Odisha to Offer Bauxite to Vedanta at Market Price

London listed mines and metals conglomerate Vedanda Ltd would have to buy bauxite from state owned Odisha Mining Corporation (OMC) at prevailing market prices. Vedanta was sorely in need of local bauxite supplies to feed the expanding requirement of its Lanjigarh alumina refinery.

“There will be no special concession for Vedanta. Bauxite would be made available for the company through OMC at market rates. This is the arrangement which OMC has for all industries sourcing iron ore and chromite ore and Vedanta’s case cannot be an exception”, said a senior state government official.

OMC in January this year had entered into an arrangement with Vedanta for supply of bauxite from its Kodingamali mines with reserves of 81 MnT. Vedanta was struggling to meet the requirement of its Lanjigarh refinery even though its de-bottlenecked capacity has reached two mt. The company was banking on external bauxite supplies from its mines at Balco and also imports to cater to the refinery’s requirement. For Vedanta, high logistics costs were a concern as it was aiming to prune its cost of alumina and aluminium production.

Vedanta has been pleading for alternative bauxite mines to the state government after the Union environment ministry red flagged the Niyamgiri bauxite mining project. The ministry’s decision stemmed from a referendum in which participating local tribals unanimously nixed the mining plan in 2013.

As of now, Vedanta is completely dependent on externally sourced bauxite to run the Lanjigarh refinery with an approved capacity of four million tonne a year. But Vedanta was hardly able to run it at its full design capacity as local bauxite supplies had dried up.
In 2015, Vedanta had idled one stream of the Lanjigarh refinery to cut down on its mounting losses. But, Vedanta, in this fiscal, has revived the second stream operations at the refinery and is looking at an alumina production of 1.4 MnT this fiscal.

Alumina output by Vedanta was up 24 per cent in last fiscal at the company’s Lanjigarh refinery in Odisha as both streams operated, producing 1.2 MnT.