Vedanta Aluminium goes on workforce reduction, cost cuts

Mining giant Vedanta Resources has resorted to "aggressive cost reduction" and "workforce reduction" in its aluminium segment amid subdued and volatile market conditions globally.The Anil Agarwal-led mining conglomerate said sharp rise in Chinese exports has led to a short-term market saturation and the cost of the metal in global market suggests that over 50 per cent of the world capacity is at loss, based on current prices at the London Metal Exchange (LME) plus premium.

Vedanta is taking bold decisions in the current low price environment. A disciplined approach towards smelter ramp-up in light of current market volatility, it said in a statement. The ramp up of the first line of the 312 kilo tonne capacity at Jharsuguda will commence in the second quarter (July-September) this fiscal, it added. The London-based minerals major further said the start up of additional pots is on hold and it is shutting down its rolling business at Balco.

The firm has also resorted to partial capacity reduction at its Lanjigarh alumina refinery, it said in a presentation. To deal with the current market conditions, Vedanta said it has resorted to "aggressive cost reduction drive through operational efficiency, workforce reduction, product mix optimisation, procurement and synergies across locations." It added that the industry body Aluminium Association of India is engaging with Indian government on increasing import duty in light of surging imports.

Vedanta said it will "...continue to focus on optimising assets, maintaining positive free cash flow and delivery of strategic priorities" through a "series of initiatives to reduce costs, maintain financial strength and complete debt refinancing well in advance."