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The opening of the Kodingamali lease would mark OMC's entry into bauxite mining. As of now, it is an established player in iron ore and chromite excavation. Though OMC has a few other bauxite mines in its kitty, they have not been able to start operations as they lack the regulatory clearances. Bauxite deposits at Karlapat and Sasubohumali, despite being reserved in OMC's favour, have not opened up for want of environment and forest clearances.
"We have all clearances in place for Kodingamali. Hopefully, mining activity will take off in two months”, said R Vineel Krishna, managing director, OMC.
Bauxite mining from Kodingamali is expected to come to the rescue of alumina units, such as the Lanjigarh refinery owned by Vedanta, which are struggling to source raw material locally. The Lanjigarh unit is currently fed entirely by bauxite sourced from other states and abroad. Ever since local tribals nixed plan to mine the bauxite-laden Niyamgiri hills straddling Rayagada and Kalahandi districts in south Odisha, Vedanta has been struggling to arrange bauxite to run the refinery. The company has also been pleading to the Odisha government to make arrangements for local bauxite sourcing.
However, OMC has ruled out any special arrangement with Vedanta for supplies.
The Kodingamali lease, which has 81 million tonnes of reserves, could potentially position OMC as a long-term supplier of bauxite like iron ore and chrome ore. Apart from Vedanta, Andhra Pradesh-based Anrak Aluminium, a joint venture of the Penna Group and Ras-Al-Khaimah Investment Authority (UAE), has also turned to OMC for supplies. Anrak Aluminium has already installed its alumina refinery of 1.5 mtpa capacity at Makavarapalem, Andhra Pradesh, on the promise of assured bauxite supplies from Andhra Pradesh Mineral Development Corporation (APMDC). But, as local bauxite supplies dimmed, Anrak Aluminium has been forced to rely on OMC.
The Kodingamali bauxite lease of OMC is spread over an area of 428.31 hectares in Koraput and Rayagada districts.