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Tuesday, August 11, 2015
Centre insists on DGPS survey before grant of bauxite leases to L&T
Business Standard, Aug 11, 2015
Lack of any end use plant had aborted L&T's earlier attempts of winning the ML
Jayajit Dash | BhubaneswarAugust 11, 2015 Last Updated at 15:52 IST
The Union mines ministry has stressed on DGPS(Differential Global Positioning System) survey of Kutrumali and Sijimali bauxite deposits before grant of mining lease (ML) to engineering & construction major Larsen & Toubro (L&T).
"The ministry has asked us to commission the DGPS survey of Kutrumali and Sijimali bauxite deposits. The survey is ongoing and we hope to send the report to the ministry after its completion. Apart from the survey, there is no other roadblock for L&T to get the ML", said an official source.
Since L&T already has a subsisting prospecting license (PL) over these twin deposits, it is hopeful to bag them. Both Kutrumali and Sijimali, spread across Rayagada and Kalahandi districts, have combined reserve of 300 million tonne of bauxite.
Despite being a PL holder over Kutrumali and Sijimali bauxite leases, L&T's bid to bag the deposits had come unstuck. The lack of any end use plant had aborted L&T's earlier attempts of winning the ML.
L&T had won PL for Sijimali and Kutrumali bauxite mines in 1992. But the PL had expired two years later, after which the state government had denied ML to L&T since it had no end-use plant.
In 2005, L&T through a joint venture with Dubai Aluminium (Dubal), had proposed a Rs 30,000 crore aluminium complex comprising three million tonne per annum (mtpa) alumina refinery at Rayagada, 1.5 mtpa smelter plant and a captive power plant (CPP).
Though a special purpose vehicle (SPV) called Raykal Aluminium was formed for the purpose, the project has so far remained a non-starter.
Seven years later, in 2012 when Dubal walked out of the SPV, Vedanta Aluminium Ltd (now Vedanta Ltd) bought 24 per cent stake in the project.
The grant of ML to L&T over the bauxite deposits can also come to the rescue of Vedanta refinery at Lanjigarh, which is facing raw material crunch due to denial of supplies from Niyamgiri mines on environmental grounds and local protests. The refinery is currently keeping its operation barely afloat by importing bauxite from states like Chhatisgarh and Andhra Pradesh and also from places abroad like New Guinea.
The state government's counsel in the Supreme Court Uday U Lalit, in 2013, had given a legal opinion in favour of L&T for grant of ML over Kutrumali and Sijimali. The counsel had also opined that long-term supplies to Vedanta's refinery from the two bauxite deposits of L&T is legally tenable.