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Vedanta seeks quick supply of raw material in Odisha

Sun, 03rd Jul 2016 (Source:The Financial Express)

With plans to raise alumina production at its Lanjigarh refinery in Odisha’s Kalahandi district by 50 per cent, bauxite starved Vedanta today sought quick steps for raw material supply from within the state.

“We plan to enhance production in Lanjigarh refinery from 1 million tonne per annum to 1.5 mtpa, a 50 per cent increase. It will help in raising overall aluminium output,” said Abhijit Pati, Chief Executive Officer (Aluminium) of Vedanta Ltd.

Stating that the target is to raise aluminium production jointly by the company’s smelters at Jharsuguda in Odisha and Korba in Chhattisgarh to 1.5 mtpa, Pati said Jharsuguda would produce around 1 mt, while the rest would be contributed by Korba.
Around three million tonnes of alumina would be required in order to produce 1.5 mt of aluminium, he said adding that the company’s move to increase production would enable Lanjigarh refinery would provide 1.5 mt alumina.

Regarding the rest, Pati said the balance requirement would have to be met through imports.

Though the refinery at Lanjigarh is already armed with the approval to run at 4 mtpa, non-availability of bauxite within Odisha has been a major hurdle since the inception of the plant, he said, adding “lack of raw material has been a major disadvantage for us as our kitty is almost blank.”

In the absence of raw material supply within Odisha, Vedanta has been importing around 40 per cent of its bauxite requirement for Lanjigarh refinery, while the rest comes from domestic sources in states like Andhra Pradesh, Chhattisgarh and Gujarat, Pati said.

Stating that the company is adopting a three-pronged approach to deal with sliding global aluminium prices and bauxite crunch, Pati said a significant focus was on cost reduction, effort to optimise use of alumina and also capacity ramping up of aluminium smelters.

“Keeping all these in view, the government needs to take quick steps to resolve issues relating to bauxite supply to Vedanta at the earliest,” the CEO said, adding steps should also be taken to expedite the auctioning process.

At the same time, Pati also expressed hope that state-run Odisha Mining Corporation (OMC) would speed up the process for ensuring long-term supply of bauxite from two mines earmarked by the state government for the purpose.

“Speed is really important as far as the entire issue of supply of bauxite is concerned. The authorities need to act in time,” he said.

Uninterrupted supply of local bauxite would not only enable Vedanta to ramp up its Lanjiragh refinery but also play a significant role in putting in full steam the second smelting unit as well as the proposed aluminium park at Jharsuguda.

Stating that efforts at smelting capacity ramping up at Jharsuguda has received a boost following permission to utilise three units of the 2400 mw (3×600 mw) power plant there for captive use, Pati said it would certainly play a significant role in stepping up smelting capacity which was hit due to power requirement.

If Vedanta plants are able to run at full capacity, it would facilitate the proposed downstream aluminium park at Jharsuguda, which can attract investment of at least Rs 1,000 crore and provide direct and indirect employment to around 17,000 people, he said.

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