A bandh for opening Vedanta's Odisha refinery

A battered Vedanta Group Chairman Anil Aggarwal has something to cheer about

It’s a bandh not to shut down but to kickstart operations.

Battered by politics and environmental lobbyists, Vedanta Group Chairman Anil Aggarwal had something to cheer about on Wednesday when pro-industry activists observed a bandh at Odisha’s Lanjigarh, where Vedanta Aluminium Ltd (VAL) has set up a one-million-tonne alumina refinery, urging the government to provide the company an alternative bauxite mine to save the unit from being shut down.

In a state where many projects like those of Posco and ArcelorMittal are stalled because of protest of locals, hundreds of people under the banner of Lanjigarh Anchalika Bikash Parishad (LABP) staged a rally in support of their demand. While vehicular traffic in the area came to a standstill, the market in the industrial town was closed down in response to the bandh call. Police said there was no untoward incident.

After being denied access to the bauxite deposits at Niyamgiri Hills by the Union Ministry of Environment and Forest (MoEF), VAL was running the plant with raw material bauxite sourced from other states. But the supply glitches have depleted the company’s bauxite stock to almost 'zero level', raising fears that the refinery may be shut down temporarily.

“The state and central government should provide a bauxite mine to VAL to keep the Lanjigarh refinery afloat,” the agitators said.

More than 7,000 people are employed directly or indirectly at the Lanjigarh refinery. “All these people will lose their jobs and the development of the area will be jeopardised if Vedanta shuts down its unit here. Our children will be deprived of quality education and health care facilities,” said the president of LABP, Sridhara Pensia. “We will go to the chief minister and, if required, to Delhi, to meet the prime minister if bauxite mine is not provided to Vedanta”, he added.

Last week, several employees of VAL also staged demonstration to press for the same demand.

Before setting up of its refinery at Lanjigarh, VAL had entered an agreement with state-run Odisha Mining Corporation (OMC) for supply of bauxite. But attempts to mine bauxite at Niyamagiri went awry with the Union Ministry of Environment and Forest (MoEF) scrapping the environment clearance on August 24, 2010. The lack of raw material security has hamstrung VAL’s Rs 60,000-crore mega project, comprising the refinery, 0.5-million-tonne aluminium smelter and 1,250-Mw captive power plant. The company has already pumped in a staggering Rs 45,000 crore, but with no raw material linkages it has been desperately seeking alternatives to revive its sinking production.

Earlier in the year, The London-listed Vedanta, entered into a tripartite agreement with L&T and its erstwhile partner Dubai Aluminium Company (Dubal) to buy them out from their mega mining-cum-aluminium venture in the state called Raykal Aluminium. Raykal was the SPV floated by the two partners.

Vedanta has already acquired 24.5 per cent stake in Raykal Aluminium for Rs 200.70 crore and has the right to acquire the entire 100 per cent over a period of time for a total consideration of Rs 1,811 crore “subject to certain milestones being achieved.”