The Hindu Business Line : Copper to remain volatile: Sterlite Ind

Sterlite Industries has come out with a stellar set of quarterly results. The company attributes the numbers to a strong volume growth. The Chairman of Sterlite Industries, Mr Anil Agarwal, says all the three metals of the company have given phenomenal numbers.

On Balco, Mr Agarwal says a cheque of about Rs 1,100 crore for Balco stake buy has been given to the Government.

As regards metal prices, he says copper prices will remain volatile.

Excerpts from CNBC-TV18's exclusive interview with Mr Anil Agarwal:

Can you put those numbers in perspective in terms of volumes and realisations?

This good result has come because of a strong volume growth. In all our three metals, the numbers have been phenomenal.

Were realisations not important?

In fact, we are also in lead and silver. But I fully agree that all three have seen strong volumes, as all the projects are coming in line. The tight control over cost was very important. The commodity prices were also favourable.

Are you expecting to announce any price rise any time soon in any of your commodities for this month in particular?

We have linked all the prices with LME. I expect the prices to remain strong. But there is a great deal of volatility in copper. But I see the strong prices for both the metals.

Can you give us a target where you are seeing copper and aluminium a month down the line?

Copper is very volatile. There has been a phenomenal movement in the prices. If you look at the copper price from Q4, it has moved from $4,000 to almost $8,000, so there might be some correction. But the demand is very strong.

I think the people, who are consuming, should keep in mind these prices. In aluminium, the prices were $2,400 and now it is $2,700 and I believe these prices will continue.

Are you saying that the downturn that we saw in copper from $8,800 to $8,000 and below that was purely fund activity and not a reflection of demand and supply?

There was a 100 per cent growth in prices. So there maybe some correction. You know that the zinc prices were at $2,200. It is now at $3,600. I still feel that the demands have grown, and there is demand in Asia and it is still going to remain strong.

How much exactly will your expansion be?

We are looking to produce a million tonnes of copper, aluminium and zinc. There are two important things. We are the people, who invested $5 billion in three years time. Of this, $3 billion has already gone in. $2 billion will be put in another one and a half or two years time. After this investment, each of our metals like copper, zinc and aluminium is going to be one million tonnes. Alumna will be one and a half million tonnes.

Will these expansions be over by 2008?

We hope that by 2008 everything will be over.

Are you planning to tap the market to raise the cash of the balance $2 billion that you are going to spend?

All the funding for this project is in the position. We are not looking to raise any fund for this project.

Any update on the Balco stake sale?

If one looks at our balance sheet, we have $2 billion in cash. All the requirements are done. The valuation is done. We are expecting further communication from the Government.

The numbers floating around is Rs 1,100 crore. Is that close to a ballpark figure?

It's around that number.

We believe that you issued a cheque and the Government is holding that out for better valuations?

When we bought the company, there was a formula that a valuer has to be appointed. We did that. Whatever the number that has come, we have sent a cheque. So everything is in the place. We would go along, whenever we hear from the Government.

The Government seems to think that Rs 1,100 crore is not enough? Are you willing to pay more?

As far as we are concerned, this is absolutely as per the agreement. We are a public company and we have to go as per the agreement. We have issued the cheque. We have no information as to whether they have cashed that cheque or not.

How about the Vedanta's plan in Orissa; the Government has given you clearance? When do you expect to set up the project?

We are putting up an aluminium smelter of 5,00,000 tonne. This is the single largest project in the world. We have already started the work on the site.

What is the timetable for the completion of that project?

It is about 18 months to two years.