Higher sourcing of Bauxite from local benefits Vedanta to crop alumina cost by 8%

The higher procurement of locally supplied bauxite has succumbed Vedanta to crop the cost of making alumina at its Lanjigarh refinery by 8% Y-o-Y to $269 per tonne in Q3 of this fiscal year.

The production capacity of alumina at the Lanjigarh plant has risen by 16% Y-o-Y to 476,000 tonnes. The decreased cost of alumina also steered to cut the cost of production of aluminium at $1691 per tonne. The company communicated in a recent investor presentation meet that locally supplied bauxite has now been meeting over half of the company’s total requirement.

The Lanjigarh refinery was up by 24% to reach 1.33 million tonnes during April-December’19, whereas the cost of production dipped 16% Y-oY at $281 per tonne. The falling of alumina costs and structural cost reduction measures commenced on by Vedanta. Aluminium cost during this period dropped 12% to $1769 per tonne.

The company is also fastening the drive on ramping up of the Lanjigarh alumina refinery in an astounding manner. In its first phase, the capacity of the refinery will be scaled up to 2.7 mtpa with medium-term expansion to 6 mtpa. The ultimate capacity of the alumina refining unit is predicted at 6 mtpa.

Vedanta has been making continuous efforts on bauxite sourcing by increasing output from its captive mine. All efforts are on to ramp up the supplies from Kodingamali bauxite mine in Odisha under the leasehold of Odisha Mining Corporation. The company is also looking to explore new resources under the New Mineral Policy.

Vedanta is gradually shifting focus from road transport to rail to pull down its logistics costs. The company has made strategic partnerships with key supplies besides entering into long-term agreements to rationalize procurement productivities.