Uncertainty hovers around alumina refinery projects in AP

Uncertainty hovering around the State government’s stand on bauxite mining for a decade or so are sending wrong signals to the efforts to showcase Andhra Pradesh as an investment destination, say investors.

The State signed a Memorandum of Understanding (MoU) with Jindal South West Aluminium Limited in 2005 for establishing alumina refinery and smelter complex but so far not an inch has moved. The worst victim is Anrak Aluminium Limited, which invested INR 5,800 crore to set up a 1.5 million tonne alumina refinery in Makavarapalem mandal, about 100 km from here in 2012 expecting supply of bauxite ore by AP Mineral Development Corporation.

The issuance of GO allowing APMDC to mine bauxite in GK Veedhi mandal was put on hold at the State Cabinet’s meeting held on Monday, November 16, hitting hard the investors’ sentiment.

According to industry sources, Eastern Ghats have world’s largest bauxite reserves estimated at two billion tonne – 60 per cent of it in Odisha and the remaining in Visakhapatnam and East Godavari districts of AP.

Both Anrak, which signed MoU in 2007 and Jindal had envisaged an investment of over INR 20,000 crore in Visakhapatnam and Vizianagaram hoping that APMDC would keep its commitment to supply raw material to them. The land acquisition for the plant and machinery, both the project proponents, has already been completed.

Sources in Anrak say they have already made huge investments and the refinery now without being put into use is causing a heavy burden to them on their finances due to no fault of theirs.

Jindal, which opened a project office and made recruitments immediately after land acquisition in S.Kota area of Vizianagaram has scaled down its manpower size due to no work. Now Anrak is left with one option to toe Vedanta line as the latter’s refinery at Lanjigarh of Odisha has also been deprived of ore supply by Orissa Mining Corporation.