By Bizodisha Bureau, Bhubaneswar, November 25, 2015 : Eleven years after it signed a joint venture agreement with the state owned Odisha Mining Corporation [OMC], the Anil Agarwal-owned Vedanta Alumina Ltd [VAL] is still hoping to have access to a bauxite mine to feed its one million ton per annum refinery at Lanjigarh in Odisha’s Kalahandi district, presently running at 50% of its capacity.

Vedanta’s Chief Operating Officer (COO) Abhijit Pati, who discussed the raw material shortage with state chief secretary G.C. Pati on Tuesday, reposed faith in the state government for facilitating supply of raw materials to run the alumina refinery plant.

Admitting that earlier the Company had decided to shut down the plant due to non-availability of bauxite and a falling global metal prices, Pati said, “The plant requires at least 3 lakh tons of bauxite ore per annum to run its refinery. At present, the production capacity of the refinery has fallen by about 50 percent due to non-availability of adequate raw materials”.

The Company is losing Rs 3 crore every day due to scarcity of raw material leading to cumulative loss of Rs. 4299 crore till October, 2015, sources said.

Pati, however, asserted that the company would not shut down the plant as it was hopeful that the state government would help in meeting the requirement of raw materials to run the plant.

As per the joint venture agreement, the OMC would apply for mining lease for Lanjigarh Mines (Niyamgiri) and Karlapat Mines having cumulative Bauxite deposit of 150 million tons to cater to Vedanta’s Alumina Refinery at Lanjigarh.

The JV also had the provision that in case Odisha government could not grant the mining lease for Karlapat, any other mines having at least a composite quantity of 150 million ton shall be made available as and when Vedanta proceed to set up an integrated Aluminium Smelter.

The Niyamgiri hilltop, which Vedanta was all set to mine, has an estimated 72 million tons of bauxite. However, it could not mine due to regulatory bottlenecks and opposition from the Dongaria Kondh tribals residing on the hill slopes.

Ironically, though the state government has committed 150 million tons of bauxite from its Lanjigarh (Niyamgiri) & Karlapat mines for exclusive use in Lanjigarh Refinery, it has not been able to provide bauxite so far crippling the existing refinery and smelter at Jharsuguda. It is still shocking to note that Odisha has proven Bauxite reserve of 1800 million tons.

Vedanta is now sourcing bauxite from other states at a cost more than Rs.3500 per ton against Rs.900 per ton sourced by others from their captive mines in the state. Besides, to make the outsourced Bauxite to meet the quality parameters, the Company is importing bauxite at Rs 5000 per ton losing foreign exchange to the tune of Rs 360 crore annually.