Faced with virtually no supply of bauxite, billionaire Anil Agarwal’s Vedanta Aluminium may close its alumina refinery at Lanjigarh in Odisha.
The company is expected to send a formal notice to the authorities in a day or two.
When contacted, a senior company official told
“In spite of Odisha having huge reserves, non-availability of bauxite is driving us to a situation where continued operation of the refinery is rendered difficult.”
The company refinery, located in the ‘very backward’ district of Kalahandi, has a capacity of one million tonnes.
It has invested over Rs 8,000 crore out of Rs 50,000 crore total investments in Odisha. The refinery feeds alumina to its smelters located in Jharsuguda and Korba.
Ministry nod awaited
However, in the absence of required supplies, its operating capacity came down to 50 per cent.
Company officials said for the last one or two months, it has been forced to operate at just 20-30 per cent of the capacity. The supply problem persists, despite the Supreme Court, in 2008, clearing bauxite mining in the Niyamgiri Hills in Lanjigarh was subject to approval from the Ministry of Environment and Forests.
The Ministry went for several rounds of consultations, but is yet to give the go-ahead.
Officials said in the absence of local supply, the company was forced to bring bauxite at a very high price from Chhattisgarh, Jharkhand, Andhra Pradesh, Madhya Pradesh and Gujarat.
Now the problem is that sources from Andhra, Jharkhand and Chhattisgarh have virtually dried out.
At the same time, Odisha, with almost two billion tonnes of reserves, has not seen opening of a new bauxite mine during the last 30 years.
The company claims that it has the capacity to produce low-priced aluminium, but it is not getting support for that.
The current situation may also put a question mark on the proposed expansion plan of alumina refinery to six mt and the smelter to around 2.5 mt a year of aluminium.
Not only this, closure of Lanjigarh refinery will also bring down the curtains on the refinery’s captive power plant, which also supplies to local habitats.