L&T's mining trail hits a bumpy track

L&T had won prospecting license for Sijimali and Kutrumali bauxite mines in 1992

Engineering conglomerate L&T's bid to bag the prized Kutrumali and Sijimali bauxite deposits has hit the wall of delay. Although the Odisha government had recommended the twin bauxite deposits in favour of L&T, the central mines ministry has questioned the delay in grant of mineral concession to the proponent and the rationale behind allocation of such huge deposits.

Being the subsisting holder of prospecting license (PL) over the two deposits, L&T is entitled to get the mining lease (ML) under the amended Mines and Minerals (Development & Regulation) Act, 2015. The two mines, straddling Rayagada and Kalahandi districts, have combined reserves of around 300 million tonne of bauxite.

"We had recommended grant of ML in favour of L&T after deciding that it is the rightful claimant over the bauxite mines under the revised MMDR Act. But, the Union mines ministry has some queries. We will be furnishing our compliance", said a state government official.

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L&T had won PL for Sijimali and Kutrumali bauxite mines in 1992. But the PL had expired two years later, after which the state government had denied ML to L&T since it had no end-use plant.

In 2005, L&T through a joint venture with Dubai Aluminium (Dubal), had proposed a Rs 30,000 crore aluminium complex comprising three million tonne per annum (mtpa) alumina refinery at Rayagada, 1.5 mtpa smelter plant and a captive power plant (CPP).

The ultimate capacity of three mtpa of the proposed alumina refinery will require bauxite of nine mtpa, considering three tonne of bauxite for one tonne of alumina. This requirement will be met partly from Kutrumali (three mtpa) and partly from Sijimali (six mtpa).

Though a special purpose vehicle (SPV) called Raykal Aluminium was formed for the purpose, the project has so far remained a non-starter.

Seven years later, in 2012 when Dubal walked out of the SPV, Vedanta Aluminium Ltd (now Vedanta Ltd) bought 24% stake in the project.