Deal sparks hopes for Vedanta's Lanjigarh plant

Vedanta is in crisis over securing raw material ever since Niyamgiri mining project was shut down

The raw material shortage that Vedanta’s Odisha project is facing is likely to lessen with the state government entering into a deal with state-owned Odisha Mining Corporation on using the Kodingamali bauxite mines, which have deposits of 81 million tonnes.

Vedanta is in crisis over securing raw material for its Lanjigarh alumina refinery, 550 km south of Bhubaneswar, ever since the Niyamgiri bauxite mining project, which lies in close vicinity, was shut down following protests by tribals and the rejection of the company’s plea by gram sabhas, which took place under the direction of the Supreme Court.

Following this, the state government had ended the joint venture between Vedanta and Odisha Mining Corporation to raise bauxite at the Niyamgiri mines, which belong to the state-owned undertaking.

Since then, Vedanta has been pressing the state government to provide alternative sources of bauxite.

Though two bauxite mines, in Kalrapat and Sasubahumali, have been reserved for Odisha Mining Corporation, the lease order has not been granted because the forest and environment clearances are awaited.

However, with the conditional approvals having been given, the lease deed for the Kodingamali mines, about 100 km from Lanjigarh, was signed on Wednesday, and this has revived hopes for the project. 

At present, the installed capacity of Vedanta’s Lanjigarh alumina refinery is 2 million tonnes a year, and it can be expanded to 4 million tonnes annually, which is what has been allowed. However, the plant is producing one million tonne of alumina a year. 

Vedanta sources bauxite from Gujarat, Chhattisgarh and Andhra Pradesh and imports the material. 

Besides the agreement with Odisha Mining Corporation, the state government on Wednesday executed lease deeds with other miners on deposits of major minerals such as iron ore (five blocks), manganese (two blocks), graphite (one mine), tin (one mine) and semi-precious stones (six mines). 

The mining lease approvals of 44 mineral blocks lapsed on Wednesday, the deadline set by the amended MMDR Act (Mines and Minerals Development and Regulation Act), 2015, because they could not obtain the clearances, mostly related to forests and the environment.