Vedanta to restrain its alumina imports to 500,000 tonnes by FY21

According to a report, Vedanta Limited is aiming to curb its alumina imports to 500,000 tonnes a year by the financial year 2021.

Per the record, the company imports more than two million tonnes of alumina to power its smelters at Jharsuguda and Korba because of having no sufficient captive bauxite resources of its own. Vedanta also banks on imported bauxite to feed its alumina refining unit at Lanjigarh.

However, the company confirmed that it would ramp up its Lanjigarh capacity to six million tonnes per annum; to start with, four mtpa in the first phase. The refinery scale up is expected to reduce Vedanta’s dependence on imported alumina and therefore, the cut at aluminium production cost as a result.

To cater to the refinery’s enhanced bauxite requirement, Vedanta has tied up sourcing arrangements with Emirates Global Aluminium (EGA) and Odisha Mining Corporation (OMC).

“Bauxite supplies from EGA will start flowing from August 2019. We have an agreement with them for drawing four mtpa each year from Guinea. In addition, we have a long-term linkage with OMC to draw 250,000 tonnes from their Kodingamali mine. Assured bauxite supplies will keep our supply chain stable and replace imported alumina. Imports are expected to taper to the level of 0.5 million tonnes somewhere in the middle of calendar 2020”, a senior Vedanta Ltd. executive said.

He also said that a major cut in alumina imports would make Vedanta’s aluminium cost competitive. At present, Vedanta's aluminium smelting costs are hovering around US$2,000 a tonne in line with the production costs of its peers National Aluminium Company (Nalco) and Hindalco Industries.

With a focus on structural cost reduction, Vedanta aims to prune its aluminium making cost to $1,500 per tonne, down from $2,018 in Q2 of this fiscal.