Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

In addition, we are expanding our aluminum business through Vedanta Aluminium. We hold a 29.5% minority interest in Vedanta
Aluminium, a 70.5%-owned subsidiary of Vedanta. Vedanta Aluminium is intended to be a fully integrated alumina and aluminum producer
with a 1.0 million tpa, expandable to 1.4 million tpa subject to governmental approvals, alumina refinery at Lanjigarh in the State of Orissa in
Eastern India, with an associated 75 MW captive power plant, expandable to 90 MW. In March 2007, Vedanta Aluminium began the
progressive commissioning of the 1.0 million tpa greenfield alumina refinery. The Lanjigarh alumina refinery started production from a single
stream operation and produced 585,597 tons of alumina in fiscal 2009. The second production stream of the Lanjigarh alumina refinery was
commissioned in April 2009. Further, Vedanta Aluminium is expanding its alumina refining capacity at the Lanjigarh refinery from 1.4 million
tpa to 2.0 million tpa through debottlenecking, which is expected to be completed by March 2010, and from 2.0 million tpa to 5.0 million tpa
by constructing a second 3.0 million tpa refinery with an associated 210 MW coal-based captive power plant, which are expected to be
commissioned by mid-2011. Vedanta Aluminium is in the process of obtaining all governmental approvals for these expansion projects. In
addition, Vedanta Aluminium is building a greenfield 500,000 tpa aluminum smelter, together with an associated 1,215 MW coal-based captive
power plant, in Jharsuguda in the State of Orissa. The project will be implemented in two phases of 250,000 tpa each. Commissioning of the
first phase commenced in May 2008, six months ahead of schedule, and was fully commissioned in May 2009. The second phase is expected to
be progressively commissioned from June 2009 through the end of fiscal 2010, subject to governmental approvals. The commissioning of the
captive power plant units is scheduled to meet the power requirements of the new Jharsuguda smelter and all other power requirements of the
facility. Vedanta Aluminium is also setting up another 1,250,000 tpa aluminum smelter in Jharsuguda which is expected to be progressively
commissioned from March 2010 and to be completed by September 2012.
We have been building and managing captive power plants since 1997. As of May 31, 2009, the total power generating capacity of our
captive power plants and wind power plants was 2,078.7 MW, including six thermal coal-based captive power plants with a total power
generation capacity of 1,604 MW that we built within the last five years. In August 2006, our shareholders approved a new strategy for us to
enter into the commercial power generation business in India. Our wholly-owned subsidiary Sterlite Energy is investing approximately
Rs. 82,000 million ($1,612.0 million) to build a 2,400 MW thermal coal-based power facility (comprising four units of 600 MW each) in
Jharsuguda in the State of Orissa. The project is expected to be progressively commissioned starting in the third quarter of fiscal 2010, with full
completion anticipated by the second quarter of fiscal 2011. Sterlite Energy is building this power facility in the State of Orissa, which has
abundant coal resources estimated at 65.3 billion tons as of April 1, 2008, according to the Geological Survey of India 2008. In addition, in
July 2008, Sterlite Energy was awarded the tender for a project to build a 1,980 MW thermal coal-based commercial power plant at Talwandi
Sabo, in the State of Punjab, India, by the Government of Punjab. The project is expected to be completed in April 2013.
Competitive Strengths
We believe that we have the following competitive strengths:
High quality assets and resources making us a low-cost producer
We believe that our business has assets of global size and scale. Our costs of production in our Indian copper, zinc and aluminum businesses
are competitive with those of leading metals and mining companies in the world, which we believe is enabled by our high quality assets,
operational skills and experience and the integrated nature of our operations. Specifically:
• Our Tuticorin smelter was one of the top fifteen custom copper smelters worldwide in 2008, and one of the largest in India by
production volume in fiscal 2008, according to Brook Hunt.
• Our zinc business’ operations are fully integrated with its own mining and captive power generation capacities. HZL was the world’s
third largest zinc mining company in 2008 based on zinc mine production and is also one of the top ten lead mining companies by
production volume worldwide, according to Brook Hunt. In 2008, HZL’s Rampura Agucha mine was the largest lead-zinc mine in the
world in terms of contained zinc deposits on a production basis and the fourth largest on a reserve basis, according to Brook Hunt.
HZL was in the lowest cost quartile in terms of costs of production of all zinc mining operations worldwide in 2008, the fourth largest
producer of zinc worldwide and the largest integrated producer of zinc worldwide based on production volumes in 2008, and HZL’s
Chanderiya hydrometallurgical zinc smelter was the third largest smelter on a production basis worldwide in 2008, according to Brook
Hunt.
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