Vedanta Plans to Expand Lanjigarh Refinery Capacity

Vedanta Resources Plc today said it plans to raise capacity of its Lanjigarh Alumina refinery to 6 million tonnes per annum (mtpa) with an investment of Rs 10,000 crore.

Talking to reporters after meeting Odisha Chief Minister Naveen Patnaik, Vedanta Resources chairman Anil Agarwal said doubling of the present plant capacity to 2 mtpa would be done within a year of getting all the clearances.

Ramping up the capacity further to 6 mtpa would depend upon the availability of bauxite, a key raw material for making alumina, he said, adding that the company would be investing Rs 10,000 crore for the capacity expansion.

Vedanta, which had set up 1 mtpa refinery plant at Lanjigarh in Odisha's Kalahandi district seven years ago, had been facing an acute shortage of bauxite and presently importing the raw materials from other states and countries to feed its plant. The company had to shut down the plant for some months due to shortage of bauxite in 2012.

The company's concern for the raw material had been compounded after Odisha government's plan to start bauxite mining from Niyamgiri Hills failed. "We have been getting bauxite from other countries and other Indian states like Gujarat, Andhra Pradesh and Jharkhand," he said.

In its bid to overcome bauxite crisis, the company has already entered into a joint venture with L&T. India's largest infrastructure company had been allocated with two major bauxite reserves in the state. As L&T did not have a plant here, it was not given mining license. Agarwal hoped that since they have a JV with L&T, the government would recommend ML (mining lease) in their favour.

However, the state government was yet to take a decision in this regard, sources said.

"We are left with no option, but to pin hope on the bauxite reserve of L&T in order to run the company's refinery at Lanjigarh in Kalahandi district," Agarwal said.

Asked how can the company expand the refinery capacity when it is facing ore crisis, Agarwal said, "The capacity of the refinery would be expanded to 2 mtpa in the next one year. The plant would ultimately have a capacity of 6 mtpa with availability of the raw material."

Stating that the state government is keen to make raw material linkage for Vedanta's refinery, Agarwal said, "The state government has assured me of a lasting solution to the raw material problem faced by the company."

"We are talking to L&T, which has been allocated three bauxite mines, to tide over our raw material problem. Besides, we have also approached the Odisha government to give us two laterite mines, which would partially take care of our raw

material needs. The state government has responded positively to our request," said Agarwal.

The raw material shortage has left Vedanta's smelter at Lanjigarh and Jharsuguda to limit its production within 25 per cent of their capacities.

The two bauxite deposits in hands of L&T together reserved 285 million tonnes of ore. While 245 MT of bauxite is reserved at Sijimali, L&T's other reserve at Kuturmali has 40 MT of bauxite. Both the mines remained unutilised ever since they were in hands of L&T.

Agarwal said with Vedanta's smelter becoming fully operational, about 100 more new industries can come up which could provide employment to a large number of youths in the state.

Asked about the opposition in the recent Gram Sabha on Vedanta's expansion plans, Agarwal said, "I have no such idea. But, media reports say that people want the plant here."