Input supply issues dog Vedanta

Company mulling solutions for feeding Lanjigarh refinery, operating on imported bauxite; Jharsuguda smelter also at 25% capacity

London-listed Vedanta Resources, the diversified metals and mining major, is hopeful of expanding capacity of its Lanjigarh alumina refinery in Odisha to two million tonnes per annum, up from the existing one mt, within a year of getting the necessary approvals.

“We will gradually raise the capacity to six million tonnes (mt) a year. It will have a tremendous employment opportunity for people in the area. The gram sabha held recently was very positive. We got overwhelming support from the people, who want industry and development in the area,” Vedanta chairman Anil Agarwal said after meeting Chief Minister Naveen Patnaik.

He said the Lanjigarh refinery was operating at 25 per cent of capacity. The capacity expansion would mean Rs 10,000 crore expenditure to the already invested Rs 52,000 crore over 10 years to build alumina, aluminium and power facilities at Lanjigarh and Jharsuguda, respectively.  

After being denied access to the Niyamgiri bauxite deposits of Odisha Mining Corporation following tribal protests, the Lanjigarh refinery is operating on bauxite sourced from Andhra, Gujarat, Chhattisgarh and Jharkhand. “We are also importing bauxite from Guinea and other countries. It is unfortunate that India has the largest bauxite deposits but we are importing,” he said. Asked on the assurance given by the Odisha government on bauxite supply, Agarwal said, “The government is very keen to give us bauxite. They are looking at various options. Presently, the Larsen & Toubro (L&T) bauxite deposits is a concrete option. There are a couple of others.”

Vedanta had entered a pact with L&T to source bauxite from the latter’s Sijimali and Kutrumali deposits, for which the engineering major had got a prospecting licence much earlier. The twin deposits, across Kalahandi and Rayagada districts, have reserves of close to 300 mt. However, the state government is yet to decide on  a mining lease to L&T. After the Niyamgiri setback, the state government recently allotted three laterite bauxite mines in Koraput district with a combined deposit of three to five mt of bauxite in favour of Vedanta, as short-term relief.

“Since the percentage of bauxite is very much less in the case of laterite deposits (20 to 25 per cent), we have to invest more on processing in such mines. We are currently evaluating these deposits,” said Agarwal. The Vedanta chief is also worried over the Jharsuguda aluminium smelter running at depleted capacity. “We are running at only 25 per cent capacity. We need to have full power to run the smelter. We are looking at achieving aluminium production of two mt and will ensure it is all used within the state. There is a potential for 100 more aluminium-based industries to come up in the state,” he said.