Vedanta hopes for Lanjigarh expansion nod by 2020

Company expects to increase capacity from existing 4 mtpa to to six million tonne per annum by 2020

Vedanta, the London-headquartered metals and mining major, is looking at the possibility of expanding its alumina refinery production at Lanjigarh in Kalahandi district of Odisha beyond the present cap of four million tonnes per annum (mtpa).

The refinery’s rated capacity is six mtpa and Vedanta expects to get all clearances to operate it at that level by 2020.

“We are hopeful of receiving all approvals for expanding the capacity to six mtpa by then. But, to operate at that capacity, a lot will depend on availability of local bauxite sources. We are evaluating options, like local sourcing arrangements and participating in auctions of bauxite assets. Availability of local bauxite would be the key factor, since we are incurring huge cost in transportation,” said a senior executive.

The company is hoping for state government help on this. “Odisha has abundant bauxite resources and given the government's initiatives, (we are) confident that bauxite will be made available in the short to medium term. The company has entered into agreements with various suppliers, internationally and domestically, to ensure availability. In the initial years, the company has assumed that bauxite will be purchased from third party suppliers, till sourced from own mines,” Vedanta has said in its financial statement for the year ended March 31, 2017.

In 2016-17, the refinery produced 1.2 mt, growth of 24 per cent. During 2017-18, the company will continue to expand operations. The main sources of bauxite would be a mix of mines at Bharat Aluminum Company, a sister concern, and the balance from other sources, including import.

In FY17, Vedanta’s total bauxite requirement was pegged at 3.4 mt. Captive mines contributed 31 per cent and the company arranged 23 per cent from domestic sources. Import made the remaining 46 per cent.