By Barbara Lewis
LONDON (Reuters) - Vedanta Resources (L:VED) is studying how to produce cobalt for use in batteries as the diversified miner becomes the latest company to seek exposure to an anticipated electric vehicle boom.
Tom Albanese, who steps down as CEO of Vedanta at the end of August, said the excitement around electric vehicles had prompted the company to looking at producing cobalt suitable for batteries from its Zambian copper mines, rather than just treating it as a copper by-product.
Vedanta is also betting on continued use of conventional fuel and in April completed the merger of its Indian metals and mining group Vedanta Limited (NS:VDAN) with oil and gas company Cairn India Ltd (NS:CAIL).
"As cobalt is becoming more exciting, we are looking to determine the right engineering solution to produce cobalt (for batteries) rather than a copper-cobalt alloy," Albanese said in an interview with Reuters late on Monday.
He did not give details on when a study on the issue would be completed.
Vedanta said in a conference call following its interim results last month that it produces around 1,000 tonnes of cobalt-copper alloy per year and in addition aims to produce 3,000 to 4,000 tonnes of pure cobalt per year "going forward".
Glencore (L:GLEN) is the world's dominant cobalt miner. Its operations in Democratic Republic of Congo produced 12,700 tonnes in the first half of this year and analysts say its portfolio positions it well for any increase in demand for the materials needed by electric vehicles.
Vedanta says it is also well placed, with zinc mines in India, South Africa and Namibia and in India and it also produces aluminum - meaning it produces two other materials potentially in increasing demand for light, low carbon transport.
Investors are cautious about Vedanta, whose share price has fallen around 20 percent this year, while Glencore's has risen by almost 20 percent outpacing many of its peers, in part because of its narrative on electric vehicles, analysts say.
Vedanta' challenges include ongoing legal action in connection with pollution in Zambia, where it has faced repeated demonstrations by local villagers over the issue.
Executive Chairman Anil Agarwal told Vedanta's annual general meeting in London on Monday that safety and sustainability were "a personal priority" for him.
He also said Albanese's successor would be announced "in due course".
Albanese, who was CEO of Rio Tinto (L:RIO) until he stepped down following massive asset writedowns, became CEO of Vedanta in 2014. He said he is resigning to return to the United States to live with his family.