Vedanta expects Orissa govt to take initiative

Put the ball in the Orissa government’s court, is Vedanta’s Plan B to get its proposed six million-tonne alumina refinery project going.

“We went on an invitation from the Orissa government. If an alternative site has to be located, the state government will have to do it,” said a Vedanta official.

The project has got into serious trouble, with official recommendations that it be scrapped for various reasons.

“In view of the ongoing delay in the approval of the Niyamgiri mining, the government of Orissa is actively considering allocation of an alternative source of bauxite to Vedanta’s alumina refinery, from the state of Orissa,” said the chief operating officer of Vedanta Aluminium, Mukesh Kumar.

Alternatively, the decision from the Union Ministry of Environment and Forests (MoEF) could be challenged in the Supreme Court. Or, the ministry could be approached. However, either way, the state government was expected to take the lead.

Orissa Mining Corporation, a state government undertaking, holds the lease of the Niyamgiri mines, and applied for all approvals to commence mining from Niyamgiri. The mining project was a joint venture between OMC and Sterlite Industries India Ltd, a Vedanta company.

At present, Vedanta has been buying bauxite at market rates from Chhattisgarh, Gujarat, Karnataka and Maharashtra.

The cost of production is now $280-300 a tonne. “With Niyamgiri, which has the best bauxite, the cost of production of $171-180 a tonne,” Kumar said.

“Kalahandi district, where the company’s alumina refinery is located, is one of the most backward districts in the country. As at March 31, Vedanta had invested $5.4 billion in its aluminium projects in Orissa. Around 10,000 people are employed at the Lanjigarh alumina refinery,” Kumar said.

Adding: “During the approval process, the mining project was extensively reviewed by the Supreme Court of India, including specific reviews by the expert committees appointed by the MoEF. The Supreme Court passed a favourable judgement on the project and granted the mining approval in August 2008.