Vedanta hopeful of restarting Lanjigarh refinery by July

Economic Times, May 19, 2013
NEW DELHI: Diversified conglomerateVedanta Resources expects to restart its alumina refinery in Odisha'sLanjigarh by July and is hopeful of securing approvals for doing mining at Niyamgiri hills in the state by September. 

"Management expects that the mining approvals for mining and the statutory approvals for the expansion project would be received as per the timelines mentioned below -- restart of the existing (refinery) plant (by) July, 2013," the company said in its annual financial statements for 2012-13. 

"Mining operations at Niyamgiri -- Mining approval (is expected) by September 2013 with production expected to commence in September 2015," it added. 

The London based India-focused company is also expecting to get approval for expanding the refinery -- currently closed due to paucity of bauxite -- by January next year, with expansion project to commence from October, 2014, it said. 

However, it also cautioned that "the above timelines are not in control of the company." 

The company said it is not considering any impairment of the refinery at this stage due to certain assumptions including Odisha having abundant bauxite reserves and "under the terms of the MoU with Odisha Government, management is confident that bauxite will be made available in the short to medium term". 

Last week, Vedanta CEO M S Mehta had said his firm is hopeful of getting support from the state government in securing bauxite for the refinery. He had also indicated that Vedanta is working on securing bauxite from alternative sources within the state. 

The one-million tonne Lanjigarh refinery is closed since December last year due to paucity of bauxite -- the key raw material used to make alumina (the intermediate product for making aluminium). 

The plant is run by Vedanta's associate firm Vedanta Aluminium. The company has invested Rs 50,000 crore in the refinery alongwith an aluminium smelter of 1.5 MTPA at Jharsuguda and a captive power plant in the state. It also has plans to expand the refinery capacity to 5 MTPA per year. 

The now-closed refinery was to get bauxite from nearby Niyamgiri hills through a joint venture of Sterlite IndustriesBSE -1.32 % and Odisha Mining Corporation (OMC). However, the Environment Ministry denied final forest clearance for the mining project in 2010, leading to OMC challenging the decision in the Supreme Court. 

The apex court, in its order dated April 18, 2013, had directed the gram sabhas of Rayagada and Kalahandi districts to decide the issues in three months arising out of the mining project, including that of the tribals residing in the area. 

Besides, the MoEF was directed by the court to take a final decision on stage-II final clearance in two months of after a report from the gram sabhas is received. 

The Odisha government is yet to decide the dates of meetings of the gram sabhas.