Vedanta CEO to meet Odisha CM to request for bauxite mines

Tom Albanese, Chief Executive Officer, Vedanta Resources Plc, is scheduled to meet Odisha Chief Minister Naveen Patnaik on Thursday to request for making bauxite available to the company's Lanjigarh alumina refinery that is otherwise headed for a shutdown. The company has said repeatedly in the recent past that the plant's operation has become totally unsustainable due to the fall in global alumina/aluminium prices and high cost of production arising out of the non-availability of bauxite within the state.

This has created a lot of uncertainty around Vedanta's gamble to invest Rs 60,000 crore in the aluminium sector in Odisha. At such a juncture it is very unlikely that the proposed meeting between Albanese and Patnaik will yield any outcome.

The present scenario in fact, leaves little room for the state government to bring relief to Vedanta which has reeled under raw material shortages ever since it went into production in December 2007. Even if it wants to supply bauxite to the starving plant, the state government has no ready-made solutions. The state's mining arm, Odisha Mining Corporation, does not own any bauxite deposit. "We have asked the Centre to reserve two big mines, Kalrapat and Sashubahumali, in favour of Odisha Mining Corporation. If that is done, we can supply bauxite to Vedanta's plant," says a senior Odisha government officer.

Also, after the enactment of the Mines and Mineral Development and Regulation Act, 2015, it has become mandatory for any resource hungry company like Vedanta to come through the auction route to get hold of a mineral deposit. And no bauxite mine figures in the list of mines to be put on the block in the first tranche of auction scheduled to be held by the end of this year.

However, one window of opportunity that is available to Patnaik is to allow Vedanta to source bauxite from the two mines, Sijimali and Kutrumali, which are in the process of being handed over to Larsen & Toubro.

Vedanta however has a different view. An executive said, "Immediately after the Niyamgiri fiasco, we had approached the government with a request to allot us alternative mines from among 33 deposits in the vicinity of Lanjigarh. No action was taken on the proposal before the new MMDR Act shut the doors on preferential allotment."

The government should expedite the process of identifying bauxite mines for auction and reservation of some deposits for Odisha Mining Corporation if it really wants to safeguard investments in alumina/aluminium sector in the state, added the official.