By Nageshwar Patnaik in Bhubaneswar, December 24, 2016 : There is something finally for Anil Agarwals’s Vedanta group to cheer about with state-run National Aluminium Company Ltd [Nalco] agreeing to allow Vedanta to participate in its alumina tenders.

Union mines minister Piyush Goyal is understood to have asked Nalco to allow Vedanta to participate in the alumina tenders.

A decade after investing Rs 52,000 crore in Odisha – the largest ever by a single corporate house – Anil Agarwal owned Vedanta Limited [VAL] has been groping in dark not knowing where it is heading for.

Vedanta Aluminium Ltd (VAL) had sought the intervention of the Odisha government and the entre to persuade the National Aluminium Company (Nalco) to sell surplus alumina to it.
Earlier, VAL had approached Nalco for alumina to run its smelting facility at Jharsuguda in Odisha, but it did not succeed as unions at Nalco were completely opposed to any deal with VAL. Any move to sell Vedanta alumina is seen as a step towards privatisation of the PSU.

VAL has two aluminium smelters at Jharsuguda. The a 0.5-million tonne per annum (mtpa) smelter plant, supported by a 1,215 Mw captive power plant, produces downstream products such as wire rods and billets. This unit is in operation and is meeting its alumina requirement through imports.

The other smelting facility, of 1.2 mtpa capacity, has been installed as a special economic zone (SEZ) unit. The overall performance of VAL’s smelter was hit after the Lanjigarh refining facility faced shutdown between December 5, 2012 and July 11, 2013 as bauxite sources dried up.

Earlier, Nalco had turned down VAL’s request to allow it to participate in the tendering process for sale of surplus alumina. VAL had even offered a premium of 7-10% over Nalco’s export price of alumina, but to no avail.

According to VAL’s estimates, Nalco could reduce transportation costs by up to $25 (about Rs 1,650) a tonne in moving alumina from its refining complex at Damanjodi to the Visakhapatnam port. The savings would accrue railway freight, port-handling charges, operations and maintenance and port-loading and unloading charges.

It is an irony that Nalco would rather export alumina than allow for its conversion within the country and Nalco after decades in the business and with captive mines, produced half the metal that some of its private sector competitors were producing. It produces 22.7 lakh tonne of alumina, of this it consumes 9 lakh tonne to make 4.6 lakh tonnes of aluminium from its smelter in Angul.