It’s been almost two months now since the Vedanta-owned alumina refinery in the Indian state of Odisha re-opened, after being shut for around seven months. Yet, it continues to procure the crucial ore bauxite from the market – not yet been given the mine earmarked by the government for it.
It’s been a long and bitter battle for Vedanta Aluminum Ltd (VAL) where this particular project is concerned, something acknowledged by its executive chairman, the millionaire Anil Agarwal.
Agarwal is now pitching another mine, away from the controversial one. In a recent interview to The Financial Express, Agarwal has expressed hope that the local state government would allot his project another mine rather than the earlier one, which ran afoul with tribals. Optimism seems to be the only thing left for the Vedanta chairman, whose company has been struggling to get its right to mine on the one allocated over five years ago by the Odisha government.
We at MetalMiner have been closely following the trials and tribulations of the US $1.7 billion project that is stuck. Stuck so badly that the management was forced to temporarily shut down the plant for want of bauxite earlier this year. When it re-started in August, there was talk of the designated bauxite mine being handed over to Vedanta, but the local residents’ opposition to mining in their area still stands in the way.
The 1-million-ton refinery plant needs to soon expand to 5 million tons, as per the original plan. The Executive Chairman says he is optimistic the Odisha Government will soon allot another mine. The government, he says, must act, because at the heart of this struggle is the livelihood of the plant’s 2,000 employees, down from the 7,000 when construction had first started. When the plant capacity increases, as envisioned, this figure will climb to 5,000.
Vedanta Resources Owns India?
Clearly, Agarwal is concerned. Riding on this one bauxite mine is quite a lot of Vedanta’s Indian aluminum fortune. Once the refinery starts operating at full capacity, within a year or two, the Group’s India turnover can increase from the present US $16 billion to $25 billion, he predicts.
Agarwal’s Group produces 30 percent of India’s oil, 95 percent of its silver, 65 percent of lead, 70 percent of aluminum, 95 percent of zinc and 50 percent of the country’s copper, so when he talks, governments and the media sit up and take note.
He told The Financial Express that just as Odisha will have to allocate another mine, the Indian Government will have to clear policy (oil). Vedanta Group company Cairn, which produces 180,000 barrels of oil a day, can ramp this up to 500,000 barrels in two years if the necessary clearances were given. This would mean an import savings for India of nearly US $12 billion, a figure not to be sneezed at.
Now, if only the government took decisions a little faster…