Jena opposes Odisha's decision for long-term bauxite linkage to Vedanta

The decks for Vedanta for sourcing raw material were cleared recently after the Odisha Cabinet approved a long-term linkage policy for bauxite supply from state-owned OMC

Launching a scathing attack on Odisha government's decision for providing long-term bauxite linkage to Vedanta, former Union minister Srikant Jena questioned the need for such a move.

The decks for Vedanta for sourcing raw material were cleared recently after the Odisha Cabinet approved a long-term linkage policy for bauxite supply from state-owned Odisha Mining Corporation (OMC) at market prices discovered through auctions.

As per the terms of this policy, 70 per cent of the saleable stock of bauxite would be made available for long-term linkage (LTL) and the rest 30 per cent is to be sold through national e-auctions.

As per the cabinet nod, the weighted average price derived from the national e-auction would be the LTL price. The floor price for the national e-auction would be kept at cost of production plus a profit margin of 50 per cent.

 "If they have established a plant in the state, they should be allowed to source bauxite at the market price the company is purchasing now. Or else, they should be given two-three per cent discount on price at best", he added.

The prices of the bauxite at the e-auction will be dictated by  Vedanta as all other aluminium makers have their captive mines. Vedanta will get a benefit of Rs 3,000 tonne per tonne of bauxite and the loss to the state coffers will be Rs 100 billion for ten years, he alleged.

He stressed that the state governments should immediately cancel the policy as it is against the interest of the state, otherwise the matter will be taken to the streets.

Instead, OMC should establish an aluminium plant, he proposed.

"OMC has now become a contractor for  Vedanta instead of being the owner", the senior Congress leader told media persons.

He accused the Chief Secretary and other officials who have formulated the detailed modalities for the supply of bauxite ore by the OMC to the Lanjigarh alumina refinery, for compromising the interest of the state.

Both BJP and Biju Janata Dal are hand in gloves as the former has accorded the clearances.

"All steps are being taken to ensure for smooth industrialisation in the state with the sustainable development of the people.  It is too early to speak on the loss figures. Let bauxite be extracted from the mines and e-auction be done, then only one can comment. We will ensure that industries run in the state seamlessly and on the other hand, the state gets its targeted revenue", said Prafulla Mallick, state steel and mines minister.