Vedanta may have to wait longer for bauxite from L&T

A senior official in the Odisha government said there is no timeline for granting mining leases to two crucial mines of Larsen and Toubro Ltd (L&T), in what suggests Sesa Sterlite Ltd may have to wait longer before it gets bauxite from the construction company under a memorandum of understanding.

“Their prospecting licence is over. Their report is furnished. Mining lease is not yet granted to them,” D.K. Mohanty, director of mines in the Odisha government, said when asked where L&T’s clearances stand.

Asked about the timeline for grant of the mining leases, Mohanty said he had “no idea”.

Prospecting licences are given to miners for carrying out exploration so that the reserves and the ore body are identified. After this, fresh applications have to be made for a mining lease.

Sesa Sterlite, the Indian unit of London-listed Vedanta Resources Plc., is desperately looking for bauxite supplies for its 1 million tonne (mt) alumina refinery in Lanjigarh in Odisha’s Kalahandi district, with its plans to mine the Niyamgiri hills waiting for a central government approval.

In December, the refinery had to be shut, owing to a shortage of bauxite. It reopened in the middle of this year.

Vedanta chairman Anil Agarwal was last week cited by Business Standard in Bhubaneswar as saying the Odisha government may help them source bauxite from L&T, which has two mines—Sijimali and Kutrumali—in Odisha with estimated bauxite reserves of 300 mt.

“As per an agreement, we can source bauxite from L&T mines. The chief minister said such a proposal is under consideration and a decision will be taken soon in this matter,” Agarwal was quoted as having said in the newspaper.

The company has the largest installed capacity for aluminium metal (made from alumina) in India, at 745,000 tonnes, at its Chhattisgarh and Odisha smelters and investments have been made to increase the Odisha smelter capacity to 1.1mt.

Mines director Mohanty said Vedanta has 32 applications for bauxite and laterite in Odisha that are for prospecting licences and mining leases, and these are all under process. After a mining lease is obtained, it could take up to two years to develop the mine and get clearances.