Vedanta May Invest Rs 10,000 Crore on Lanjigarh Refinery Expansion

Vedanta Aluminium, a unit of NRI billionaire Anil Agarwal-led Sesa Sterlite, may invest Rs 10,000 crore to raise the capacity of its alumina refinery at Lanjigarh in Odisha to six million tonnes per annum (mtpa).

"We have received villagers' approval and now, we need to get some clearances for taking the project ahead. Around Rs 10,000 crore investment would be required to jack up the plant capacity to six mtpa from one mtpa now," a senior official of the company told PTI.

The official, who requested anonymity, said the unit would provide direct employment to about 7,000 people once it goes on full stream. Vedanta has the required land area in possession to carry out the expansion work.

The expansion work might take a while to actually start on ground because of the required clearances, including from the state pollution control board, Ministry of Environment and Forest and Environmental Advisory Committee.

The planned expansion got a fillip as local villagers, a section of which was earlier opposing the move, yesterday gave their approvals to take it forward, hoping a positive change in the local economy with the massive investment.

A company spokesperson said villagers' approval to the expansion of the project shows that the company has acceptance among the locals.

The company had commissioned the one mtpa refinery in August 2007, but has been struggling to get bauxite and as a result, it had to even shut down the plant for some time.

It takes around three million tonnes bauxite to produce one million tonnes of alumina.

The company's efforts to mine bauxite ore in Niyamgiri hills had received a setback with villagers objecting to mining in the sacred area.

Vedanta Resources, however, subsequently said it will not look at mining bauxite from the Niyamgiri hills to feed its Rs 5,000 crore refinery until it gets nod of the local community.

The company is actively working with the Odisha government to allocate it a mine in alternate location and itself trying to source bauxite from alternative locations to support existing and the expanded refinery operations.

During the first quarter of current fiscal, the refinery operated at 93 per cent of its rated capacity and produced 233,000 tonnes, which is higher by 6,000 tonnes as compared to the immediate past quarter.