Vedanta puts Lanjigarh alumina refinery expansion on hold

Company's fresh application for environmental clearance with regard to the expansion project at Lanjigarh is in process

Vedanta Resources has put on hold a five-fold expansion plan of its Lanjigarh refinery in Odisha even as it is mulling sourcing bauxite from other sources away from Niyamgiri Hills to feed existing and future operations.

"With regard to the expansion project at Lanjigarh, the company's fresh application for environmental clearance is in process and in the meantime the expansion plans are on hold," the Anil Agarwal-led company said in its results statement.

"These matters are critical to the planned aluminium refinery operations of the company. The management expects that with the timely support of relevant authorities, these matters will be satisfactorily resolved," it added.

Sesa Sterlite, a Vedanta Group company, operates a one million tonne per annum (mtpa) greenfield alumina refinery plant and a 75 MW captive power plant at Lanjigarh. It plans to enhance the capacity of the alumina refinery to five mtpa.

Production at Lanjigarh plant recommenced in July 2013 after a temporary shutdown and the refinery operated at 91 per cent capacity in the last quarter of 2013-14.

As per the Memorandum of Understanding (MoU), the Odisha government was required to make 150 million tonnes of bauxite, a key raw material for alumina production, available for the company.

Meanwhile, Ministry of Environment and Forests rejected the grant of forest clearance for the Niyamgiri mining project after local gram sabhas rejected the mining proposal.

After this, Vedanta said it would not consider developing any bauxite resources in Niyamgiri mines without the consent of the local communities.

"We continue to actively engage in discussions with the Odisha Government for allotment of alternative bauxite mines. The company is also considering sourcing bauxite from alternate sources to support the existing and expanded refinery operations," the company said.