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

We utilize project monitoring and assurance systems to facilitate timely execution of our projects, a number of which have been completed
ahead of time and on budget. In addition, we have established relationships with leading domestic and international vendors that support our
expansion projects. We have successfully completed expansion projects across our copper, zinc and aluminum businesses on which we have
spent Rs. 280,302 million ($5,510.2 million) since fiscal 2003, including:
• increasing the lead metal capacity of HZL’s lead-zinc smelter at Chanderiya from 35,000 tpa to 85,000 tpa in February 2006;
• increasing the copper anode capacity of our Tuticorin copper smelter from 180,000 tpa to 300,000 tpa in 2005 and then to 400,000 tpa
in November 2006;
• increasing the Korba facility by adding a new 245,000 tpa aluminum smelter to bring the total installed capacity to 345,000 tpa of
aluminum in November 2006;
• completing a brownfield expansion with the addition of HZL’s two hydrometallurgical zinc smelters with a capacity of 170,000 tpa
each, together with coal-based captive power plants of 154 MW and 80 MW at Chanderiya in May 2005 and December 2007,
respectively. The capacities of the zinc smelters were further increased to 210,000 tpa through improvements to the operational
efficiencies of both smelters in April 2008;
• increasing the capacity of the Rampura Agucha lead-zinc mine and processing plant from 2.0 million tpa to 5.0 million tpa of ore to
supply the brownfield zinc smelter expansion at Chanderiya between 2003 and 2008;
• completing our wind power plants at Gujarat and Karnataka with a total power generation capacity of 123.2 MW between 2007 and
July 2008;
• commissioning a third concentrator at Rampura Agucha in May 2008 and an 80 MW captive power plant at Zawar in December 2008
which has lowered our power generation costs, as we have replaced relatively higher cost purchases from the local SEB with our own
power generation facilities; and
• increasing the capacity of HZL’s Debari smelter from 80,000 tpa to 88,000 tpa through a project commissioned in April 2008 to
improve operational efficiencies.
Ability and capacity to finance world-class projects
We have generated strong cash flows in recent years due to our volume growth, high commodity prices and our cost reduction measures.
Moreover, we have a strong balance sheet with low leverage. We believe that holding substantial cash and current assets and maintaining low
leverage are important to provide sufficient liquidity and to meet the cash outflow requirements of our capacity expansion projects in the event
of any adverse movements in commodity prices.
Strategy
Our goal is to generate strong financial returns and create a world-class metals and mining company. Our strategy is to continue to grow our
business by completing our existing expansion projects as well as setting up new greenfield and brownfield projects. We intend to take
advantage of our low-cost base, expand our position in India as a supplier of copper, zinc and aluminum products and further develop our
exports of these products. We are also leveraging our experience in building and managing captive power plants to develop a commercial
power generation business in India and will continue to closely monitor the Indian resource markets in our existing lines of business as well as
new opportunities such as iron ore and coal. Key elements of our strategy include:
Continuing focus on asset optimization and reducing the cost of production
We are currently in the top decile in terms of cost of production in our zinc business, and we intend to continue to improve our production
processes and methods and increase operational efficiencies to further reduce our costs of production in all our businesses. Our current
initiatives include:
• seeking improvements in operations to maximize throughput and plant availability to achieve production increases at our existing
facilities with minimum capital expenditures to optimize our asset utilization;
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