Vedanta kicks off ramp up of second smelter at Jharsuguda

The mining major aims to commission two potlines of the smelter to reach a capacity of 0.6 mtpa by the end of this financial year

Diversified metals and mining major Vedanta Resources has initiated the ramp up of its second aluminium smelter at Jharsuguda.

Vedanta aims to commission two potlines of the smelter to reach a capacity of 0.6 million tonne per annum (mtpa) by the end of this financial year. The second smelter with a rated capacity of 1.25 mtpa is located within the product specific SEZ (Special Economic Zone) developed by Vedanta close to the site of its standalone smelter.

"The second smelter at Jharsuguda has been lying idle for three years mainly due to want of power. Now that we have got a favourable order from the state power regulator to use two units (600 Mw each) from our own power plant (of 2400 Mw capacity), we are in a position to expand capacity of this smelter. We have also decided to raise capacity of our second smelter at Korba to 0.5 mtpa. The expansion work on this smelter would take off from April 21", a senior official at Vedanta Ltd told Business Standard.

Vedanta owns two aluminium smelting facilities at Jharsuguda. While the standalone smelter of 0.5 million tonne per annum (mtpa) is running at full capacity, the other smelting unit of 1.25 mtpa capacity, within its product specific SEZ, was running at depleted capacity for want of power.

The company has already invested Rs 12,000 crore on the smelter complex at Jharsuguda. Commissioning of the SEZ facility promised to boost the local economy by generating business potential worth Rs 15,000 crore every year. Direct and indirect employment opportunities for nearly 12,000 persons are set to be created.

In 2015-16, Vedanta logged four-fold jump in aluminium production from 19,000 tonne to 76,000 tonne. Vedanta's overall aluminium output moved up five per cent from 0.87 million tonne (mt) to 0.92 mt by the end of 2015-16.

Alumina production from Vedanta's Lanjigarh refinery was marginally down one per cent last financial year to 0.97 mt as one stream was under shutdown for want of bauxite. Vedanta has approval to expand Lanjigarh refinery to four mtpa and it would be ramped up in phases on further visibility of bauxite sources, the company said in a statement.

In 2015-16, Vedanta imported around one million tonne of alumina and the imports are going to escalate this financial year with the company going for ramp up in smelter capacities.

"Global alumina prices are at the level of $250 and at this price point, it would be sustainable for us to carry on with imports. Also, we are focusing on cost reduction and operational efficiency. Our overall aluminium production cost is $1,477 a tonne while that of Jharsuguda smelter alone is still lower at $1,460 per tonne, making us one of the most cost competitive aluminium producers", he said.

During last financial year, Vedanta's sales of value added products in aluminium business rose seven per cent to 0.2 mt, supporting higher realisations.