Indian mining firm Vedanta is again in the minerals auction market – this time they’re bidding for bauxite resources to help shore up supply for their alumina refinery at Lanjigarh.
To date, Vedanta has been supplying the refinery with between sixty and seventy percent of its ore requirements from neighboring states and the remainder from sources overseas in Guinea, but the lack of local bauxite sources has made the mine unprofitable. Although the firm has an agreement with Odisha Mining Corporation (OMC) for 150 million metric tons per annum of bauxite, tribes in the area have successfully petitioned Indian courts to prevent mining. As a result, Vedanta has idled one line to cut losses.
At the present time, the refinery is producing 800,000 metric tons per annum of alumina, which is well under the plant’s nameplate capacity of four million metric tons per annum. Cutting production thusly has dropped losses from between US$500,000 and US$600,000 per day to US$300,000 per day.
Vedanta is presently ramping up aluminium production at Jharsuguda and the Balco unit at Korba (Chhattisgarh), and, as a result, alumina demand will soon rise. The firm plans to nearly double capacity, bumping it up to 1.5 million metric tons per annum.
“Odisha has lined up the Balda bauxite block for auctions which has a reserve of 20 million tonne. Once it is put up for auctions, we will evaluate all options including whether we will bid for it. The state government should reserve this block for an end use plant so that traders and merchant miners disqualify from bidding”, a company source confided.
The firm is also planning to start mining in three small laterite mines in the area to augment production as well. The three mines’ combined reserves are estimated at three million metric tons.
“We are also constantly engaging with the state government for securing local bauxite supplies for our Lanjigarh refinery,” the source added.