Nod for Niyamgiri mines likely soon

Business Standard, Nov 11, 2009
Dilip Kumar Jha / Mumbai


The project will supply bauxite to Vedanta’s alumina refinery in Kalahandi.

State-owned Orissa Mining Corporation (OMC) is likely to get final approval from the Union ministry of environment and forests (MOEF) this month for the much-discussed Niyamgiri hill mining project near Lanjigarh in Kalahandi district for supplying bauxite to the alumina refinery, close by, of Vedanta Aluminium Ltd.

This is sought to be done through a joint venture company, South West Orissa Bauxite Mining Pvt Ltd, a 74:26 holding between Sterlite Industries (SIIL) and OMC. The company has completed all formalities required. The Supreme Court had already cleared the project 18 months earlier, following affidavits filed by SIIL, OMC and the Orissa government on the rehabilitation package.

OMC has been following the matter with the MOEF and they are expecting approval by the end of November, said Mukesh Kumar, Chief Operating Officer of Vedanta Aluminium (VAL).

After that, four to five months will be required for preliminary preparations for actual commencement of bauxite mining and another two to three months for commercial production. In all, the bauxite mining may commence in eight to nine months from now, Kumar said.

The JV was formed after signing of a modified JV agreement between SIIL and OMC in February this year, paving the way for the start of bauxite mining in the Niyamgiri hills.

The purpose of the JV was to sort out the issue of raising Bauxite for VAL Alumina Refinery at lanjigarh where VAL has already spent about Rs 120 crore till date under corporate social responsibility (CSR).

On rehabilitation, Kumar said, “Bauxite is a hard rock which exists above 900 metres from the surface. Therefore, the Niyamgiri hills are neither crops nor inhabitants-friendly. Resistance is received from some section of the people with vested interest, as there is no habitation on the mines top and no displacement is involved.” It is a description which has been bitterly disputed by area residents and ecology activists, not only in India but also abroad.

Bauxite mining in the Lanjigarh project is important for VAL to feed its one million-tonne (MT) alumina refinery and a 0.5 MT aluminium smelter. The mines in Lanjigarh possess a minimum 73 MT of reserves, likely to go up further. The optimal location of VAL affords easy reach to recoverable bauxite deposits of over 150 MT within a 60 km radius of Lanjigarh, the location of its alumina refinery.

The bauxite variety here boasts of low reactive silica content, adaptability to low temperature and low pressure digestion, which entails low cost and high quality alumina production. VAL is further aided by availability of ample reserves of coal (62 billion tonnes) in Orissa, leading to low cost of power generation.

Orissa, a mineral-rich state, possesses about 1.7 billion tonnes of India’s total bauxite reserves of 3.3 billion tonnes. Such an integrated aluminium complex, which would be one of the largest in Asia, would give a significant boost to the state economy, besides providing a number of jobs, says the company.

VAL has invested in a 0.5 MT aluminum smelter and 1,215 Mw captive power plant, supported by highly modern infrastructure at Jharsuguda, Orissa.

Jharsuguda is also the site of a 2,400 MW independent power plant being set up by group company Sterlite Energy Ltd to meet the growing demand for power from both urban and rural consumers. It intends to expand the fully integrated alumina refining capacity to around 2 MT. Further expansion would increase the project capacity to 5 MT by 2012, said Kumar, and then to 6 MT.