No solution in sight for Vedanta's woes

Amid the overwhelming opposition to the Niyamgiri bauxite mining project at the recently held gram sabhas, Vedanta Aluminium is in a quandary on a sustainable alternative for its one-million-tonne Lanjigarh refinery. Though the company has applied for prospecting licences and mining leases at 26 sites in a 150-km radius of the Niyamgiri Hills, it feels a solution to its raw material concern is unlikely.

“Most of these sites are unexplored. To be optimistic, the average period from an application for a mining lease to allotment and getting all statutory approvals is seven-eight years. To start operations, this may stretch to more than a decade,” said a senior Vedanta Aluminium official. “Also, there is no guarantee there won’t be any Niyamgiri-type agitation at a new location, as the bauxite sites along the Eastern Ghats have the same topography — hilly terrain, jungles, tribals and their sacred places.”

“So, it will not be sustainable to run the refinery so long (for about a decade) by sourcing bauxite from outside the state,” he added.

In December 2012, the company had shut the Lanjigarh plant. On July 11, operations were restarted by procuring bauxite from Jharkhand, Chhattisgarh and Maharashtra. However, bauxite imports are now bleeding the refinery, with transportation and logistics costs putting an additional burden of Rs 600 crore a year on plant operations.

Amid all this, the company is now pinning its hopes on a report by an inter-ministerial group formed by the state government to address the long-term raw material supply constraints of industries in the state. Recently, the group gave its report to Chief Minister Naveen Patnaik, who is expected to present it before the cabinet for discussions.

To overcome raw material woes, the company has also urged the state government to expedite the processing of pending applications of state-owned Odisha Mining Corporation (OMC), especially those of bauxite leases in non-forest areas. These applications are either at the prospecting licence or mining lease stages. The mines include Maliparbat, Karnopodikonda, Ballada, Kakrimali, Hatimali and Majhingamali in Koraput district, Kisunmali in Kalahandi district and Choranimaribhata-A, Choranmaribhata-B, Siadimala-east and Siadimali-west in Rayagada district.

The company hopes to sign an agreement with OMC to secure raw material for its project. OMC, the primary casualty in the Niyamgiri debacle (the mine was in its name), is nonchalant on the outcome of the gram sabhas.

“We are not bothered about the gram sabhas. We are not interfering in the process which is being conducted according to the Supreme Court direction,” says Saswat Mishra, OMC’s chairman and managing director. He declined to comment on a course of action.

The indifference of the state government, particularly OMC, towards the recent developments related to Niyamgiri has made the company uneasy about its investments in the state, even as its parent, Vedanta Resources, prepares to face shareholders at its annual general meeting in London on August 1.

Including Rs 5,000 crore invested in the Lanjigarh refinery, the company has spent Rs 50,000 crore in a 0.5-million-tonne aluminium smelter, a 1,215-Mw captive power plant and a 2,400-Mw thermal power complex with independent power producer status.