* CEO sees most commodities higher by year-end
* London shareholder meeting attracts protest (Adds CEO comment, details, background)
By Barbara Lewis
LONDON, Aug 5 (Reuters) - Mining and energy group VedantaResources expects to complete its merger with CairnIndia early next year, a move that would boost the firm'sfinancial strength, Vedanta's CEO said on Friday.
Vedanta is among the resource firms hit by a collapse incommodity prices and it is also facing legal action and activistprotests over its operations in Zambia.
In a speech to a London shareholders' meeting, CEO TomAlbanese said the rationale for the merger was compelling, whichwas why Vedanta announced improved terms in July.
"The merger ... will contribute significantly to our overallfinancial strength, not least through a potential re-rating,which will lower our overall cost of capital," Albanese said,according to a copy of his speech.
"We expect to close the transaction in the first quarter of2017."
The deal, which will give Vedanta access to oil and gasexplorer Cairn India's $3.5 billion cash pile, has facedopposition from some big minority shareholders, includingBritish-based Cairn Energy, but Albanese said he did notforesee obstacles.
Vedanta's debt to EBITDA ratio is 5.7 for 2016 compared withthe level of around 3 analysts view as comfortable.
Albanese told Reuters after the meeting that Vedanta hadrepaid close to $1.2 billion of bonds in the first quarter andhad no further Vedanta Resources debt maturing until 2018.
"We are committed to deleveraging the balance sheet," hesaid, citing a share price rally - the stock has almost doubledsince the end of last year - as proof of market confidence.
Albanese also predicted the commodity price slump has ended.
"My own personal view is that for the first time in morethan five years, most commodities will end this calendar yearhigher than they began the year," he said in his speech.
To Reuters, he declined to comment on a case involvingVedanta's copper mining in Zambia because it is being litigated.
Protesters, under the banner of the activist organisationFoil Vedanta, demonstrated at the shareholder meeting, chanting"shame, shame" and "looters, polluters" as executives walked in.
In May, a high court judge decided that a claim couldproceed in the English courts on behalf of 1,826 Zambianvillagers seeking compensation following what they say is damageto their health and land caused by Konkola Copper Mines. Vedanta, which has a majority stake in Konkola, hasappealed that decision and said Zambia is the appropriatejurisdiction. It expects to know the outcome of the appeal nextyear. (Reporting by Barbara Lewis; editing by Grant McCool)