Also, the recent spike in spot global alumina prices would not have much implication for Vedanta. “The recent rally in alumina prices is the fall out of some supply shortfall in China. We believe this is a temporary phenomenon and would not hold on for long. Vedanta has long-term contracts with bauxite suppliers in Guinea and Australia and this hedges us against vacillating prices,” he added.
The refinery located at the foothills of the bauxite laden Niyamgiri mountain range, has a rated capacity of six million tonnes per annum (mtpa). Vedanta has permits to produce four mtpa. But, the refinery was operating at less than half of the approved capacity as local bauxite was unavailable.
Vedanta has been running the refinery by sourcing bauxite from the BALCO mines in Chhattisgarh. It also imports the raw material from New Guinea and Australia.
After Vedanta lost the bid to mine the ecologically fragile Niyamgiri hills, it has been appealing to the Odisha government for arranging local bauxite from alternative sources. Local tribes made up mostly by Dongaria Kondhs, unanimously nixed the mining plan during July-August 2013 in a referendum held as per the Supreme Court's order. Barring a few small laterite mines with traces of bauxite, the state government has not been able to come to the rescue of the starving Lanjigarh refinery.
Though the state controlled company - Odisha Mining Corporation (OMC) has some good quality bauxite deposits in Karlapat, Sasubohumali and Kodingamali leases, mining as not taken off yet due to lack of regulatory clearances.
"We are open to sourcing bauxite from OMC. It could be either a long-term linkage arrangement or buying at e-auctions. Vedanta is also awaiting auctions of bauxite assets in Odisha where we intend to participate," the official said.