Vedanta to expand alumina production despite many obstacles

The Chairman of Vedanta Resources, Anil Agarwal recently announced that he is going to raise the production in his Lanjigarh alumina refinery, from its current capacity of one million tonne to two million tonne in a year and has plans to push that to six million tonne gradually. He also plans to revive the idle capacity in his 0.5 million tonne smelter at Jharsuguda in western Odisha.

There is another smelter that is lying idle for the past three years with 1.25 million tonne capacity and a SEZ status due to unresolved issues with the government regarding the power source for the project. He has plans to get them back into production as well.

The announcement came after his meeting in Bhubaneshwar with Naveen Patnaik, the Odisha Chief Minister held recently.

Although the expansion decision seems strange when Vedanta is already suffering from a lack of bauxite resource forcing both Lanjigarh and Jharsuguda smelters running at 25 percent capacity, analysts believe with the stronger aluminium hovering around $2,100 per tonne, it makes sense to increase production even with the imported bauxite.