Opening of tender by state owned Gujarat Mineral Development Corporation for sale of 92,174 tonnes of bauxite has injected hope to Vedanta’s alumina refinery at Lanjigarh in Kalahandi district that is staring at possible shutdown on bauxite crunch.
Official of Vedanta Aluminium Limited said that “We will participate in the bid of GMDC for sale of 92000 tonnes of bauxite by submitting the tender papers on October 4, the last date of participation. It may be noted, the company is struggling to keep its one million tonne refinery operations afloat with the plant running at barely 50% capacity amid deepening uncertainties in bauxite availability.

By any means we have to run the refinery till December 5th 2012. Sourcing 92000 tonnes of bauxite from the state PSU will serve the purpose for 10 days at least. To run the 1 million tonne per annum refinery plant at full steam, VAL needs 300,000 tonnes of bauxite every month.

VAL had designed its refinery in Odisha keeping in mind the locally available bauxite. The aluminium major had entered into an agreement with state controlled miner Odisha Mining Corporation for supply of bauxite. But attempts to mine bauxite at the ecologically sensitive Niyamgiri hills under OMC’s leasehold in Lanjigarh district were red flagged by the environment ministry that had scrapped the Stage-II forest clearance on August 24th 2010.

Owing to its total dependence on externally sourced bauxite, VAL has hitherto incurred cumulative losses to the tune of INR 2500 crore. The aluminum major on September 6 had served notice to the Odisha government for temporary closure of its refinery from December 5th 2012 owing to absence of assured supply of bauxite to feed its refinery.

So far, VAL had filed 26 applications with the state government, seeking alternative bauxite deposits but to no avail. GMDC has set a basic floor price of INR 800 per tonne for sale of bauxite up to 50000 tonnes and INR 750 per tonne above 50000 tonnes.

Source - Business Standard.com

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