Vedanta Pushes Alumina Production Cost To Record Low In Previous Quarter

Vedanta Pushes Alumina Production Cost To Record Low In Previous Quarter

Indian metals miner Vedanta Ltd produced alumina at the lowest cost in two years during the prior quarter, with the cost per metric ton falling by 17 percent to US$284.

In an investor presentation prepared on the first quarter of fiscal year 2020, Vedanta said better bauxite sourcing from the government via Odisha Mining Corporation helped it refine alumina more efficiently at Lanjigarh refinery in Odisha.

Lanjigarh saw production rise in the quarter as well, increasing by 37 percent to a total of 440 thousand metric tons. The refinery is expected to continue to increase output, with a plan in place to build out to a total of 6 million metric tons per annum. Across the entirety of the prior fiscal year the company’s total aluminium output rose by 24 percent to 1.5 million metric tons.

OMC provides bauxite to the refinery under a long-term supply arrangement whereby the firm ships 70 percent of the ore mined at Kodingamali mine to the Lanjigarh refinery. The agreement also allows Vedanta to participate in OMC’s twice-yearly auctions for the remainder of the mined ore.

Overall, Vedanta says output will continue to swell thanks to the INR6,483 crore refinery expansion. The increase in alumina output is part of a plan to reduce reliance on costly imported alumina, which it expect will make its aluminium more competitive.

In addition, Vedanta continues to pursue upstream integration, most recently by the proposal for building a caustic soda plant in Dharma for INR6,500 crore.