Despite residing above over half the country’s total known bauxite reserves, the Odisha government has yet to place a single block up for online auction to date.
According to experts, state officials have thus far backed away from auctioning the blocks over concerns that the bauxite ore outcroppings will not draw the sort of significant interest auctions of iron ore have thus far enjoyed. This despite the fact that a handful of the blocks have been explored to the G2 level, thus fulfilling the criteria set by the 2015 Mineral Auction Rules.
“In Odisha, Vedanta is the only aluminium producer operating without a bauxite reserve of its own,” said an unidentified state official to domestic media late last week. “Its peers- the state run National Aluminium Company (Nalco) and Hindalco have ample deposits to feed their units. So, we feel online auctions of bauxite may not evoke a robust bidding interest.”
At present, Nalco is harvesting bauxite ore feedstock from its Panchpatmalli mines and conveying the ore to its refinery in Damanjodi. The firm also has 75 million metric tons of bauxite reserves in its back pocket at Pottangi, which it expects will provide sufficient bauxite ore for an upcoming fifth stream at Damanjodi.
Meanwhile, Hindalco’s mines at Baphlimali are expected to provide ample bauxite ore to its alumina refinery in Utkal for the next two decades.
Should the state determine that online auction of the bauxite ore blocks is not in its best interests, allowing the Odisha Mining Corporation (OMC) to utilize the caches is another option that is on the table. OMC is currently harvesting bauxite ore at Kodingamali as well under an agreement that guarantees 70 percent of it to Vedanta’s Lanjigarh refinery. The balance is left to OMC’s twice-yearly auction, with last fiscal year seeing the firm sell 1.68 million metric tons of the ore via electronic auction.