Vedanta’s Orissa alumina refinery facing bauxite shortage

Thaindian.com, Dec 18, 2009
Bhubaneswar, Dec 18 (IANS) The alumina refinery of London-headquartered metals and mining company Vedanta Resources in Orissa’s Kalahandi district is facing acute bauxite shortage for several months, a company official said Friday.
“Since the past four months, we are not getting adequate quantity of bauxite,” said Mukesh Kumar, head of the plant.
“We need at least three million tonnes of bauxite ore per annum to keep the refinery running at 50 percent of its capacity, but we are getting on an average only half of that,” Kumar told IANS.
The one million tonne per annum capacity refinery at Lanjigarh, some 600 km from here, has been running at about 50 percent of its capacity since it was commissioned in August 2007.
There are multiple reasons for this, Kumar said. “Several mines in Orissa and Andhra Pradesh have stopped operations and supply has come down from some states due to the Maoist problem. Some states have banned sending bauxite out.”
The company had initially planned to mine bauxite from the nearby Niyamgiri hills but is yet to get the final nod from the government. It is currently sourcing bauxite from other states at market rates to keep the plant running.
“It is a disturbing situation,” Kumar said, adding that the refinery did not have enough stock of bauxite to run the plant for four to five hours.
What has aggravated the situation, according to him, is that transportation cost has alongside increased by more than 40 percent.
The alumina refinery, part of the Anil Agarwal-promoted Vedanta Resources, was set up on an investment of $800 million.
The firm had issued a tender two months ago to buy four million tonnes of bauxite from the domestic sellers but was left dissatisfied with the response.
“We have issued another tender again this week to buy a similar quantity,” Kumar said adding that mining permission in the hills was essential for it to reduce cost of production.