Odisha's poor power linkage policy hit aluminium plant: Vedanta

Mining and minerals giant Vedanta today said it is operating its Jharsugda aluminium facility at a mere 25 per cent of installed capacity while putting the blame on state government for absence of power linkage policy and raw material crunch.

The NRI-billionaire Anil Aggarwal-led company has set up one of the largest single location aluminium plants at an investment of Rs 52,000 crore.

Lack of raw material linkage to run the Lanjigarh refinery and absence of a proper policy for drawing power from its own 2400 MW Independent Power Plant have affected the project, Abhijit Pati, CEO - Aluminium, Vedanta, said.

Vedanta's Jharsuguda complex houses 1.75 MTPA capacity smelter, 1215 MW Captive Power Plant and 2400 MW Independent Power Plant (IPP). 1.25 MTPA smelting capacity is lying idle for lack of desired power supply and only 0.5 MTPA is functional, said another senior Vedanta official.

The state government is yet to formulate policies and overcome regulatory issues to allow Vedanta to draw power from its IPP. Under present norms, the company has to pay huge cross-subsidy charges to use this power. This additional cost makes it unviable to initiate production in the 1.25 MTPA smelter, Pati said.

The loss for the nation can be gauged from the fact that India as a whole produces 2 MTPA aluminium while 1.25 MTPA is lying idle for want of power, he said.

Pati further accused the government for breach of what was promised in the the agreement and said, the company's alumina refinery in Lanjigarh is forced to operate way below its installed capacity. The company has to resort to costly imports and run the unit at around 25-30 per cent of its capacity in absence of bauxite from Odisha as promised in the MoU.

"Operations of the Vedanta unit at full capacity can be a game changer for the socio-economic scenario of the State. The struggling unit alone promises to create direct and indirect employment opportunities to the tune of over 1,00,000, if unleashed at full throttle," he claimed.

This will be further augmented by the expected 100 ancillary and downstream industries and 10,000 vendors who will add to employment generation, mostly local in nature, the CEO added.