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Vedanta to stick to December 5 deadline for closure of refinery

Sadananda Mohapatra  |  Kolkata/ Bhubaneswar 

Vednata Aluminium Ltd (VAL), which had given a three-month advance notice to the Odisha government for closure of its Lanjigarh alumina refinery from December 5 citing unavailability of bauxite, may not relent on its decision as there is still no solution to the raw material problems.

Though the company top including group chairman Anil Agrawal and VAL MD SK Rungta called on the state chief minister and chief secretary seeking alternate arrangement for supply of bauxite to the plant, there has been no progress in this regard making the shutdown of the plant by the given deadline an inevitable outcome.

“In the recent meeting between the state government and Vedanta officials, the government could not come out with a solution to arrange bauxite for the Lanjigarh refinery. The company has no other alternative but to shut down the plant from December 5 onwards,” a company official told Business Standard.

In its September 5 notice to the state labour commissioner and industries department, the company had said running the plant was no longer sustainable “unless the Odisha government finds a solution for bauxite supply”.

The company had closed the one million tonne per annum alumina refinery temporarily in October after all its bauxite stocks exhausted. It had reopened the refinery a week after ensuring bauxite supplies of about 40,000 tonnes from Bharat Aluminum Company's (Balco) Kawardah mines in Chhattisgarh and about 92,000 tonne from Gujarat Mineral Development Corporation (GMDC).“There are no more stocks as of now nor do we have any hope to get raw material from anywhere else to run the plant smoothly,” said the company official.

VAL has invested Rs 5,000 crore in the Lanjigarh plant so far and incurred losses to the tune of Rs 2,500 crore during the past five years of its stunted operation.

The closure of the plant is expected to affect the livelihood of 6,500 people, including 550 employed directly, 5,000 engaged indirectly and 1,000 self-employed in and around the plant. VAL had formed a JV with the state-run Odisha Mining Corporation (OMC) for the supply of 150 million tonnes of bauxite, which included 78-million tonne reserves from the Niyamgiri hills.While bauxite mining in the Niyamgiri hills was prohibited by the Union Ministry of Environment and Forests (MoEF), there was no attempt by OMC or the state government to supply bauxite from other sources.

OMC has said its hands are tied down by rule of law since the agreement was meant only for supply from Niyamgiri mines, which is a matter of sub-judice currently. The miner has no large bauxite mine under its ownership as of now.

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First Published: Mon, December 03 2012. 00:07 IST