| The agreement between the state owned Orissa Mining Corporation (OMC) and Vedanta Alumina, a subsidiary of Sterlite Industries Ltd, for mining of bauxite at Lanjigarh in Kalahandi district, has come in for criticism.
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| Vedanta Alumina is setting up a 1.4 million tonne alumina refinery in the Kalahandi district at an estimated cost of Rs 4,000 crore.
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| For sourcing of raw material for this plant, the company has entered into a joint venture agreement with OMC for mining of bauxite.
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| In the joint venture, Vedanta Alumina has 74 per cent stake while OMC’s share is 26 per cent.
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| Vedanta Alumina will lift bauxite from the Lanjigarh mines at a price which comprises the production cost plus the royalty and the agency fee to be paid by the company.
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| Vedanta will pay royalty at the rate of Rs 46 per tonne to the government, but the agency fee payable to OMC was Rs 23 per tonne.
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| The Lanjigarh mines have a deposit of 125 million tonnes of bauxite valued at Rs 80,000 crore.
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| This determined price was lower than the current market price of bauxite, according to Srikant Jena, former Union minister and a Congress leader.
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| OMC will lose Rs 500 per tonne in this deal, he added.
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| The agreement with Vedanta Alumina was not done through a tender by OMC for the process of selection of the joint venture partner for mining, added Jena.
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| The Orissa government and Sterlite Iron and Steel, another Vedanta group company, have signed another agreement recently for setting up of a five million tonne steel plant in Keonjhar district.
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| Jena said the agreement stipulated the promoters should go for financial closure of the project within one year of signing of MoU.
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| The company announced in a press briefing that financial closure would take three years, Jena said. |
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