Vedanta assured bauxite supply from L&T mines, says Anil Agrawal

After a series of setbacks for his group's Rs 5,000-crore alumina refinery plant at Lanjigarh in Odisha, Anil Agarwal, founder and executive chairman of the UK-based Vedanta Resources, said the company was on Tuesday assured of bauxite supply from L&T's mines in the state.

"The Chief Minister has assured bauxite for our refinery project. He (CM) said we can source bauxite from L&T's reserves," Mr Agarwal told reporters in Bhubaneswar after a meeting with Chief Minister Naveen Patnaik.

Mr Patnaik late on Tuesday held a meeting with both Mr Agarwal and L&T executive chairman A M Naik over the latter's two bauxite reserves at Sijimali and Kutrumali mines in south Odisha's Rayagada and Kalahandi districts, respectively.

Both the mines have an estimated bauxite deposit of about 300 million tonnes.

Stating that Vedanta's refinery was utilising only 50 per cent of its 1 million tonnes per annum (MTPA) capacity, Mr Agarwal said that they would work jointly with the L&T to explore bauxite.

The Lanjigarh alumina refinery and its proposed long-term bauxite source - mining in the Niyamgiri hills - have been in the midst of controversies even since the beginning as the local tribals opposed the projects.

The refinery was staring at an uncertain future as it was not having any permanent source of bauxite. It is estimated that the Lanjigarh unit needs 3 million tonnes of bauxite to run the 1 million tonne per annum alumina refinery.

Earlier, Vedanta had entered into a joint venture with L&T, which held prospecting licence for Sijimali and Kutrumali mines.

"We have not only signed MoU with Anil Agarwal's company, but have a deeper relationship with it," L&T chief A M Naik said.

He said of the Rs 12,000-crore JV project, L&T would invest about Rs 4,000 crore.

The state government on its part has to recommend Mining License (ML) for L&T to the Centre. L&T had won PL for Sijimali and Kutrumali bauxite mines in 1992. But two years later after the expiry of PL, the state government denied ML to L&T since it had no end-use plant.

In 2005, L&T through a joint venture with Dubai Aluminium (Dubal) had proposed a Rs 30,000-crore alumina refinery of three million tonne per annum (mtpa) capacity at Rayagada, 1.5 mtpa smelter project and a captive power plant (CPP).

Seven years later in 2012 when Dubal walked out of the SPV, VAL bought a 24 per cent stake in the project. A memorandum of understanding (MoU) between the two was signed about one-and-half a year ago.