ and is a violation of the ‘arms length principle’.
In 2006 KCM released pure acid (1.5 pH) and toxic mine waste into the river Kafue over several days, turning the river which provides drinking water for 40,000 people green with 10x acceptable levels of copper, 770x manganese and 100x cobalt. Victims of the water pollution suffered kidney damage, miscarriages and other illness. 2000 people were awarded $2 million in damages by the Zambian High Court in 2011 but Vedanta appealed and the case was only heard in the Supreme Court as a result of activist pressure (including Foil Vedanta) in 2014 and ’15. The final judgement found Vedanta guilty but reduced the damages to close to nothing. Meanwhile KCM continue to regularly release untreated waste into the river with impunity, and many local communities face contaminated water daily.
In Goa, India, Vedanta’s iron ore mining subsidiary Sesa Goa was the largest company indicted by the Shah Commission in 2012 for illegal mining, including failure to obtain leases or environmental clearance, and exporting exporting 150 million tonnes of iron ore from Goa in 2010/11 while only declaring 76 million, their agreed export allowance. In June 2009 a Sesa Goa pit wall collapsed drowning Advalpal village in toxic mine waste. Following the disaster 9 year old local boy Akaash Naik filed a petition to stop the mine and mass protests were held, successfully halting it later that year. Two more major mine waste floods occurred in Mulgao and Bicholim in 2011.
In Tuticorin, Tamil Nadu, India, Vedanta subsidiary Sterlite’s copper smelter has one of the worst records of all Vedanta’s projects. The second hand plant imported from Chile was turned down by four states before settling in Tamil Nadu. In 2013 a major leak of sulphur gas from the plant affected thousands in the town, leading to mass protests by local taxi and fishermens trade unions among others, and the temporary closure of the plant. 16 workers died at the plant between 2007 & 2011 and the fatality rate remains very high. Journalists and local people have reported on illegal waste dumps around the town, and investigations of port data revealed that Vedanta were using highly contaminated imported copper concentrates, producing 2.2 tonnes of Uranium and 441 tonnes of arsenic between 2009 and 10 alone.
In Rajasthan, India, Vedanta bought public company Hindustan Zinc Limited (HZL) for only 600 crore rupees (£64 million), using a valuation by BNP Paribas which is estimated to be more than 20 times undervalued. The true value of HZL is estimated to be 24,000 crore rupees (£2.5 billion). Vedanta are now attempting to buy the remaining 35% from the government which would free up $4.6 billion of cash reserves which there is a strong risk they will use to pay off Vedanta Group debts.
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