Occupational health & safety

At Vedanta Zinc International (VZI), we take the health and safety of our employees and stakeholders very seriously and we remain committed to communicating timeously and transparently to all stakeholders.

Airborne particulate management remains a key focus in reducing lead and silica dust exposures of employees (Exposure Reduction to Carcinogenic). VZI had 17 blood lead withdrawals for FY 2023, against more stringent limits than required by law. We have strengthened our Employee Wellness Programme, focussing on the increased participation of employees and communities in VCT for Aids/HIV, blood donation and wellness.

VZI is embarking on a real-time monitoring strategy and additional controls at source to reduce and eliminate exposures to both silica and lead.

The VZI LTIFR improved from 1.41 in FY 2022 to 0.75 in FY 2023. The TRIFR improved from 5.6 in FY 2022 to 3.1 in FY 2023, both improving by 46% and 44% respectively. VZI remained fatal free during FY 2023, and Black Mountain Mine achieved LTI free year. These remarkable achievements were necessitated by VZI’s strong commitment to Zero harm principle and a belief that everybody coming to VZI must return home safe and healthy every day.

Leading Indicators reporting, Leadership Engagements and Critical Risk Management were the strategic initiatives central to these record setting achievements. VZI shall, in collaboration with the Mineral Council and Vedanta Group continue to seek for leading practices to continually improve our HSE performance.

Environment

VZI has secured Portion 1 of the farm Wortel 42 as the fifth Biodiversity Offset Property and has presented the property to the Department of Agriculture, Environmental Affairs, Rural Development and Land Reform (DAERDLR). Once the property is transferred to BMM’s name, there will be declaration of this property as a Protected Area, as an inclusion to the Gamsberg Nature Reserve Protected Area under the National Environmental Management Protected Areas Act, 2003 (Act No. 57 of 2003). This is a requirement of Clause of the Biodiversity Offset Agreement (BOA). BMM is in negotiations with landowners to secure the remaining two farms by 1 April 2024 to ensure compliance to Clause 6 of the BOA.

The Second Independent Audit on the Implementation of the BOA between BMM and DAERDLR commenced October 2022 and the draft reports have been submitted to the implementation parties (BMM and DAERDLR) for comments and review. The final report will be available by end of March 2023 with a large improvement since the previous audit. The final report will be published in VZI Annual Report and on the VZI webpage as required by the BOA.

The implementation of the nine Biodiversity Monitoring Protocols has been completed for a test year and will be revised and updated in April 2023 for long-term implementation. BMM are awaiting verification of the status of No Net Loss that was monitored and measured as part of the implementation of the Biodiversity Monitoring Protocols and a statement regarding the findings and verification will be shared.

The installation of a dedicated anti-poaching surveillance camera network, covering a circular route of more than 400 km show good results and according to statistics received from South Africa Police Services (SAPS) and the Agri Namakwaland the surveillance camera network has resulted in a large decrease in petty crime in the area. However, incidents of poaching outside the surveillance cameras are still reported on an ad hoc basis as poachers adjust their modus operandi. An Antipoaching workshop between IUCN, BMM, DAERDLR, South Africa Biodiversity Institute (SANBI), SAPS and key role players in the area are planned for April 2023.

Production performance

Operations

During FY 2023, total production stood at 2,72,713 tonnes, 22% higher YoY. This was primarily due to tonnes treated and higher recoveries.

At BMM, production was 65,112 tonnes, 25% higher YoY. This was mainly due to 8.9% higher throughput at 1.7 million tonnes, higher lead grades (3.0% vs 2.1%) and recoveries (82.8% vs 81.6%) offset by lower grades of zinc (1.8% vs 2.1%) and recoveries (71.9% vs 75.2%).

Gamsberg’s production was at 2,07,601 tonnes as the operation continues to ramp up with improved performance during current financial year. Higher production at Gamsberg YoY is attributable to 7.8% increase in throughput to 4.2 million tonnes, higher zinc grades (6.5% vs 6.2%) and recoveries (75.7% vs 69.9%).

At Skorpion Zinc engagement with technical experts to explore opportunities of safely extracting the remaining ore is ongoing. The pit optimisation work is complete. The business is currently evaluating options to restart mining.

Unit costs

Gamsberg COP excluding TcRc decreased by 12% to US$1,033 per tonne. This reflects the strength and efficiency of our operations at Zinc International. The decrease in the cost of production was driven by higher production supported by local currency depreciation against the US$ despite high input commodity inflation.

Overall Zinc COP including TcRc increased by 9% to US$1,577 per tonne, from US$1,442 per tonne in the previous year. This was mainly driven by commodity price inflation and higher treatment and refining charges, offset by higher production and local currency depreciation against the US$.

Financial performance

During the year, revenue increased by 16% to ₹5,209 crore, driven by higher sales volumes compared to FY 2022 due to 22% higher production BMM & Gamsberg, higher zinc LME prices and favourable exchange rates movement partially offset by lower lead and silver prices.

EBITDA increased by 26% to ₹1,934 crore, from ₹1,533 crore in FY 2022 also mainly on account of improved operational performance, higher zinc LME price, favourable exchange rates movement partially offset by lower lead & silver prices and increase in TC/RC.

Projects

Refinery Conversion – The Skorpion Refinery Conversion project has reached Ready-to-order phase, post completion of FEED, feasibility study, tendering activities & techno-commercial adjudication and contract finalisation. All regulatory approval is in place to start project execution.

With power tariffs being very critical for the viability of the project, discussions/negotiations are in progress with the state power utility along with the option of renewable power which is also being explored. We are only waiting for confirmation of power tariff to take the final decision and starting the execution on the ground by H1 FY 2024.

Gamsberg Phase 2 – Gamsberg Phase 2 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 and was approved by the Vedanta Board in Q4 of FY 2022. The EPC partner, Onshore, has been appointed in Q1 FY 2023, site mobilisation completed, detailed engineering is under progress and the project is in execution phase. All Major Long lead FIMs {Ball & Sag Mill (CITIC), Crusher, Floatation, Filter Presses and Thickeners Package (MO)} Orders placed.

Gamsberg Smelter – The Gamsberg Smelter Project is re‑defined with phased approach wherein 210 KTPA capacity phase 1 will be executed by repeating the available HZL smelter design incorporating necessary modifications required to treat Gamsberg Concentrate. The partner selection is in progress for various EPC/EP+C packages. We have appointed ThyssenKrupp (TKIS-India) as Owner’s engineer. The techno‑commercial proposals with Shapoorji & L&T as the prospective EP Partners. Construction Tender released on 23 November 2022.

We have received the environmental approval for the Smelter & Bulk water pipeline construction. The Smelter EC is currently under appeal phase. We are also engaging with Gov. of South Africa on the other critical success factors like SEZ, power price, sulphuric acid offtake, logistics infrastructure and balance regulatory approvals which are vital for economic feasibility of the project.

Black Mountain Iron Ore project – This is a project to recover iron ore (magnetite) from the BMM fresh tailings. EPC’s detailed engineering, procurement, earthworks, and major fabrication are completed. Construction is currently at 76.4% completion. Project being relooked for repurposing under guidance of CEO, Zinc Business.

Exploration

0.3% increase in resources from 27.20 million tonnes to 27.29 million tonnes metal and 4.4% reduction in reserve metal tonnes from 7.9 million tonnes to 7.6 million tonnes.

Total R&R for VZI decreased from 671 million tonnes to 659 million tonnes of ore, while metal decreased from 35.1 million tonnes to 34.87 million tonnes (0.7% decrease in total metal)

Reduction in reserves largely attributable mining depletions and the slight increase in resources due to addition of metal tonnes at Kloof which was offset by an increase in transport/operating costs and increased dilution which impacted the cut-offs used.

Occupational Health & Safety

There was one lost time injuries (LTIs) in FY 2023. Frequency rate stood at 0.03 per million-man hours (FY 2022: 0.20 per million-man hours).

Our focus remains on strengthening our safety philosophy and management systems.

Cairn Oil & Gas has taken various initiatives:

Environment

Our Oil & Gas business is committed to protect the environment, minimise resource consumption and drive towards our goal of ‘zero harm, zero waste, zero discharge’. Highlights for FY 2023 are as:

• Cairn Oil & Gas declared as Water Positive Company with NPWI (Net water positive impact) index of 1.12. Four of our sites RJ Oil, RJ Gas, Midstream and Ravva) are also individually declared as water positive assets.

Biodiversity/wildlife conservation initiatives

Reduction in GHG emission:

All Operating assets of Cairn (RJ Oil, RJ Gas, Midstream operations, Ravva, and Suvali) have been certified as “Single Use Plastic free” premises.

Production performance

Operations

Average gross operated production across our assets was 11% lower YoY at 1,42,615 boepd. The Company's production from the Rajasthan block was 1,19,888 boepd, 13% lower YoY and from the offshore assets, was at 22,579 boepd, 2% lower YoY, owing to natural field decline. The decline has been partially offset by infill wells brough online across all assets.

Production details by block are summarised below:

Rajasthan block

Gross production from the Rajasthan block averaged 1,19,888 boepd, 13% lower YoY. The natural decline in the MBA fields has been partially offset by infill wells brought online in Mangala, Bhagyam, ABH and RDG fields.

Gas production from Raageshwari Deep Gas (RDG) averaged 142 million standard cubic feet per day (mmscfd) in FY 2023, with gas sales, post captive consumption, at 118 mmscfd.

On 26 October 2018, the Government of India, acting through the Directorate General of Hydrocarbons (DGH), Ministry of Petroleum and Natural Gas, granted its approval for a ten-year extension of the PSC for the Rajasthan block, RJ-ON-90/1, subject to certain conditions, with effect from 15 May 2020. The Division Bench of the Delhi High Court in March 2021 set aside the single judge order of May 2018 which allowed extension of PSC on same terms and conditions. We have filed a Special Leave Petition (SLP) in Supreme Court against this Delhi High court judgement.

We have served notice of Arbitration on the GoI in respect of the audit demand raised by DGH based on PSC provisions. The final hearing and arguments were concluded in September 2022. Post hearing briefs have been filed by the parties on 11 November 2022. It is our position that there is no liability arising under the PSC owing to these purported audited exceptions. The audit exceptions do not constitute demand and hence shall beresolved as per the PSC provisions.

Pursuant to GoI's approval for extension vide letter dated 26 October 2018, the parties have now executed the addendum for PSC extension for 10 years from 15 May 2020 to 14 May 2030 on 27 October 2022.

Ravva block

The Ravva block produced at an average rate of 11,802 boepd, lower by 17% YoY, owing to natural field decline.

Cambay block

The Cambay block produced at an average rate of 10,777 boepd, higher by 21% YoY, supported by gains from the infill well drilling campaign.

Prices

Crude oil price averaged US$96.2 per barrel in FY 2023, compared to US$81.15 per barrel in FY 2022. The continuous upward movement is mostly driven by supply constraints following Russia’s invasion of Ukraine.

Early in the year, prices rose amid tight supply after a build in U.S. crude and gasoline stocks, limited spare capacity of OPEC and downfall in supply from Caspian Pipeline Consortium. Demand outlook remains clouded by increasing worries about an economic slump in the United States and Europe, debt distress in emerging market economies.

Further, faltering economic backdrop and weakening outlook for consumption caused a volatility in the oil prices. Interest rate hike by central banks around the world weighted on demand outlook and series of rate hikes by US Fed caused dollar to spiral to two decades high to make oil more expensive to the buyers holding currency other than dollar. COVID-19 restrictions in China and US administration releasing oil inventories from strategic reserve further eased the prices.

However, in March, financial markets witnessed uncertainty, triggered by the turmoil in the US and European banking sector. Concerns about potential financial contagion effects and the risk that banking sector turmoil will extend to the economy pushed crude oil prices sharply down to 15-month lows at US$75/bbl.

In April, decision by OPEC and allies to slash May production by 5,00,000 bopd in a bid to arrest the slump in prices provided floor to the prices.

Financial performance

Revenue for FY 2023 was 21% higher YoY at ₹15,038 crore (after profit petroleum and royalty sharing with the Government of India), as a result of the increase in oil prices, favourable exchange rate movements partially offset by lower sales volume. EBITDA for FY 2023 was at ₹7,781 crore, higher by 30% YoY as a result of higher brent prices, favourable exchange rate movement, increase in capex recovery partially offset by lower volumes and increased cost.

The Rajasthan operating cost was US$14.2 per barrel in FY 2023 compared to US$10.1 per barrel in FY 2022, primarily driven by increase in polymer commodity index, owing to oil price rally and increased well interventions to manage natural field decline.

A. Growth Projects Development

The Oil & Gas business has a robust portfolio of infill development & enhanced oil recovery projects to add volumes in the near term and manage natural field decline. Some of key projects are:

Infill Projects

Bhagyam

To accelerate production and augment reserves from Bhagyam field, infill drilling opportunities in FB1 and FB3 layers were identified. The project entails drilling of 11 infill producers and injector wells in FB3 layers and three horizontal wells in the bio-degraded zone.

As of 31 March 2023, 12 wells have been drilled, of which 7 wells are online.

Aishwarya

Based on the success of the polymer injection in Lower Fatehgarh (LF) sands of Aishwariya field, additional production opportunities were identified in Upper Fatehgarh (UF) sands. The project entails drilling of 25 infill wells in Upper Fatehgarh (UF) sands and conversion of 7 existing wells to UF polymer injectors.

As of 31 March 2023, 18 wells have been drilled, of which 8 wells are online.

Tight Oil (ABH)

Aishwariya Barmer hill infill drilling program established confidence in reservoir understanding of ABH. Based on its success, drilling of 14 additional wells were conceptualised.

Early acceleration of three wells has been completed during the fiscal year 2023. Drilling is to re-commence from first quarter of fiscal year 2024.

Tight Gas (RDG)

In order to realise the full potential of the gas reservoir,an infill drilling campaign of 27 wells has commenced during fiscal year 2022. As of 31 March 2023, 24 wells have been drilled of which 17 wells are online.

Satellite Fields

In order to monetise the satellite fields, 14 wells development campaign for 3 satellite fields (GSV, Tukaram, Raag Oil) was conceptualised. Drilling has been completed during fiscal year 2023 and they are being progressively hooked up to ramp up volumes.

Cambay (Offshore)

Infill program in Cambay over the last few years has resulted in incremental recovery. New opportunities had been identified basis integration of advanced seismic characterisation, well and production data. Project has been completed during the second quarter of fiscal year 2023 and two wells are online.

Ravva (Offshore)

To augment reserve base and manage natural decline, infill opportunities were identified in Ravva asset. The project entails drilling of four exploration wells and 1 development well.

Project has been completed during the fourth quarter of fiscal year 2023 and success has been notified in two exploration wells and 1 development well which are online and producing. No hydrocarbons were observed in two wells and have been declared dry.

Discovered Small Field (DSF)

Hazarigaon: Well intervention and testing activities was carried out in Hazarigaon-1 well and monetisation is underway. Production commenced from third quarter of fiscal year 2023.

B. Exploration and Appraisal

Rajasthan - (BLOCK RJ-ON-90/1)

Rajasthan Exploration

The Rajasthan portfolio provide access to multiple play types with oil in high permeability reservoirs, tight oil and tight gas. We have completed drilling of 2 exploration wells and to unlock the potential of unconventional resources, we completed drilling of the first shale exploration well in Rajasthan during the fiscal year 2023. We are also evaluating further opportunities to drill low to medium risk and medium to high reward exploration wells to build on the resource portfolio.

Open Acreage Licensing Policy (OALP)

Under the Open Acreage Licensing Policy (OALP), revenue-sharing contracts have been signed for 51 blocks located primarily in established basins, including some optimally close to existing infrastructure, of which 5 onshore blocks in the KG region have been relinquished.

Production commenced from Jaya discovery in Cambay region in third quarter of fiscal year 2023. This is the first of its kind production facility wherein sales through CNG cascade system are being done by an E&P operator from an exploration well site.

Drilling preparations are ongoing in the Offshore West-Coast to drill a moderate risk-high reward prospect (risked resource potential of 42 mmboe) within the Kutch-Saurashtra basin during the first quarter of fiscal year 2024. We intend to continue the exploration across Rajasthan, Cambay, and North-east in FY 2024 to unlock the full potential of the OALP blocks.

Occupational health & safety

We report with deep regret, one fatality of business partner employee during the year at Jharsuguda site. We have thoroughly investigated all the incidents and the lessons learned were shared across all our businesses to prevent such incidents in future.

This year, we experienced total 33 Lost Time Injuries (LTIs) resulting in LTIFR of 0.41 at our operations. Further, we have developed the V-SAFE portal for timely identification and reporting of safety hazard and rectification of the same.

Towards the goal of Zero Harm in Safety, the Lanjigarh Unit undertook numerous safety measures to improve workplace condition in terms of site infrastructure, safety system & safety culture. Noteworthy infrastructural improvements include safer access pathways for pedestrians and heavy vehicles across the site. Safety systems incorporated to improve safety are introduction of Driver Management Centre, monitoring of vehicles & safe driving parameters through smart cameras, speed detectors and Vehicle Tracking System. BALCO has onboarded the journey of “Vihan” - Critical Risk Management (CRM) and launched with five critical risks control this year.

The site has also implemented digitisation project v-Unified (ENABLON) to manage safety through technological tools.

The Site is committed to ‘Refuse Work if it is Unsafe to Execute’ and empowered all site personnel to reject any activity that posed a possible safety concern.

Environment

During the year, Jharsuguda has recycled 13.09% of the water used, while BALCO has recycled 10.76%. Our specific water consumption at VLJ metal was 0.20 m³/t, BALCO metal was 0.61 m³/t and alumina refinery was 2.04 m³/t.

At Lanjigarh, biomass was co-fired in the boiler for the first time, with all defined safety measures to reduce GHG emissions (by 388 tCO₂e) of the power plant. At BALCO, biomass was co-fired in the boiler for the first time (Qty: 5 kt), with all defined safety measures to reduce GHG emissions (by 6,900 tCO₂e) of the power plant. Also started using biodiesel for the first time in technological vehicles and Ladle cleaning shop. This is in line with the Vedanta de-carbonisation and carbon neutrality plan.

EV vehicles will be used in operations as part of the green drive. Under this initiative, the Jharsuguda unit has deployed Electric 27 forklifts in place of diesel-propelled forklifts. We have planned to shift to 100% EV LMV by FY 2030. This will help us eliminate our in-plant scope 3 GHG emission from LMV operations at the Jharsuguda business. BALCO has planned to shift 2 EV LMVs in current year for the reduction of scope-3 emission at BALCO business.

This year, we produced 58 kt of Green Aluminium (YTD) under the brand name (Restora) with a potential to produce 100 KTPA. This is a strong step towards our commitment to achieve GHG emission intensity reduction of 30% by 2030 and Net zero carbon by 2050.

Restora Ultra is an ultra-low carbon aluminium brand in collaboration with Runaya Refining. Near zero carbon footprint – one of the lowest in the world. Testament to our focus on ‘zero waste’ through operational efficiencies and recovery from dross.

In the current fiscal year, we have reduced our GHG emission intensity by 8.3% compared to the FY 2021 baseline. We have purchased 1,323 MU of Green Power March 2023 YTD and co-fired 5,141 tonnes of Biomass. Further, the Floating Solar Project is expected to be completed by Q3 FY 2024, thus strengthening our green power commitment.

Management of hazardous waste such as spent Pot line, aluminium dross, and high volume low toxic waste such as fly ash, red mud etc. are material waste management issues for the aluminium business. During the year, our operations have utilised 106.74% of Ash and 99.34% Dross.

Vedanta Aluminium has entered into a long-term partnership with Dalmia Cements for gainful utilisation of industrial by-products such as fly-ash and Spent Pot Lining (SPL) waste to manufacture ‘green’ cement. The partnership will enable Vedanta Aluminium’s plant at Jharsuguda to transport around 20 rakes of fly ash per month for 5 years to Dalmia Cement plants at Odisha, Chhattisgarh, Meghalaya, and Assam, and transport Spent Pot Lining (SPL) waste for 3 years to Dalmia Cement at Rajgangpur, Odisha. Jharsuguda operations has implemented Integrated Waste Management System by NEPRA for sustainable management of non-hazardous waste like plastic, paper, food, horticulture waste and others. This will enable us to move towards ‘Zero Waste to Landfill’ and will help us generate wealth out of waste. Till date, total 121 rakes had been despatched which is the highest ever ash despatch for Jharsuguda unit.

BALCO is associated with Cement industries in the vicinity through road mode and striving to achieve economies of scale and enterprise solution which is environmentally friendly and cost effective. For the very purpose, BALCO has ventured into supplying the conditioned Fly Ash through Rake. This meaningful, sustainable increase in fly ash utilisation at locational, distant thermal power plant is mutual win for both Cement companies and BALCO. BALCO is also engaged in Mine back filling of Manikpur Mines which will further support the effort to utilise Fly Ash.

Our Lanjigarh operation has placed an order for manufacturing of red mud bricks. It is in the direction of waste-to-wealth initiative. On similar lines, JSG unit is working with Runaya refining for extracting valuable metals from Dross as part of waste-to-wealth initiatives.

The organisation is working proactively towards the vision of Zero Waste.

Production performance

Alumina refinery: Lanjigarh

At Lanjigarh, calcined alumina production stands at 1.79 million tonnes, primarily due to the calciners shutdown for overhauling.

Aluminium smelters

We ended the year with record production of 2.29 million tonnes.

Coal Security

We continue to focus on the long-term security of our coal supply at competitive prices. We added Jamkhani (2.6 MTPA), Radhikapur (West) (6 MTPA), Kuraloi (A) North (8 MTPA), Barra coal blocks and have been declared Successful Bidder for Ghogharpalli Coal Block through competitive bidding process by GoI. We have operationalised Jamkhani Coal block in FY 2023 & intend to operationalise Kurloi (A) North and Radhikapur (West) in the next fiscal year. These acquisitions, along with 15 million tonnes of long-term linkage will ensure 100% coal security for Aluminium Business. We also look forward to continuing our participation in linkage coal auctions and secure coal at competitive rates.

Prices

Average LME prices for aluminium in FY 2023 stood at US$2,481 per tonne, 11% lower YoY. Aluminium LME has been steadily declining this year, owing to a recessionary market outlook coupled with the zero Covid policy of China. However, with the opening of the Chinese economy coupled with the decrease in the inflationary pressure, the LME prices is expected to rebound. Further, the aluminium market is in a growth phase now with demand expected to be driven by sunrise sectors such as Electric Vehicle, Renewable Energy, Defence and Aerospace.

Unit costs

During FY 2023, the cost of production (CoP) of alumina increased to US$364 per tonne due to lower production and headwinds in the input commodity prices.

In FY 2023, the total bauxite requirement of about 5.5 million tonnes were met through domestic as well as import sources.

In FY 2023, the COP of cast metal at Jharsuguda was US$2,291 per tonne, an increase by 25% from US$1,839 per tonne in FY 2022. The cast metal COP at BALCO stood at US$2,424 per tonne, increased by 27% from US$1,913 per tonne in FY 2022. This was primarily driven by theheadwinds in input commodity prices.

Financial performance

During the year, revenue increased by 3% to ₹52,403 crore, driven by improved operational performance, strategic hedging gains, favourable exchange rate movement partially offset by reduced LME. EBITDA was down at ₹5,837 crore (FY 2022: ₹17,337 crore), mainly due to fall in LME, input commodity inflation partially offset by favourable exchange rate movements.

ESL HSE/ESG Performance

Occupational Health & Safety

We, at ESL, believe that all accidents are preventable and to realise our vision of Zero Harm, we have carried out the following key initiatives for nurturing ZERO HARM culture across organisation.

• Launched Project VIHAAN – Critical Risk Management to verify critical risks Go and NoGo implementation periodically for various critical controls viz.
• Digital Initiatives – Launched Cardinal Safety Rule Portal, Kiosk-based safety induction for drivers and QR-based fire equipment maintenance and tracking
• Capability Building – Engaged DuPont to train and develop trainers for implementing various safety standards (160+ developed through TTT)
• Occupational Health – Engaged M/s Apollo for managing OHC & Air Ambulance services, initiated medical consultation facility for employees and their families at Bokaro City and developed 500+ trained first aiders
• Infrastructure – Conveyor guarding, drain covering, fire hydrant line revamping, settling pits, tarpaulin covering/uncovering platforms and man machine segregation across the plant roads

Environment

Waste and Circular Economy

We have achieved 100% utilisation of BF granulated slag and fly ash by re-using in cement plants & local brick manufacturers. Other types of waste viz., bottom ash, LD slag & core mould sand, we have achieved 98% of its utilisation by internal road making & mines back filling. Hazardous wastes are being sent to PCB authorised recyclers/re-processors.

Climate Change

• Reduction in False Air/Air leakages in Sinter Plant, Sinter Plant bed depth control, Fuel crushing index improvement has resulted in estimated decrease of tonnes of CO₂e by 35,000 tonnes of CO₂2e
• LD gas recovery project has been undertaken by repairing and revamping the Gas Holder facility, which has led to an estimated decrease of 18,480 tonnes of CO₂e

Biodiversity/Plantation

• ESL has achieved 34.54% green belt development
• Around 25,000 saplings have been planted inside KML to drive greenbelt development project
• 10,000 fruit-bearing saplings have been distributed among 9 panchayats to drive greenbelt development in surrounding areas of ESL
• Miyawaki afforestation of 2.5 acre has been commenced in Q4 with the target of about 55,000 saplings

Water Management

• 2 nos. of rainwater settling pits along with pumps have been installed to contain the flow from the stormwater drains across the plant. This has resulted in increase in ETP water intake and optimised the usage of stormwater by 350-400 KLD
• 250 KLD sewage treatement plant has been commissioned during Q4 which would reduce fresh water offtake by 250 KL/day. This would ensure saving of fresh water by 90,000 KL/annum
• Green Belt Development – Planted more than 35,000 samplings including 10,000 fruit-bearing saplings, achieved 33% greenbelt requirement this year
• ESG – 60 projects have been identified out of which 10 have been completed and 34 have achieved IL 4 stage
• Sp. Water – We have reduced our fresh water offtake from the reservoir by 1.7 million m³ through the following water stewardship programme. This has resulted in achieving specific water consumption of 2.88 m³ /tcs from 3.00 m³/tcs
• Arresting water leakages and replacing firefighting pipelines
• Increasing recycle percentage through installation of ZLD pump from 12% to 24%
• Increasing cooling tower COC from 6 to 7
• Cleaning of backwash pipeline
• Sp. Energy & GHG Emissions - Against the target of 7.97 Gcal/tcs, we have achieved 7.72 Gcal/tcs (YTD), several initiatives were taken such as:
• Optimisation of compressor, blower speed, CT fans, AC & Light operation, power consumption of other circuit hot water circulating pumps by installing VFD with feedback system
• Reduction in False Air/Air leakages in Sinter Plant, Sinter Plant bed depth control, Fuel crushing index improvement has resulted in estimated decrease of tonnes of CO₂e by 35,000 tonnes of CO₂e
• Blast furnace dedusting damper auto control
• Improving fuel rate by 20 kg/tcs for BF3 and 7 kg/tcs for BF2 resulting in reduction of 64,846.6 tonnes of CO₂e

Production performance

Operations

During FY 2023, we have achieved highest ever hot metal production of 1.37 million tonnes, up 1% YoY and highest ever saleable production of 1.29 million tonnes, up 2% YoY on account of increased availability of hot metal due to debottlenecking of blast furnace and operational efficiencies.

The priority remains to enhance production of value-added products (VAPs), i.e., TMT Bar, Wire Rod and DI Pipe. ESL achieved 83% VAP sales, 5% improvement in FY 2023, in line with priority.

There have been significant gains in Sales & NSR front. However, operational inefficiencies, higher raw material prices of coking coal & other market factors resulted in higher cost of sales. We are trying to stable our raw material prices. We have acquired two iron ore mines to achieve raw material long-term security & pricing stability.

Our Consent to Operate (CTO) for the steel plant at Bokaro, which was valid until December 2017, was not renewed by the Jharkhand State Pollution Control Board (JSPCB). This was followed by the Ministry of Environment, Forests and Climate Change (MoEF&CC) revoking the Environmental Clearance (EC) dated 21 February 2018. MoEF&CC, on 25 August 2020, has granted a Terms of Reference to ESL for 3 MTPA plant with conditions like fresh EIA/EMP reports and public hearing. The Honorable High Court of Jharkhand had extended the interim protection granted in the pending writ petitions till 16 September 2020. Hon’ble High Court on 16 September 2020, pronounced and revoked the interim stay for plant continuity w.e.f 23 September 2020. ESL filed a SLP before Hon’ble Supreme Court against 16 September 2020, order for grant of interim status quo order and plant continuity. Vide order dated 22 September 2020, Hon’ble Supreme Court issued notice and allowed plant operations to continue till further orders. In furtherance of the Supreme Court orders for plant continuity, MoEF vide its letter dated 2 February 2022 has deferred the grant of Environment Clearance till Forest Clearance Stage-II is granted to ESL. ESL has submitted its reply against MoEF letter vide letter dated 11 February 2022 for reconsidering the decision and not linking EC with FC since as per the applicable law and available precedents, grant of FC Stage-II is not a condition precedent for grant of EC. CTO will be procured post furnishing the EC. The grant of FC was kept at abeyance for want of Forest Clearance. FC Stage-I is granted to ESL, while the FC compliance are under process.

Prices

Average sales realisation increased 4% YoY from US$659 per tonne in FY 2022 to US$689 per tonne in FY 2023. Prices of iron and steel are influenced by several macro-economic factors. These include global economic slowdown, US-China trade war, Russia-Ukraine war, duties on iron and steel products, supply chain destocking, government expenditure on infrastructure, the emphasis on developmental projects, demand-supply dynamics, the Purchasing Managers’ Index (PMI) in India and production and inventory levels across the globe especially China. Even though the NSR increased by US$29 per tonne, we were unable to increase our EBITDA margin & landed to US$32 per tonne for the year (against US$74 per tonne in FY 2022) due to increased raw material prices of coking coal, which continued to remain high in in Q2 and Q3, when the market prices for steel products declined sharply.

Unit costs

Cost has increased by 12% YoY from US$585 per tonne to US$656 per tonne in FY 2023, primarily on account of increase in coking coal prices during the year, uncontrollable factors and operational inefficiencies.

Financial performance

Revenue increased by 21% to ₹7,852 crore (FY 2022: ₹6,474 crore), primarily due to higher volume and NSR. EBITDA decreased by 55% to ₹316 crore mainly due to increased cost partially offset by increased sales realisation.

Occupational Health & Safety

The lost time injury frequency rate (LTIFR) was 2.77 in FY 2023 (FY 2022: 0). Dupont Process Safety Management (PSM) Tool was launched for addressing the core elements of safety driven by sub committees under each PSM element. Received 4 Star Safety Rating from British Safety Council.

We conducted safety stand-downs to communicate the learnings from safety incidents and prevent future incidents. Our safety leadership regularly engages with the business partner site in-charges and their safety officers for their capability development and strengthening the culture of safety at our sites.

Environment

Aligned with the Vedanta’s vision to reach net zero emissions by 2050, Sterlite Copper has entered into a renewable energy sourcing agreement to produce Green Copper using 100% renewable energy & implemented AI & ML based Smart fuel optimisation for combined targeted GHG Emission reduction by 68,000 tCO₂

Copper Mines of Tasmania continued in care and maintenance awaiting a decision on restart. Meanwhile, a small, dedicated team is maintaining the site and there were no significant safety or environmental incidents during the year. The site retained its ISO accreditation in safety, environment and quality management systems and the opportunity of a lull in production was used to review and further improve these systems.

Production performance

Operations

Copper production operations in Silvassa increased by 18% to 148 kt and have also seen growth of 20% in terms of sales volume and realised highest sales after closure of the Tuticorin unit and improved operational efficiencies, debottlenecking & capability building initiatives carried across the plant, the year also marked remarkable growth in free cash flow.

The Tamil Nadu Pollution Control Board (TNPCB) vide order, dated 9 April 2018, rejected the consent renewal application of Vedanta Limited for its copper smelter plant at Tuticorin. It directed Vedanta not to resume production operations without formal approval/consent (vide order dated 12 April 2018) and directed the closure of the plant and the disconnection of electricity (vide order dated 23 May 2018).

The Government of Tamil Nadu also issued an order dated 28 May 2018 directing the TNPCB to permanently close and seal the existing copper smelter at Tuticorin; this was followed by the TNPCB on 28 May 2018. Vedanta Limited filed a composite appeal before the National Green Tribunal (NGT) against all the above orders passed by the TNPCB and the Government of Tamil Nadu. In December 2018, NGT set aside the impugned orders and directed the TNPCB to renew the CTO. The order passed by the NGT was challenged by Tamil Nadu State Govt. in the Hon’ble Supreme Court.

The Company had filed a Writ Petition before the Madras High Court challenging the various orders passed against the Company in 2018 and 2013. On 18 August 2020, the Madras High Court delivered the judgement wherein it dismissed all the Writ Petitions filed by the Company. The Company has approached the Supreme Court and challenged the said High Court order by way of a Special Leave Petition (SLP) to Appeal and also filed an interim relief for care & maintenance as well as trial operation of the plant. The matter was then listed on 2 December 2020, before the Supreme Court. The Bench after having heard both the sides on the interim relief of trial operation of the Plant, concluded that at this stage the interim relief could not be allowed. Further, the matter was listed as item no. 22 on 10 April 2023 and was taken up and heard by the Supreme Court. The Bench allowed the activities as permitted in the letter of the Additional Chief Secretary to the district collector, namely:

I. Gypsum evacuation
II. Operation of Secured Landfill (SLF) leachate sump pump
III. Bund rectification of SLF - 4
IV. Green-belt maintenance

Our copper mine in Australia has remained under extended care and maintenance since 2013. However, we continue to evaluate various options for its profitable restart, given the Government’s current favourable support and prices.

Prices

Average LME copper prices reduced by 12% compared with FY 2022 predominantly due to low demand in China owing to COVID restrictions.

Financial performance

During the year, revenue was ₹17,491 crore, an increase of 15% on the previous year’s revenue of ₹15,151 crore. The increase in revenue was mainly due to higher volume, favourable exchange rate partially offset by lower Copper LME prices. EBITDA improvement ₹111 crore mainly on account of improved operational efficiencies, higher volumes and increase in Sales Margin largely offset by a onetime charge against duty entitlement scripts of ₹64 crore.

Risk Management Know More

Vedanta has a well-defined risk management framework involving identification, evaluation, mitigation and monitoring of all risks to meet its objectives. This is enabled by a robust process that ensures all risks are identified at individual business level and across ongoing projects. The entire mechanism is led by structured risk management system and governance framework to ensure monitoring at multiple levels, and thus ensure operating controls are aligned to vision, mission and strategy. All the respective businesses of Vedanta undertake to review on a quarterly basis the risks relevant to it, the risk trend, control measures and actionable. Each business also develops its risk matrix and risk register, basis which the Group's principal risks are identified, and response mechanism formulated. Vedanta’s risks are broadly classified under sustainability risks, operational risks, compliance risks and financial risks.

Human Resources Know More

People are a key resource at Vedanta, and the Company strives to give them an enabling and fulfilling workplace. This is achieved through sustained actions around improving health and safety, driving diversity, equity and inclusion, and facilitating them equal learning and development opportunities. Transforming workplace is an important pillar in Vedanta’s ESG strategy, and the Company is undertaking definitive actions to achieve the various goals set under it.

Vedanta maintains a strong focus on attracting and retaining the best employees, which now includes finest minds from over 30 countries. The Company has a robust mechanism to hire talent from campuses and groom them. It also has multiple programs to build leadership, including ‘ACT-UP’ to identify and nurture talent and ‘Emerging Leaders Programme’ to identify and elevate individuals to CXO roles. During FY 2023, more than 500 employees were elevated through various programs. Vedanta is further using digital technologies to enhance learning experiences through initiatives like ‘Gurukul’ for knowledge-sharing and ‘Knolskape’ for simulation-based learning.

The Company has been actively promoting diversity and inclusivity with focus on improving representation of women, LGBTQ+ and other underprivileged or underrepresented communities. Programs like ‘V Lead’ and ‘V Engage’ are enabling this. The Company has also adopted a globally benchmarked methodology for rewarding and motivating its people and business partners, for long-term success. To notch-up safety, the Company launched HSE digital – incident management module in FY 2023 and also initiated roll-out of a critical risk management (CRM) module.

The Company’s robust people practices have resulted in several prestigious awards including Great Place to Work and Kincentric Best Employer 2022. As of 31 March 2023, the Company had 87,500+ in total workforce, with women representation increasing to 14% from 11% previous year.

Information Technology Know More

Technology implementation centred around digitalisation, automation, data analytics and Industry 4.0 technologies are major enablers of growth and future-readiness at Vedanta. The Company has made several investments towards this to enhance operational productivity, safety and sustainability. 100% of the Company’s workforce at digitally literate. Vedanta is currently implementing its digital transformation phase-2 project, aimed at becoming smarter and data-driven. Towards this, investments are being made in advanced technologies like advanced process control, digital twin, predictive analysis and asset performance monitoring among others. They are set to make the operations more reliable and efficient, with the use of data to analyse performance and take necessary actions.