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Vedanta Sights Gold, Opens Purse Strings

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  • Vedanta Sights Gold, Opens Purse Strings

    VEDANTA SIGHTS GOLD, OPENS PURSE STRINGS
    Suresh Nair

    Economic Times, India
    May 18 2006

    Times News Network[ Thursday, May 18, 2006 02:00:58 Am]

    MUMBAI: Vedanta Resources plans to enter the precious metals business
    by investing in gold as the sky-rocketing prices of the commodity
    tempt India's leading non-ferrous metal producer.

    The London-listed Vedanta may invest in Sterlite Gold, which is
    now controlled by the Anil Agarwal family holding company - Volcan
    Investments - and is out of the Vedanta fold. Sterlite Gold's
    Armenian operation currently require $70-80 m for expanding its
    operation. Vedanta is likely to step in by investing the money and
    thereby picking up a stake in the company.

    The Armenian operations are controlled through Ararat Gold Recovery
    Company (AGRC), a gold mining and processing company in Armenia,
    and is fully owned by Sterlite Gold. Sources said the group is yet
    to decide on the move and the route to be followed. "A decision on
    whether to bring in funds through Vedanta or through the holding
    company is being debated," the source said.

    Vedanta currently has a negligible presence in gold but is a major
    player in copper, zinc and aluminium. The only downside of investing
    in the gold , is that current prices of the metal are at an all-time
    high. Entry into gold production will, however give it better
    valuations as the future outlook for gold is very positive.

    AGRC has two gold mines at Meghradzor and Zod and a processing plant
    at Ararat in Armenia. It has plans of shifting and upgradation of
    some facilities of t h e Ararat plant and to build a brand new plant
    at Zod, which can treat gold ore.

    The mine life, based upon proven reserves and proposed capacity
    expansion, will be more than 10 years.The plans envisage shifting and
    upgradation of some facilities of t h e Ararat plant and to build a
    brand new plant at Zod, which can treat gold ores.AGRC is also trying
    its luck with possible diamond deposits at Zod.
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