Vedanta to pare down aluminium making cost

Metals and mining giant Vedanta is planning to revisit its cost structure keeping it optimally below $1,400 per tonne in the wake of lower costs of alumina and coal. The aluminium producer said its estimated aluminium-making cost for the September quarter stood at $1,473 per tonne, while its overall cost of production declined to $1,462 per tonne. The shrinkage in aluminium-making cost was attributed by Vedanta to the lowering alumina and coal costs.

Vedanta is also going to be benefitted from using cheaper electricity from its own sources. The state-owned power regulator Odisha Electricity Regulatory Commission gave the aluminium producer permission to draw up to 1,800 Mw of power from its 2,400 Mw power station at Bhurkamunda, located strategically close to its smelting facility, without having to pay cross subsidy charges.


The diversified metal and mining conglomerate is said to be looking at a disciplined ramp-up of aluminium smelters at Jharsuguda and the Bharat Aluminium Company unit at Korba (Chhattisgarh). The production figure aimed at for the revamped smelter stands at an estimated 1.1 million tonnes in 2016 against 0.54 million tonnes in the first half of FY 2016-17.

The revamp plans at both the aluminium smelters were impacted by power outages in the last quarter. Of the 168 pots affected at Jharsuguda, 26 have already been restarted while repair is being carried on with the rest. At Korba's Balco unit, 167 pots were impacted and they are scheduled to be brought back to operations in the January-March quarter of the current financial.

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To back its cost optimisation strategy through aluminium expansion, Vedanta is also eyeing a ramp-up of its aluminium refining facility at Lanjigarh. The second stream operations of the refinery have already been resumed this year with a targeted production of 1.4 million tonnes. Vedanta has pegged the alumina making cost at the facility at an estimated $250 per tonne.

The company is further working towards ensuring the viability of the Lanjigarh alumina refinery. It has pleaded to the Odisha government to arrange for alternative, secured bauxite supplies from one of the mines owned by the Odisha Mining Corporation.