NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Business Overview
Vedanta Limited and its
consolidated subsidiaries is a diversified natural resource group engaged in exploring, extracting and processing minerals and oil and gas. The Group engages in the exploration, production and sale of zinc, lead, silver, copper, aluminium, iron ore
and oil and gas and have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and UAE. The Group is also in the business of commercial power generation, steel manufacturing and port operations in India and manufacturing of
glass substrate in South Korea and Taiwan.
Vedanta Limited is majority owned by Twin Star Holdings Limited (Twin Star), Finsider
International Company Limited (Finsider), West Globe Limited (West Globe) and Welter Trading Limited (Welter) which are in turn wholly-owned subsidiaries of Vedanta Resources PLC, which was a public limited
company incorporated in the United Kingdom and listed on the London Stock Exchange (Vedanta has been delisted from London Stock Exchange on October 1, 2018 and is renamed as Vedanta Resources Limited with effect from
October 29, 2018). Twin Star, Finsider, West Globe and Welter held 37.1%, 10.8%, 1.2% and 1.0% respectively of Vedanta Limited equity as at September 30, 2018.
The Groups zinc India business is owned and operated by Hindustan Zinc Limited (HZL) in which it has a 64.9% interest as at
September 30, 2018. HZLs operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one pyro metallurgical lead-zinc smelter, eight sulphuric acid plants, a silver refinery
and six captive power plants and two solar plants in the State of Rajasthan in Northwest India and one zinc ingot processing and refining plant at Haridwar and one silver refinery, one zinc ingot processing and refining plant and one lead ingot
processing and refining plant at Pantnagar in the State of Uttarakhand in North India.
The Groups zinc international business is comprised of
Skorpion mine and refinery in Namibia operated through THL Zinc Namibia Holdings (Proprietary) Limited (Skorpion), Lisheen mine in Ireland operated through Vedanta Lisheen Holdings Limited (Lisheen) and Black Mountain Mining
(Proprietary) Limited (BMM), whose assets include the operational Black Mountain mine and the Gamsberg mine project located in South Africa. The Group has 100% interest in Skorpion, 74% interest in BMM and 100% interest in Lisheen (which
owns the Lisheen mine in Ireland that ceased operations in December 2015) as at September 30, 2018.
The Groups oil and gas business is owned
and operated by the Company (prior to merger this was owned and operated by erstwhile Cairn India Limited) and its subsidiaries Cairn Energy Hydrocarbons Limited and engaged in business of exploration and development and production of oil and gas.
The Group has a diversified asset base with six blocks, one in state of Rajasthan in India, one on the west coast of India, three on the east coast of India and one in South Africa.
The Groups iron ore business is owned by the Company and by two wholly owned subsidiaries, Sesa Resources Limited and Sesa Mining Corporation Private
Limited, and consists of exploration, mining and processing of iron ore, pig iron and metallurgical coke and generation of power. Operations are being carried out at Narrain mine, situated at state of Karnataka in India, a metallurgical coke and pig
iron plant in state of Goa in India and also has a power plant in state of Goa in India for captive use. Pursuant to Honourable Supreme Court order, operations at Codli group, Bicholim mine, Surla mine and the Sonshi group of mines in state of Goa
are currently suspended. The Groups iron ore business includes Western Cluster Limited (WCL) in Liberia which has iron ore assets and is a wholly owned subsidiary of the Group. WCLs assets include development rights to
western cluster and a network of iron ore deposits in West Africa.
The Groups copper business is owned and operated by the Company, Copper Mines of
Tasmania Pty Ltd (CMT) and Fujairah Gold FZC and is principally one of custom smelting and includes a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants at
Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India. In addition, the Group owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, CMT and a precious metal refinery
and copper rod plant in Fujairah through its subsidiary Fujairah Gold FZC in the UAE. The operations of Mt Lyell copper mine were suspended in January 2014 following a mud slide incident and the operations at Mt Lyell copper mine have been put into
care and maintenance since July 9, 2014 following a rock fall incident in June 2014.
The Groups copper business has received an order from the
Tamil Nadu Pollution Control Board (TNPCB) on April 09, 2018, rejecting the Companys application for renewal of consent to operate under the Air and Water Acts for the 400,000 tpa copper smelter plant in Tuticorin for want of
further clarification and consequently the operations were suspended. The Company has filed an appeal with TNPCB Appellate authority against the said order. During the pendency of the appeal, TNPCB through its order dated May 23, 2018 ordered
for disconnection of electricity supply and closure of our copper smelter plant. Post such order, the state government on May 28, 2018 ordered the permanent closure of the plant. The Company is taking all the necessary steps to restart its
operations in Tuticorin (Refer note 14.F.iii).The Groups aluminium business is owned and operated by the Company and by Bharat Aluminium Company Limited (BALCO) in which it has a 51% interest as at September 30, 2018. The
aluminium operations include a refinery and a 75 MW captive power plant at Lanjigarh and a smelter and 1215 MW captive power plant at Jharsuguda both situated in the State of Odisha in India. The pots are in the stage of commissioning in the 1.25
mtpa
Jharsuguda-II
Aluminium smelter with 950 pots having been commissioned by September 30, 2018. Refinery expansion project being set up at Lanjigarh was on hold since October 20, 2010, as the MoEF
had directed the Company to hold from further expansion. However, environment clearance (EC) for the Lanjigarh expansion project has been received in the quarter ending December 31, 2015. Currently, the Company continues to explore the
feasibility of expanding the alumina refinery capacity, from 2 to 4 million and then up to 6 million tonnes per annum, subject to bauxite availability and regulatory approvals. BALCOs partially integrated aluminium operations are
comprised of two bauxite mines, 1410 MW power plant, smelting and fabrication facilities in central India. The
BALCO-II
smelter was commissioned, with all 336 pots operational in August 2016.
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