Staring the prospect of a winnowing feedstock supply square in the eye, India metals miner Vedanta has turned to the courts to compel state-owned National Aluminium Company (Nalco) to sell to them a portion of the alumina they currently send overseas.
In a motion at the Odisha High Court earlier this week, Vedanta sought to suspend sale of alumina by Nalco to foreign firms and consider their offer to purchase the aluminium precursor instead.
This week’s motion is the latest effort in a campaign by Vedanta to gain access to Nalco’s alumina stream. The private firm has been repeatedly rebuffed by Nalco, which sells over 1.2 million metric tons of alumina to overseas buyers each year.
According to Nalco, Vedanta’s offers have been turned away due to its status as an India-based concern. Vedanta alleges in its filing that Nalco advised it to bid via its holding company in London, contemplating a delivery at sea and a return of the goods to a port in India.
Vedanta argues that such an arrangement is far from ideal.
“Such process is impractical and unfeasible as it involves substantial loss of foreign exchange as well as duplication and unnecessary burden on the country’s infrastructure of road, rail and port,” said the firm in the filing.
On the other hand, Vedanta says the smelter it runs in Jharsuguda qualifies it for tendering a bid to Nalco under the current rules.
“The government of India policy treats SEZs [Special Economic Zones] as deemed foreign territory and sales to SEZ units are treated as exports,” argued the firm. “All benefits under Foreign Trade Policy are applicable on transactions with SEZ units.”
Vedanta went on to point out that other public sector undertakings (PSUs), Hindustan Copper for instance, are accepting bids from both domestic and international bidders.
Vedanta’s most recent offer to Nalco was for US$380 per metric ton of alumina, which is well above the typical offer Nalco assented to from other buyers. Vedanta went on to say that, should Nalco choose to accept their offer to buy, it would realize up to INR2 billion in revenue beyond what it receives on the export market.