AL Circle's weekly wrap
Vedanta Limited secures over USD 1 billion through successful QIP
Vedanta Limited, the Indian multinational mining and metal giant, has achieved a significant financial feat. The company successfully raised over USD 1 billion (INR 8,500 crore) through a Qualified Institutions Placement (QIP), as revealed in a recent stock exchange filing. The QIP, which involved 19.31 crore equity shares, was priced at INR 440 per share, a 4.61 per cent discount to the floor price of INR 461.26 per equity share. This successful issue concluded on July 19.
The QIP, which saw the participation of major players in the investment industry, including the Abu Dhabi Investment Authority (ADIA), Goldman Sachs AMC, Nippon Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, ICICI Mutual Fund, Aditya Birla Mutual Fund, and Mirae Mutual Fund, is a testament to the confidence these investors have in Vedanta Limited's future. Nippon Mutual Fund, for instance, received 9.11 per cent of the total issue size, while Morgan Stanley and SBI Mutual Fund were allotted 8.62 per cent and 7.88 per cent of the issue, respectively.
This capital raise marks a significant financial milestone for Vedanta Limited, bolstering its financial strength and positioning it for future growth and development in the mining sector.
Qualified Institutional Placement (QIP) is a capital-raising tool primarily used in India and other parts of southern Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a qualified Institutional Buyer (QIB).
Vedanta's chairman, Anil Agarwal, emphasised the growing investor confidence in the company's strategic growth and operational excellence. The funds raised will help de-leverage Vedanta's balance sheet and support the company's near-term goal of achieving $10 billion in EBITDA. The Qualified Institutional Placement (QIP) attracted significant interest from foreign institutional investors, mutual funds, insurance companies, and other investors. The proceeds will also fund Vedanta's various growth projects, including an aluminium smelter and refinery, new oil and gas investments, and expanding its steel and iron ore businesses.
Brazilian primary aluminium industry climbs from 12th to 8th rank, regaining production and investment capacity
Brazil has reclaimed?its position as a top ten?player in the global aluminium industry, ramping up the production of primary aluminium and raw materials. Once, the country, which used to be the world's sixth largest aluminium producer, lost its momentum for an interim period and ranked 12th in 2022. However, in the subsequent year, Brazil's aluminium industry showed resurgence through advanced strategies and transformative initiatives in operations.
Overview and analysis of primary aluminium production
From the start of 2023, the Brazilian aluminium industry has been steadfast in raising domestic production with a strong focus on reducing reliance on imported products. The country successfully increased its primary aluminium production by 26 per cent to 1,021.7 thousand tonnes versus 810.9 thousand tonnes in 2022. With this production hike, Brazil may not have regained its sixth position among the top ten global producers, but it ranked up to 8th from 12th.
The increase in Brazil's primary aluminium production in 2023 was the sole result of the resumption of the Alumar smelter, jointly owned by Alcoa and Sounth32. After remaining idle for seven years, the smelter recommenced with renovated potlines having an annual installed capacity of 1.4 million tonnes. Read the full news here.
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RUSAL achieves 100% green aluminium production
RUSAL, one of the world's largest aluminium producers, has verified the carbon footprint of its products, reaffirming its status as a leading global low-carbon aluminium producer. TüV AUSTRIA Standards & Compliance, one of the world's foremost providers of certification, testing, inspection, and verification services, conducted the independent verification of greenhouse gas emissions.
The analysis confirmed that 100 per cent of RUSAL's metal meets the low-carbon aluminium (LCA) benchmark of less than 4 t CO2/t within Scopes 1&2, aligning with benchmarks from leading international analytical agencies such as Fastmarkets and S&P Global. Additionally, in 2023, RUSAL improved the full-scope carbon footprint of its LCA brand ALLOW to 5.9 tons of CO2?equivalent per ton of metal, down from 6.1 tonnes?the previous year.
This remarkable achievement is primarily due to the use of renewable energy sources, especially hydropower, to power RUSAL's production facilities and an extensive modernisation program for aluminium smelters. The program includes the renewal of electrolysers, transition to pre-baked anode technology, installation of new gas emissions treatment facilities, and improvements in air monitoring systems. In 2023 alone, RUSAL retrofitted 309 electrolysers across its smelters. The modernisation of alumina assets, which significantly contribute to the carbon footprint of the final product, is also a key focus.
RUSAL's ALLOW INERTA? brand, featuring the lowest carbon footprint in the industry, is one of the frontrunners of RUSAL's decarbonisation efforts. Its cutting-edge production technology significantly reduces the total volume of greenhouse gas emissions during the electrolysis process. This solution allows for reducing carbon dioxide emissions within Scopes 1 and 2 to 0.01 tonnes of CO2?equivalent per tonne of aluminium (compared to the industry average of 11.4 tonnes of CO2?equivalent).
Increasing the recycled content in primary products is another critical component of RUSAL's decarbonisation strategy. A major milestone in this area is the production of primary equivalent foundry alloys (PEFA) with a 30 per cent?share of secondary aluminium content, which has successfully launched and been delivered to its first customers.
As a low-carbon aluminium producer, RUSAL is at the forefront of developing a green economy. Its decarbonisation strategy is fully in line with the aspirations of the largest international aluminium-consuming companies to reduce their carbon footprint and achieve carbon neutrality.
Other major news of the week:
AL Circle launches its 25th e-Magazine, "Advanced Industrial Technologies in the Aluminium Industry"
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