Odisha backs L&T bid for bauxite deposits, sends DGPS report

Despite being a PL holder over Kutrumali and Sijimali bauxite leases, L&T's bid to bag the deposits had come unstuck

Engineering giant Larsen & Toubro's (L&T) bid to secure Kutrumali and Sijimali bauxite deposits has got a major breakthrough with the Odisha government sending the DGPS (Differential Global Positioning System) survey report on the mines to the Union mines ministry.

"The Centre had asked for DGPS survey report in respect of Kutrumali and Sijimali bauxite mines and we have sent it. Now, there should not be any hurdle for L&T to secure these deposits since they already have a prospecting license (PL)", said a senior government official.

Despite being a PL holder over Kutrumali and Sijimali bauxite leases, L&T's bid to bag the deposits had come unstuck. The lack of any end use plant had aborted L&T's earlier attempts of winning the mining lease (ML).

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).

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 per cent stake in the project.

The grant of ML to L&T over the bauxite deposits can also come to the rescue of Vedanta refinery at Lanjigarh, which is facing raw material crunch due to denial of supplies from Niyamgiri mines on environmental grounds and local protests. The refinery is gearing up for shutdown and has already cut capacity by 35 per cent.

The state government's counsel in the Supreme Court Uday U Lalit, in 2013, had given a legal opinion in favour of L&T for grant of ML over Kutrumali and Sijimali. The counsel had also opined that long-term supplies to Vedanta's refinery from the two bauxite deposits of L&T is legally tenable.