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If all billionaires were like India’s mining mogul Anil Agarwal, the world would be a far better place. The 63-year-old founder and chairman of Vedanta might be worth $3bn (Forbes magazine) but as you’ll hear in this interview, he lives on a salary like everyone else at the company. His assets are in a trust whose beneficiaries are vulnerable women and children, literally millions of them.
Agarwal takes a long view on things and despite the current turbulence in South Africa, has supported his Prime Minister Narendra Modi’s call to invest there and to support SA businesses.
The result: last year’s $1bn investment through resuscitating the dormant Gamsberg zinc mine and smelter technology, and construction deals with SA companies. A great example of how multinational business can and should be done in the new South Africa. – Alec Hogg
Well, I’m here with one of the heavy hitters in Davos – the Chairman of Vedanta, Anil Agarwal. It’s nice to be with you, Mr Agarwal. Do you come to Davos often?
Yes. I’ve been coming the last couple of years and this time, it’s very exciting. I find that the world is changing, the way China has somersaulted.
The new American President is coming in and there’s a huge buzz about how he’s going to handle India because that’s tomorrow’s story. It’s nice. I’m finding that Davos is a think tank – people are thinking and brainstorming – very constructive about how the world will be tomorrow.
And India itself, looks like it’s poised for a bright future.
Yes, of course. This is another nice thing about America because it’s a place for entrepreneurs. It’s the largest democracy of the world but they need to take it forward because we have to build infrastructure (as would any other country) and we have tremendous oil & gas, copper, and zinc resources.
Against the world, which is 60- 70% explored, India has only explored 10% and the geological survey shows that India has better geology than China so it’s a very interesting time.
That’s fascinating – being in the resources world and being a FTSE-listed company (Vedanta) and also, being big enough to acquire Tom Albanese, one of the mining industry’s top CEO’s. That must have signalled your ambition.
You’ll see that we have all these big boys come and work for us. The PHB CEO has worked for us. The Anglo CEO has worked for us. As you know, we have Tom Albany and they feel very comfortable because we work with a culture. We work with a mission and the mission is to do it right. Use the technology and use today’s advancement.
That helps, along with transparency. We work for a purpose. It’s not a normal company, which only looks at money, money, money. It has to be a feeling that we’re taking people with us.
In the area you’re working in, you take those people so it’s a company that is eye-opening. We have a long-term goal, to make things right. Unless it gives millions of people a smile… I always say, “With anything you do, it must give smiles to millions of people.”
It looks like the rest of the business world is catching onto that whole idea of having a purpose – the centre of the business, as well.
Absolutely. That’s the main thing, whether you had greed or lust. Upliftment of the poor and bringing them into the mainstream… Women being exploited… How they can come in the mainstream.
This should be the purpose at this think tank because the CEO’s of the companies are very intelligent people. If they have the purpose at the back of their minds, they’ll be able to do a slightly better job and leave this world better. That’s what Davos is talking about and I can tell you from my heart, I want to do the same.
Now, you visited South Africa recently with Prime Minister Modi who seems to be very favourably disposed towards the country.
Yes, his heart is there and he’s very connected with Gandhi. He made a commitment – the largest investment of $1bn in South Africa. $400m is being invested this year in the Gamsberg mine, which everybody thought was a very difficult mine to open and a very difficult operation. We’re taking a risk.
What else can we do in life but to move forward and take a risk? We took a big jump and I must tell you that we invested that kind of money, and we expect production to come in Gamsberg next year, which will bring huge prosperity around the area.
Vice-president Cyril Ramaphosa asked me yesterday and I must tell you that whatever the perception was, the kind of support I got from the South African government is unparalleled. People say it’s a bureaucracy and there’s a delay. In our case, the government came forward and supported us – the local people – and my Prime Minister (Modi) is very pleased about it.
He also asks, “If business is not there, how can we give business prosperity to South African companies?” You won’t believe it. We have given $500m worth of contracts to South African companies, which are coming to India because we don’t have the technology for mining and South Africa has tremendous technology.
They asked, “Why don’t we have a partnership?” I got them there and they’re doing a fantastic job. It’s a two-way street. I only want that what we’ve created should be in the same vein. There shouldn’t be vested interests coming in. Let’s move this partnership on.
If there’s $1bn that you’ve earmarked, is that for this year (2017) with $400m now allocated to Gamsberg?
Yes, $400m is already going this year. We already spent about $250m. Another $150m will go this year and we’ll have spent $400m this year in South Africa. We will give $400m to $500m worth of work to the South African company in our country (India).
So, there’s a very good, strong two-way relationship. You’re also known as an oil & gas business. Have you explored those opportunities, particularly shale gas, in South Africa?
Not yet. In India, we produce 30% of the country’s oil and we will be producing 50% of the country’s oil. The government has to understand how to be mainstream in South Africa. They have to give a long rope. The can’t tighten the rope to the company all the time. They’d run away. You have to give a long rope and a lot of comfort because there is a lot of opportunity around the world for the new company to come in.
You have to be the best and you have to be aware of the bureaucracy as you did it for Gamsberg. South Africa has a good opportunity for shale gas but a lot of other countries are offering many incentives, and so it’s very important that we’re marketed well. Some of the Indian companies should come. I wish them all the best because they have the product.
I like that description ‘giving a long rope’. You met Cyril Ramaphosa, the Deputy-President. What was your sense of the impact he’s making here in Davos?
I think he was very frank. There was a huge talk, which I wasn’t part of, of black empowerment and the partnership and he was very forthright.
He said, “We don’t want all the power to be with the blacks and all the money to be divided. We have to balance it. Our country believes in governance.” He said every ‘right’ thing and I was very impressed with his leadership. He had the Finance Minister with him. He had the governor with him.
The way he was pitching for foreign investment… I would say I attend many other talks and I always thought that sometimes, the South African does not have the personality or the feeling that everybody will come to them.
This is the first time I found that they were talking in a very business-minded fashion. I think some of the local businesspeople who had many issues, were talking about it and looking to resolve it.
Now in your private life, you’re very strong on philanthropy. Here in Davos on Day 1, Oxfam released its report where it was a concerted attack on many of the people who were here – many wealthy people like yourself. How do you react when you see a report that is so critical?
Whether you put it in the report… I could tell you that by and large, every wealthy person looks at his revenue. From his heart-to-heart, he wants to give to others. Sometimes he doesn’t get the avenue. Sometimes he doesn’t get the opportunity. Sometimes he wants to do it but he has a deep pocket and a short hand.
When people take the initiative, I think people are inspired and they’ll come forward so they should be more and more vocal. Some people want to do it to make people happy. Some people want to do it to get recognition.
Some people want to eradicate poverty. I think it’s a mix of everything. The world is going in that direction. When you talk about heart-to-heart, I’m the biggest socialist. I feel like that because I always draw my salary and that salary should be enough for me to look after my family. I’m a trustee of most of my wealth. I’m a trustee by nature and I will make sure that I’m a good trustee.
I’m always looking in Africa and India. I can’t do everything. I’m not a government but whatever my heart is, it’s with the children. We have 50-million children in India under the age of 7/8. I want to be their father.
I want to make sure that they get enough food, get away from malnutrition, and get a basic education. I believe that what you educate them in and what you give them in corrective building at the age of 5/6 will remain forever. Lately, with the health check-up, the women are suffering. There are 20-million women.
They need to be independent. They need something in their hand – to be an entrepreneur. Working towards that, Modi has the idea of creating a program with a house, which has a TV and Google. Every company wants to do virtual learning for the children so I’m very excited to do that.
I love to do it. Then bring the technology because I’ve gone to America and they’re developing a lot of medicine, which does not require too much food to eat because that supplement will take care of children even if they get less food. I’d love to fund those innovations. It’s a very exciting time. I would like to do as much as possible with every moment of my life. Anything I do: unless it has a purpose, I won’t do it. I won’t do it solely for money.
I remember hearing George Soros saying once, that it was difficult to accumulate wealth but it is much more difficult to distribute it. Is it the same thing for you? Are you finding it hard to find the right mouths to feed?
It used to be like that but I’m melting with the water. I’m understanding the purpose. Everything has a purpose. Even what I do with the business: that must help a society. I will not do business if it does not help a society. Everybody talks about the sustainability. We have all these hotspots and I can tell you I’m ready.
I talk very openly to my people and say, “With health, safety, and the environment, you have to be the best.” Having the innovation… It’s like the old time when you used to do heart surgery, it would be a bloodbath. Today, you can repair a heart microscopically. It’s the same thing with Mother Earth.
Technology has come so use the technology to the maximum and make sure that we leave the environment in the best possible condition. At the same time, we need gold, oil & gas, and copper and we should take these things out in the most sustainable manner.
We have been branded differently and we have to change the society because some of the people have a vested interest. It creates unnecessary problems and the government has to take a very firm hand (especially the people who fund them) to ensure where the money is going.
Africa has lots of natural resources and to eradicate poverty, nature has given them natural resources and they should explore those natural resources because the largest employment is in natural resources. They have oil & gas but these things… My heart breaks. The project doesn’t get clearance for years. The people fear opening the project. It has to go away. They have to use the technology.
The technology is one thing, but the corruption is another. Are you finding that a barrier to entry or a barrier to investment?
I think that corruption is today’s fashion. Everybody’s talking about corruption and it’s going away. Sometimes we take too much. In some countries, governance is coming, transparency is coming, doing business through the auction, and doing business with transparency… It’s not that you’re making the deal.
I think the younger student who is taking the job and the responsibility will feel very responsible. I feel that corruption won’t continue forever. It will dilute every day, and is probably already happening.
All the politicians used to make a lot of money. Today, politicians aren’t making money. In general, that is out of fashion. It is not in the system. I believe that businesspeople are making money and being philanthropic, politicians are getting those jobs for the public service and they need to be reminded that they’re not going to be rich.
They’re here to do a public service and that’s the profession they’ve taken and they understand it. I’m looking at a new world. I’m very optimistic.
Well certainly, in India, the change of government (with the Modi government) has rejuvenated the country. In South Africa, there’s still a perception that sometimes you hit into people who want to have their palms greased. Did you have any of that when you invested?
I have never had any experience of that. I don’t drink so when I go to a party and people offer me a drink, people will tell them, “He doesn’t drink. Don’t give it to him.” Its become who you are. Once you say, “I’m a FTSE 100 company. I’m based in London and I’ve signed a pledge. I’ve given the oath that I will not be bribing anybody”, those things help.
In Third World countries like India and Africa, it was a way of life. The Modi nomination was one of the reasons he has done that. He brought the GST. We had a lot of taxation. We had a different rule. He’s brought one tax to the entire country. He changed the policy. The way of doing business changed.
Welcome to South Africa. I think the more foreign investors like Vedanta that come into the country, the better.
I really wish South Africa well. They are very good people. They’ve come a long way and I’m looking forward. I think they’re stuck in the last leg. When they come out of it, they’ll be an example for others.
Alec Hogg is attending the World Economic Forum 2017 conference in Davos as the guest by Brightrock.
Anil Agarwal is the chairperson of Vedanta and this special podcast was brought to you by BrightRock.
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