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Vedanta posts 17 per cent growth in aluminium production for FY19

The spike in aluminium output was also helped by volume growth at Vedanta's Lanjigarh alumina refinery

Jayajit Dash  |  Bhubaneswar 

Vedanta's aluminium refinery at Lanjigarh, Odisha, seen from the Niyamgiri Hills
Vedanta's aluminium refinery at Lanjigarh, Odisha, seen from the Niyamgiri Hills

Diversified metals & mining conglomerate Ltd has posted a 17 per cent growth in production, buoyed by stabilisation and ramp-up of its smelters at Jharsuguda (Odisha). In volume terms, output in the last fiscal was 1.95 million tonnes (mt), its best ever, outstripping FY18's 1.67 mt, making Vedanta, the country's largest producer of the white metal, upstaging Hindalco Industries.

output at Vedanta-owned Bharat Aluminium Company (BALCO) smelters at Korba (Chhattisgarh) remained flat. The output was bolstered by Vedanta's two smelters at Jharsuguda- the standalone facility and the second within an SEZ (Special Economic Zone) notified area in its vicinity. Output at the first smelter grew 24 per cent while the SEZ unit logged a higher production surge of 27 per cent.

The spike in aluminium output was also helped by volume growth at Vedanta's refinery. production moved up 24 per cent to reach 1.5 mt, riding on the plant's de-bottlenecking and enhanced local sourcing of bauxite from Mining Corporation (OMC).

“Improved captive production and locally sourced bauxite are key to drive our aluminium costs lower. The peak run rate at refinery during the year was 1.8 mtpa (million tonnes per annum)”, Ltd said in its production statement.

OMC, a state-controlled mining concern, started feeding Vedanta's refinery from Q1 of FY19. has ramped up bauxite output at its Kodingamali mine to achieve a peak rate of 3 mtpa. In line with state policy, liquidates 70 per cent of its mined bauxite to under a long-term linkage agreement. The balance quantity is offered for bids at bauxite auctions held within a span of six months.

For Vedanta, coal continues to be a key thrust area. “The linkage coal materialization for the captive power plants has improved in Q4 FY2019 as compared to previous quarters resulting in no power import for the last four months. The company secured 3.2 million tonnes of coal in Tranche IV auction and materialization has started from March 2019. This will improve coal availability and therefore help to drive our costs down”, the statement added.

A company update report on Vedanta Ltd by Edelweiss Research says despite investors' knee-jerk reactions, the conglomerate has actually delivered 27 per cent returns over the past two months and achieved the envisaged target price. However, with zinc prices on the London Metal Exchange (LME) peaking and capital allocation risks persisting, Edelweiss expects limited upside potential on the company stock.

First Published: Tue, April 09 2019. 18:58 IST
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