“Improved captive alumina production and locally sourced bauxite are key to drive our aluminium costs lower. The peak run rate at Lanjigarh refinery during the year was 1.8 mtpa (million tonnes per annum)”, Vedanta
Ltd said in its production statement.
OMC, a state-controlled mining concern, started feeding Vedanta's Lanjigarh refinery from Q1 of FY19. OMC
has ramped up bauxite output at its Kodingamali mine to achieve a peak rate of 3 mtpa. In line with state policy, OMC
liquidates 70 per cent of its mined bauxite to Vedanta
under a long-term linkage agreement. The balance quantity is offered for bids at bauxite auctions held within a span of six months.
For Vedanta, coal continues to be a key thrust area. “The linkage coal materialization for the captive power plants has improved in Q4 FY2019 as compared to previous quarters resulting in no power import for the last four months. The company secured 3.2 million tonnes of coal in Tranche IV auction and materialization has started from March 2019. This will improve coal availability and therefore help to drive our costs down”, the statement added.
A company update report on Vedanta Ltd by Edelweiss Research says despite investors' knee-jerk reactions, the conglomerate has actually delivered 27 per cent returns over the past two months and achieved the envisaged target price. However, with zinc prices on the London Metal Exchange (LME) peaking and capital allocation risks persisting, Edelweiss expects limited upside potential on the company stock.