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STRATEGIC PRIORITIES AND UPDATE

Home > Performance Review > Strategic Priorities and Update

AREAS WE FOCUS ON TO DELIVER SUSTAINED VALUE

Our five strategic focus areas reflect our integrated thinking that connects our purpose with our performance. These strategic areas help us leverage our strengths, take advantage of opportunities, manage risks and navigate business cycles while taking into consideration the material concerns of our heterogeneous stakeholders. Here we map the progress we have made against each focus area and the way forward.

Continued focus on world-class ESG performance

We operate as a responsible business with a focus on zero harm, zero discharge and zero waste. Our revised vision is “Transforming for Good” around three focus areas transforming communities, transforming the planet, and transforming the workplace. Through these focus areas, we work towards generating positive value for stakeholders and minimising the impact on the environment

FY 2023 Update

Total Nand Ghar in FY 2023 – 4,533
Skill-based training for 5,400 individuals
GHG emissions increased by 4.6% YoY
Water positivity ratio 0.62
162% HVLT waste utilization

13 Fatalities
LTIFR - 0.52
TRIFR - 1.20
Women employees - 14.0%
Women in leadership positions - 9%
ESG rating improvement in MSCI, DJSI, Sustainalytics and CDP water

Vision

Transforming Communities

Aim 1: Responsible business decisions based around community welfare
Aim 2: Empowering over 2.5 million families with enhanced skillsets
Aim 3: Uplifting over 100 million women and children through Education, Nutrition, Healthcare, and Welfare

Transforming the Planet

Aim 4: Net-carbon neutrality by 2050 or sooner
Aim 5: Achieving net water positivity by 2030
Aim 6: Innovating for a greener business model

Transforming the Workplace

Aim 7: Prioritising safety and health of all employees
Aim 8: Promote gender parity, diversity, and inclusivity
Aim 9: Adhere to global business standards of corporate governance

Objectives for FY 2025

Target to enhance skillsets of ~1,600 families
Target to positively impact ~13,000 women and children through programmes in education, healthcare, nutrition
20% reduction in metals and mining intensity
900 MW RE RTC in operations
Investment in energy transition - ₹2,700 crore
Water positivity ratio - 0.83
Legacy waste - 29.6 million tonnes
Habitat restoration - 2,300 hectares
Zero fatalities
LTIFR - 0.48
Total women employees - 19%
Women in leadership roles - 20%
Zero governance issues

Objectives for FY 2030

~2.5 million families with enhanced skillsets
25% absolute reduction GHG emissions vs FY 2021 baseline
2.5 GW RE RTC in operations
Water positivity ratio – 0.98
Legacy waste - 7 million tonnes
Habitat restoration - ~2,500 hectares
Zero fatalities
LTIFR - 0.15
Total women employees - 20%
Women in leadership roles - 40%
Zero governance issues

KPIs

Total Number of Nand Ghars
Skillset imparted to families
Impact of CSR programmes in education, healthcare, nutrition
Annual GHG emissions
RE power in operations
Metals and Mining GHG intensity
Annual waste utilization

Water positivity ratio
Habitat restoration
Fatalities
LTIFR
% of women employees
% of women in leadership roles
Zero governance-related issues
Annual disclosures

Risks

R12

R13

Augment our Reserves & Resources (R&R) base

We look at ways to expand our R&R base through targeted and disciplined exploration programmes. Our exploration teams aim to discover mineral and oil deposits in a safe and responsible manner and replenish the resources that support our future growth ambitions

FY 2023 Update

Zinc India

Total Ore Reserves stand at 173.5 million tonnes (net of depletion of FY 2023 production of 16.7 million tonnes) at the end of FY 2023 (161.2 million tonnes at the end of FY 2022) due to heightened focus on resource- to-reserve conversion during the year. Exclusive Mineral Resource totalled 286.6 million tonnes
Combined R&R were estimated to be 460.1 million tonnes, containing 30.8 million tonnes of zinc-lead metal and 855.9 million ounces of silver
Overall mine life continues to be more than 25 years

Zinc International

Combined mineral resources and ore reserves estimated at 659 million tonnes, containing 34.87 million tonnes of metal

Oil & Gas

Secured 8 blocks in Discovered Small Fields (DSF)-III bid round and one block in special Coal Bed Methane (CBM) round 2021
Exploration and appraisal wells drilled across PSC and OALP blocks
Two exploration successes in Ravva Infill drilling campaign
Drilled first shale exploration well in Rajasthan to unlock the potential in Barmer basin
Gross 2P reserves and 2C resources of 1,156 mmboe

Objectives for FY 2024

Zinc India

Target generation and drill testing: Zawar, RD-SK, RA Mine
Exploration plan to enhance the mineral resource by 15 million tonnes Ore
Acquiring new potential areas through auction
Ore reserves upgradation for sustained mine production for next 10 years
Use of AI & ML and Advance Geophysics for target generation

Zinc International

Execution of 76 km of drilling across greenfield and brownfield projects in RSA and Namibia
Addition and upgradation of 68.0 million tonnes of ore (4 million tonnes of metal)

Oil & Gas

Establish the resource pool around OALP blocks to have incremental development opportunities in the portfolio
Establish commercial potential of shale
Establish the full potential of ASP in Mangala Bhagyam and Aishwariya for commercial development

Objectives for FY 2025

Zinc India

Securing new tenements for R&R growth
Target generation through the application of AI & ML along with advanced geophysics
Enhancement of the mineral resource by 40 million tonnes ore with contained metal of 2 million tonnes and upgrade ore reserves to 42 million tonnes, which will lead to total R&R of 500+ million tonnes with ~35 million tonnes metal

Zinc International

Execution of 76 km of drilling across greenfield and brownfield projects in RSA and Namibia
Addition and upgradation of 68.0 million tonnes of ore (4 million tonnes of metal)

Oil & Gas

Establish the resource pool around OALP blocks to have incremental development opportunities in the portfolio
Establish commercial potential of shale
Establish the full potential of ASP in Mangala Bhagyam and Aishwariya for commercial development

Objectives for FY 2030

Zinc India

Retain existing mining leases in HZL portfolio while acquiring new potential areas through auction
Attain R&R metal of ~40 million tonnes in HZL portfolio

Oil & Gas

Establish diversified R&R portfolio to support the vision of contributing to India’s 50% of domestic O&G production

KPIs

Total R&R in Zinc India and Zinc International
Total 2P+2C Reserves & Resources in O&G

Risks

Delivering on growth opportunities

We are focussed on growing our operations organically/inorganically by developing brownfield opportunities in our existing portfolio. Our large, well-diversified, low-cost and long-life asset portfolio offers us attractive expansion opportunities, which are evaluated based on our return criteria for long-term value creation for all stakeholders.

FY 2023 Update

Zinc India

Total mine development increased by 4% to 110.6 km in FY 2023
Zawar Mines has achieved highest ever MIC of 165 kt in FY 2023
Skip handling system upgradation resulting in capacity enhancement by 32% to 110 kt/month
Rampura Agucha Mines achieved ever highest 534 kt MIC in FY 2023
Highest-ever mined metal production 1,062 kt in FY 2023
Highest-ever refined metal production at 1,032 kt in FY 2023
Highest-ever silver production of 714 tonnes in FY 2023
Successfully conducted a public hearing at Chanderiya to obtain EC for expansion of CLZS unit
Increment of 20.5% production through complete cell house revamp at Zinc Smelter Debari (ZSD)
Pantnagar Metal Plant producing green zinc using 100% renewable energy produced from hydropower
Waste management through Jarosite utilisation in the cement industry by modification in present circuits

Zinc International

Significant ramp up in Gamsberg production with 208 kt zinc MIC in FY 2023

Oil & Gas

Exploration drilling ongoing across basins. Exploration success in Ravva Infill campaign
Production commenced from Jaya discovery in OALP Cambay region
Infill drilling in Bhagyam, Aishwariya, Tight Oil (ABH), Tight Gas (RDG), Satellite Field (NI) and Offshore (Ravva & Cambay) to augment reserves and mitigate natural decline
38 wells drilled across all assets

Aluminium

Ramp up of Jharsuguda facility
Commissioning of new 120 KTPA Billet line
Operationalisation of Jamkhani coal mine
Declared preferred bidder for Ghogharpalli coal block & CMDPA executed for Barra coal block
LoI issued for Sijimali bauxite block

Objectives for FY 2024

Zinc India

Further ramp-up of underground mines towards their design capacity of 1.2 MTPA
Combined paste-fill and dry tailing plant at Rajpura Dariba, which will help increase ore production from 1.5 MTPA to 2 MTPA
Migration to 100% mechanised charging at Zawar leading to improved safety, faster charging, increased pull per blast
Construction and commissioning of new ZLD plant at Agucha and Zawar
New beneficiation plant to start at RDM to increase treatment capacity from 1.1 MTPA to 1.5 MTPA
Hydraulic fill plant hook up with Mill 2 at Zawar to expedite filling at Mochia & Balaria mines and improve ore recovery
New portal commencement at Zawarmala to enhance production up to 2 MTPA
With supporting MIC flow, smelters are geared to touch approx. 1,050 - 1,075 kt
Capacity expansion through major overhauling of Roaster-3 and erection of Roaster-6
Debottlenecking of Debari Cell house and other efficiency improvement initiatives to achieve overall FG production of 1.1 MTPA
Best-in-class new HZDA production facility (HZAPL) to cater to demand of Indian market

Zinc International

Gamsberg Phase 2 project approved by the Vedanta Board. Project includes the mining expansion from 4 MTPA to 8 MTPA and construction of new concentrator plant of 4 MTPA, taking the total capacity to 8 MTPA. MIC production will be 200 KTPA, taking the total South Africa production to >500 KTPA. Target date of completion of project is 21 months
Skorpion Refinery conversion – awaiting confirmation of power tariff to take the final decision before beginning on-ground execution in FY 2024
Black Mountain Iron Ore project intends to recover iron ore (magnetite) from the BMM tailings on track. Best quality iron ore will be produced from the new plant with Fe grade >68%. First production is expected in August 2023

Oil & Gas

Exploration and appraisal drilling in OALP and PSC blocks to unlock resource potential
Monetisation of discoveries notified in OALP blocks
Commence ASP project execution in the Mangala field to monetise reserves
Infill well projects across producing fields to add reserves and mitigate natural decline

Aluminium

Commissioning of 3 MTPA alumina refinery
JSG VAP expansion to 1.6 MTPA and Balco VAP expansion to 1 MTPA. To be completed by Q3 FY 2024
Operationalise Kuraloi (A) North & operational readiness for Radhikapur West

Objectives for FY 2025

Zinc India

Ramp-up of underground mines to reach 1.25 MTPA capacity
Study on alternate access to the portal at RAM
Commissioning of vertical conveyor at SKM to mine high-grade shaft pillar area
Transition to one-third BEV deployment at RA & SK Mines
Completion of Mill 3 at Zawar to increase beneficiation capacity
Establishment of a new tailing dam at Zawar Mines
Commissioning of Roaster-6
Set up 510 KTPA Fertiliser plant in Chanderiya
Up to 450 MW green energy sourcing in operations

Zinc International

Full ramp-up of Gamsberg Phase 2 project in FY 2025
Skorpion Refinery conversion – Completion of conversion project expected by FY 2025
Gamsberg Smelter planned to treat all zinc concentrate from current operation. Planned first production in FY 2026. First phase planned to produce 300 KTPA

Oil & Gas

Complete execution of Alkaline Surfactant Polymer (ASP) project at Mangala to deliver incremental volume
Monetisation of discoveries from OALP, DSF and PSC block
Commence ASP project execution in the Bhagyam and Aishwariya field to monetise reserves
Commence shale monetization
Establish secondary methods of oil recovery in offshore fields

Aluminium

BALCO 435 KTPA
100% value-added product portfolio
Operationalisation of Radhikapur West Coal Block
Start of supplies from Sijimali bauxite block

Objectives for FY 2030

Zinc India

Ramp-up of underground mines from 1.5 MTPA capacity
Look for new mining leases
Advocacy for opening new mining sites
Addition of one more smelter to take the overall capacity to 1.5 MTPA

Zinc International

Gergarub mining and concentrator plant planned to be in production by FY 2025, delivering MIC of 100 KTPA
Gamsberg mining operations from underground to increase throughput from 8 MTPA to 9 MTPA from current processing plants
Iron Ore Phase 2: Construction of an additional plant to treat 2 MTPA of current tailings storage facility with opportunity to construct a pig iron plant

Oil & Gas

Commence full field scale ASP project execution in Rajasthan field to monetise reserves
Continuation of monetisation opportunities across asset portfolio (supported by organic and inorganic strategies)

Aluminium

Debottleneck Lanjigarh Refinery Capacity from 5 to 6 MTPA
Increase Jharsuguda capacity to 2 MTPA through debottlenecking & asset reliability projects
Operationalisation of all requisite coal and bauxite blocks

KPIs

Volume
Revenue
ROCE

FCF post-capex
Growth capex

Risks

R12

Optimise capital allocation and maintain a strong balance sheet

Our focus is on generating strong business cashflows and maintaining stringent capital discipline in investing in profitable high IRR projects. Our aim is to maintain a strong balance sheet through proactive liability management. We also review all investments (organic and acquisitions) based on our stringent capital allocation framework to maximise shareholder returns

FY 2023 Update

Free cash flow (FCF) at ₹18,077 crore
Net debt at ₹45,260 crore
Net Debt/EBITDA at 1.3x on a consolidated basis
Dividend worth ₹101.5/share distributed by VEDL

Objectives for FY 2024

Zinc India

Generate healthy free cash flow from our operations
Disciplined capex across projects to generate healthy ROCE
Improve credit ratings
Reduce working capital

KPIs

FCF post-capex
Net Debt/EBITDA (Consolidated basis)
EPS (before exceptional items)
Interest cover ratio
Dividend

Risks

R10

R11

R13

Operational excellence and cost leadership

We strive for all-round operational excellence to achieve benchmark performance across our business, by debottlenecking our assets to enhance production, supported by improved digital and technology solutions. Our efforts are focussed on enhancing profitability by optimising our cost and improving realisations through prudent marketing strategies

FY 2023 Update

Zinc India

Record ore production of 16.7 million tonnes
Mined metal production of 1,062 kt and refined zinc-lead production of 1,032 kt
APC commissioned at all the beneficiation plants of RA
Smelters achieving designed recovery
Volume enhancement through operations of Pyro plant on Lead-Zinc mode for 7 months
To mitigate higher coal costs, our CPPs were shut down and power was procured from the grid

Zinc International

BMM achieved consistent production in FY 2023 (65 kt)
Gamsberg ramped up significantly with 208 kt production in FY 2023 and several best performances in ore milled tonnes, mill throughput and plant availability
Skorpion remained under care and maintenance following geotechnical instabilities in the open pit

Oil & Gas

Average gross operated production of 143 kboepd for FY 2023, down 11% YoY, owing to natural field decline
Signed 10-year extension up to 2030 for the Rajasthan block Production Sharing Contract (PSC)
Onboarded partners for end-to-end management of Operations and Maintenance (O&M) across assets with an objective to leverage expertise, introduce best-in-class practice and adopt digitalization

Aluminium

Record aluminium production at 2,291 kt, up 1% YoY
Highest ever domestic sales at 773 kt, 14% increase over previous best achieved
Alumina production at Lanjigarh refinery at 1,793 kt, down 9% YoY due to shutdown of calciners
Alumina COP up by 25% YoY due to increased rates of critical input commodities
FY 2023 CoP for aluminium at US$2,324 per tonne, up by 25% YoY, due to increase in commodity prices, majorly coal and carbon
Optimisation of gross working capital

Objectives for FY 2024

Zinc India

Maintain cost of production between US$1,125 - US$1,175 per tonne through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitalization

Zinc International

Ramp up Gamsberg to design a capacity of 250 KTPA in FY 2024
BMM debottlenecking plant to achieve 2 million tonnes ore production levels despite low grades
Restart Skorpion post-completion of geotechnical studies and feasibility completion of imported zinc oxides

Oil & Gas

Manage natural decline through near infill well programme across fields
Stabilise end-to-end Operations and Maintenance (O&M) across assets with partners and deliver value accretion
Continue to operate at a low cost-base and generate free cash flow post capex

Aluminium

Highest ever production from refinery, start of alumina production from 3 MTPA refinery
Highest ever aluminium production projected at 2,280-2,350 kt
Significant reduction in aluminium production COP, unlocking potential in operational & buying efficiency
Improve raw material security & local materialisation (bauxite & coal)
Increased focus on asset integrity and optimisation, quality, innovation, and digitalisation through Centre of Excellence

Objectives for FY 2025

Zinc India

Maintain cost of production at a low level through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitalization
Engineering of Dariba Lead Cellhouse to reduce cost and increase efficiency and recovery

Zinc International

500 KTPA production from South Africa at a low cost of production
150 KTPA metal production from Skorpion

Oil & Gas

Increase production from existing assets through the use of leading edge technologies, large-scale AIML (artificial intelligence and machine learning enabled base)
End-to-end output-based Operations and Maintenance (O&M) mode
Continue to operate at a low cost base and generate free cash flow post-capex

Aluminium

Lower hot metal cost of production through increased domestic Alumina & captive coal consumption
Continued focus on quality, asset reliability and optimisation, digitalisation, innovation, and R&D

Objectives for FY 2030

Zinc India

Maintain cost of production at below US$1,000 per tonne through efficient ore hauling, higher volume & grades and higher productivity through ongoing efforts in automation and digitalization
Elimination of waste generation by gainful utilisation and recycling
Deploy new innovation and technology for holding benchmark operation

Oil & Gas

Leverage win-win partnership models for operations through global technology leaders to achieve best-in-class operational efficiencies
Continue to operate at a low cost-base and generate free cash flow post-capex

Aluminium