No plan to shut down Lanjigarh refinery: VAL

The Vedanta Aluminium Ltd (VAL) has no plans to shut down its one million tonne alumina refinery at Lanjigarh, which is currently facing acute shortage of raw material to run the plant.

"We have no plans to shut down the refinery. We are running the refinery with depleted stock of bauxite. The stock is likely to run out soon and may impact the operation”, S K Roongta, managing director, VAL told newsmen after emerging out of a meeting with the state chief secretary B K Patnaik.

He said, there are very few bauxite mines outside Odisha. Though the company is making efforts to source the raw material from various states but there are logistic problems.

"Our Lanjigarh refinery was designed keeping in view the bauxite reserves in Odisha. But we have not been able to source bauxite from the state till date”, he added.

On whether the company had any contingency plan to tide over depleting bauxite stock, “There is nothing we can do if bauxite is not available.”

The refinery is currently running at 40-50 per cent capacity with per day bauxite consumption being 5000 tonnes a day.

After being denied access to bauxite mines at Niyamgiri, the company wholly depended on supplies of bauxite from other states to keep its refinery operations afloat at Lanjigarh.

Before setting up its refinery at Lanjigarh, Vedanta had entered into an agreement with state-run Odisha Mining Corporation (OMC) for supply of bauxite.

But attempts to mine bauxite at the ecologically sensitive Niyamgiri hills under OMC's leasehold were red flagged by the environment ministry that had scrapped the Stage-II forest clearance on August 24, 2010.

Of late, the company was unable to get bauxite from Gujarat as GMDC had not issued any tender recently. Besides, private miners in Gujarat were increasingly banking on exports of bauxite to fetch better returns, the VAL official informed.

Bauxite mines in neighbouring Jharkhand and Andhra Pradesh were bogged down by regulatory issues and this has hit supplies, he added. To run the one million tonne per annum (mtpa) refinery plant at full steam, VAL needs 300,000 tonnes of raw material every month.

Owing to its total dependence on externally sourced bauxite, VAL has hitherto piled losses to the tune of Rs 3000 crore.

VAL's Lanjigarh refinery as well as smelter and captive power plant (CPP) complex at Jharsuguda has seen grounding of investments of Rs 50,000 crore. The company's smelting facility and CPP engage more than 15,000 people.